New Mexico Administrative Code
Title 3 - TAXATION
Chapter 16 - MOTOR VEHICLE FUEL TAXES
Part 101 - RECEIVED
Section 3.16.101.10 - EXCHANGES

A. Exchanges of special fuel between one refiner or pipeline terminal operator and another are exempt deliveries of special fuel under Section 7-16A-2.1 NMSA 1978. When pipeline terminal operators or refiners exchange special fuel, the person to whom the special fuel is delivered takes the place of the person who delivered the special fuel.

B. Example: X is a pipeline terminal operator in New Mexico. Y is a refinery in another state. Z is a registered supplier in New Mexico who distributes Y's brands of special fuel. Because Y does not operate a pipeline terminal in New Mexico from which it can supply its own suppliers and retailers, Y arranges with X to exchange Y's special fuel stored at a pipeline terminal out of state with X's special fuel stored at a New Mexico pipeline terminal. Y then ships or delivers Y's New Mexico special fuel to Z. In this example, Y will be treated as a pipeline terminal operator in New Mexico. Because Y ships or delivers special fuel to Z, a registered supplier, Z has received the special fuel and the obligation to report and pay the tax, just as if X had shipped or delivered the special fuel to Z.