New Mexico Administrative Code
Title 3 - TAXATION
Chapter 16 - MOTOR VEHICLE FUEL TAXES
Part 3 - GASOLINE TAX - IMPOSITION AND RATE OF TAX
Section 3.16.3.12 - EXCHANGES

A. Exchanges of gasoline between one refiner or pipeline terminal operator and another are exempt deliveries of gasoline under Paragraph 2 of Subsection N of Section 7-13-2 NMSA 1978. When pipeline terminal operators or refiners exchange gasoline, the person to whom the gasoline is delivered takes the place of the person who delivered the gasoline.

B. Example: X is a pipeline terminal operator in New Mexico. Y is a refiner in another state and operates no refinery or pipeline terminal in New Mexico. Z is a registered distributor in New Mexico who distributes Y's brands of gasoline. Because Y does not operate a refinery or pipeline terminal in New Mexico from which it can supply its own distributors and retailers, Y arranges with X to exchange Y's gasoline stored at a pipeline terminal out of state with X's gasoline stored at a New Mexico pipeline terminal. Y then ships or delivers Y's New Mexico gasoline to Z. In this example, Y will be treated as a pipeline terminal operator in New Mexico. Because Y ships or delivers gasoline to Z, a registered distributor, Z has received the gasoline and the obligation to report and pay the tax, just as if X had shipped or delivered the gasoline to Z.