New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 123 - EXEMPTION - GROSS RECEIPTS TAX - NATURAL RESOURCES SUBJECT TO RESOURCES EXCISE TAX ACT
Section 3.2.123.8 - RECEIPTS NOT EXEMPT

A. The receipts from any sale of natural resources made to the final consumer are not exempt under the provisions of Section 7-9-35 NMSA 1978. The receipts from certain types of transactions may qualify for specific deductions allowed under the provisions of the Gross Receipts and Compensating Tax Act in which instance the seller must report and deduct such receipts on a CRS-1 Combined Report Form. Only those receipts from sales for subsequent resale in the ordinary course of business and from sales for use as an ingredient or component part of a manufactured product are exempt under Section 7-9-35 NMSA 1978 and not required to be reported on a CRS-1 Combined Report Form.

B. Example: T Co. mines turquoise; it sells some of its turquoise in its turquoise shop at the mine site and sells the remainder to a jewelry manufacturer, who delivers a nontaxable transaction certificate pursuant to Section 7-9-46 NMSA 1978, or who delivers a written statement pursuant to Section 7-9-74 NMSA 1978, that the turquoise purchased will be used in manufacturing jewelry. Even though the T Co. is required to pay the resources excise tax under Section 7-25-8 NMSA 1978, the receipts from the turquoise sold in the shop are subject to gross receipts tax, because the sale is not a sale for subsequent sale in the ordinary course of business or for use as an ingredient or component part of a manufactured product. However the receipts from the sale to the jewelry manufacturer are not subject to the gross receipts tax unless pursuant to Section 7-9-74 NMSA 1978, supra, sales to the jewelry manufacturer exceed $1,000 during a twelve-month period.