New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 201 - NONTAXABLE TRANSACTION CERTIFICATES, FARMERS' AND RANCHERS' STATEMENTS AND OTHER EVIDENCE REQUIRED TO ENTITLE PERSONS TO DEDUCTIONS
Section 3.2.201.14 - GOOD FAITH ACCEPTANCE OF NONTAXABLE TRANSACTION CERTIFICATES

A. Acceptance of nontaxable transaction certificates (nttcs) in good faith that the property or service sold thereunder will be employed by the purchaser in a nontaxable manner is determined at the time of each transaction. The taxpayer claiming the protection of a certificate continues to be responsible that the goods delivered or services performed thereafter are of the type covered by the certificate.

B. Example 1: A type 6 nttc, which may be executed and accepted for the purchase of construction materials, will not protect the deduction taken by an automobile dealer for receipts from the sale of automobile parts or a lumber yard for receipts from the sale of a power saw.

C. Example 2: An automobile dealer who accepts a type 2 nttc from an airline for the purchase of parts cannot rely on the type 2 (resale of tangibles) nttc to protect the deduction of receipts from such sale unless the dealer can demonstrate good faith acceptance by showing that the airline is in the business of reselling parts. A statement on the back of or attached to the certificate separately signed by a responsible employee of the airline showing that the airline runs a retail parts store would protect the dealer who did not know the statement was false.