New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 205 - DEDUCTION - GROSS RECEIPTS TAX - SALE OF TANGIBLE PERSONAL PROPERTY FOR RESALE
Section 3.2.205.20 - USE OF TANGIBLE PERSONAL PROPERTY BY HOTELS, MOTELS AND SIMILAR FACILITIES
Current through Register Vol. 35, No. 18, September 24, 2024
A. Hotels, motels, inns, rooming houses and similar facilities are engaged in the business of granting a license to use real and tangible personal property. Tangible personal property provided to a guest in conjunction with the license and intended to be consumed by the guest, such as soap, paper products and single serving packets of coffee, is resold in the ordinary course of business.
B. Example 1: M, a motel, buys from Z bathroom tissue and single-serving coffee packets to use in M's motel business. M maintains that it is entitled to execute a Type 2 nontaxable transaction certificate (nttc) in purchasing the tangible personal property. M contends that, because the cost of the tangibles is included in the charge M sets for rooms, M is reselling the products in combination with the license to use the room. M is correct and may execute a Type 2 nttc to purchase these goods.
C. Example 2: H, a hotel, offers its guests at no additional charge a continental breakfast with the rental of rooms. H may execute a Type 2 nttc to purchase the food provided at these breakfasts and related non-food tangible personal property, such as paper napkins, provided in conjunction with the food.
D. Tangible personal property, such as sales slips, computer paper or forms, cleaning materials, vacuum cleaners and computers, to be used or consumed by the hotel, motel, inn or similar facility or its staff is not resold in the ordinary course of business. Tangible personal property provided by a hotel, motel, inn or similar facility for the use of guests, such as furniture, tableware, bedding and towels, but intended to be retained by the facility are not resold in the ordinary course of business. Tangible personal property not resold by itself or in conjunction with other tangible personal property or licenses is not deductible under Section 7-9-47 NMSA 1978. A Type 2 nttc may not be executed with respect to such tangible personal property.
E. This version of Section 3.2.205.20 NMAC is retroactively applicable to receipts from transactions on or after 11/1/97.
