Current through Register Vol. 35, No. 18, September 24, 2024
A.
Transporting property. Receipts of a carrier from transporting
property for the seller of the property who prepays the transportation charges
may be deducted from the carrier's gross receipts if the seller executes with
the carrier a nontaxable transaction certificate. The sale of the
transportation service and property must be in the ordinary course of the
seller's business and subject to the gross receipts tax on its subsequent sale.
Otherwise, the seller will be liable for compensating tax on such transaction.
This version of Subsection A of Section 3.2.206.14 NMAC applies to transactions
occurring on or after July 1, 2000.
B.
Transporting property.
(1) If a seller of tangible personal property
employs a contract or common carrier to transport that property and delivers a
nontaxable transaction certificate (nttc) to the carrier, and if the receipts
from the sale of the property are not subject to the gross receipts tax, the
seller will be subject to the compensating tax on the value of the
transportation service purchased.
(2) Example: X sells tangible personal
property to Y, a governmental entity, and hires a carrier to transport the
tangible personal property to Y. X will be subject to compensating tax on the
value of the transportation service if X delivers an nttc to the carrier. It is
immaterial that X separately states the value of the transportation service in
the billing to Y.
C.
Hauling prefabricated buildings.
(1) The hauler of prefabricated buildings may
take a deduction from gross receipts pursuant to Section
7-9-48
NMSA 1978 if:
(a) the prefabricated builder
resells the hauling service to customers who contract to purchase the building
which has been moved to a permanent site; and
(b) the prefabricated builder executes with
the hauler a nontaxable transaction certificate (nttc); and
(c) the subsequent sale is in the ordinary
course of the prefabricated builder's business and subject to the gross
receipts tax.
(2) This
version of Subsection C of Section 3.2.206.14 NMAC applies to transactions
occurring on or after July 1, 2000.
D.
Transportation services.
(1) A person who subcontracts to haul
property for a person who holds a certificate of public convenience and
necessity issued by the public regulation commission of the state of New Mexico
may accept a nontaxable transaction certificate (nttc) for the services.
Receipts from hauling such property may be deducted from gross receipts
provided the person provides both the transporting equipment and the
operator.
(2) If the issuer of the
nttc fails to meet the criteria of Section
7-9-48
NMSA 1978, the issuer will become liable for compensating tax on the value of
the services at the time they were rendered.
(3) If the subcontractor provides only the
transporting equipment, the subcontractor is engaged in the business of leasing
property and the receipts are subject to the gross receipts tax. The issuance
or receipt of an nttc in this situation would be improper.
