New Mexico Administrative Code
Title 3 - TAXATION
Chapter 2 - GROSS RECEIPTS TAXES
Part 208 - DEDUCTION - GROSS RECEIPTS TAX - LEASE FOR SUBSEQUENT LEASE
Section 3.2.208.8 - GENERAL QUALIFICATIONS

Universal Citation: 3 NM Admin Code 3.2.208.8

Current through Register Vol. 35, No. 18, September 24, 2024

A. To qualify to issue a nontaxable transaction certificate (nttc) under the provisions of Section 7-9-50 NMSA 1978, the business issuing the nttc must subsequently lease the tangible property in the ordinary course of business. If the seller accepts an nttc in good faith and if the tangible property is not subsequently leased in the ordinary course of business, the lessee will owe compensating tax on the total amount paid to the lessor under the terms of the lease.

B. Example: H manufactures fishing tools for use in the oil field. H leases these tools to J, a rental company, which in turn rents the tools to P, a drilling company. If J delivers a nontaxable transaction certificate to H, H may deduct the amount of its rental receipts from its gross receipts.

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