AN ACT
RELATING TO TAXATION; SETTING JANUARY
1, 2005 AS THE INITIATION DATE OF THE NEXT SERIES OF NONTAXABLE TRANSACTION
CERTIFICATES; AMENDING SECTIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT.
BE IT ENACTED BY THE LEGISLATURE OF
THE STATE OF NEW MEXICO:
Section 1. Section 7-9-43 NMSA 1978 (being Laws 1966,
Chapter 47, Section 13, as amended) is amended to read:
"7-9-43. NONTAXABLE TRANSACTION CERTIFICATES AND OTHER
EVIDENCE REQUIRED TO ENTITLE PERSONS TO DEDUCTIONS--
RENEWAL.--
A. All nontaxable transaction certificates of
the appropriate series executed by buyers or lessees should be in the
possession of the seller or lessor for nontaxable transactions at the time the
return is due for receipts from the transactions. If the seller or lessor is not in possession
of the required nontaxable transaction certificates within sixty days from the
date that the notice requiring possession of these nontaxable transaction
certificates is given the seller or lessor by the department, deductions
claimed by the seller or lessor that require delivery of these nontaxable
transaction certificates shall be disallowed.
The nontaxable transaction certificates shall contain the information
and be in a form prescribed by the department.
The department by regulation may deem to be nontaxable transaction
certificates documents issued by other states or the multistate tax commission
to taxpayers not required to be registered in New Mexico. Only buyers or lessees who have a
registration number or have applied for a registration number and have not been
refused one under Subsection C of Section 7‑1-12 NMSA 1978 shall execute
nontaxable transaction certificates issued by the department. If the seller or lessor has been given an
identification number for tax purposes by the department, the seller or lessor
shall disclose that identification number to the buyer or lessee prior to or
upon acceptance of a nontaxable transaction certificate. When the seller or lessor accepts a
nontaxable transaction certificate within the required time and in good faith
that the buyer or lessee will employ the property or service transferred in a
nontaxable manner, the properly executed nontaxable transaction certificate
shall be conclusive evidence, and the only material evidence, that the proceeds
from the transaction are deductible from the seller's or lessor's gross
receipts.
B. Properly executed documents required to
support the deductions provided in Sections 7-9-57, 7-9-58 and 7-9-74 NMSA 1978
should be in the possession of the seller at the time the return is due for
receipts from the transactions. If the
seller is not in possession of these documents within sixty days from the date
that the notice requiring possession of these documents is given to the seller
by the department, deductions claimed by the seller or lessor that require
delivery of these documents shall be disallowed. These documents shall contain the information
and be in a form prescribed by the department.
When the seller accepts these documents within the required time and in
good faith that the buyer will employ the property or service transferred in a
nontaxable manner, the properly executed documents shall be conclusive
evidence, and the only material evidence, that the proceeds from the
transaction are deductible from the seller's gross receipts.
C. Notice, as used in this section, is
sufficient if the notice is mailed or served as provided in Subsection A of
Section 7-1-9 NMSA 1978. Notice by the
department under this section shall not be given prior to the commencement of
an audit of the seller required to be in possession of the documents.
D. On January 1, 2005, every nontaxable
transaction certificate, except for nontaxable transaction certificates of the
series applicable to the twelve-year period beginning January 1, 2005 and
issued by the department prior to that date, is void with respect to
transactions after December 31, 2004.
The department shall issue separate series of nontaxable transaction
certificates for the twelve-year period beginning January 1, 2005 and for each
twelve-year period beginning on January 1 of every twelfth year succeeding
calendar year 2005. A series of
nontaxable transaction certificates issued by the department for any
twelve-year period may be executed by buyers or lessees for transactions
occurring within or prior to that twelve-year period but is not valid for
transactions occurring after that twelve-year period, except the nontaxable
transaction certificates issued by the department for the period January 1,
1992 to December 31, 2001 may be executed by buyers or lessees for transactions
occurring prior to December 31, 2004.
For administrative convenience, the department may accept and approve
qualifying applications for the privilege of executing nontaxable transaction
certificates and pre-issue certificates of any series within the six-month
period immediately preceding the beginning of the twelve-year period to which the
series of nontaxable transaction certificates applies.
E. To exercise the privilege of executing
appropriate nontaxable transaction certificates, a buyer or lessee shall apply
to the department for permission to execute nontaxable transaction
certificates, except with respect to documents issued by other states or the
multistate tax commission that the department has deemed to be nontaxable
transaction certificates. If a person is
shown on the department's records to be a delinquent taxpayer or to have a
non-filed period, the department may refuse to approve the application of the
person until the person has filed returns for all non-filed periods and is no
longer shown to be a delinquent taxpayer, and the taxpayer may protest that
refusal pursuant to Section 7-1-24 NMSA 1978.
Upon the department's approval of the application, the buyer or lessee
may request appropriate nontaxable transaction certificates for execution by
the buyer or lessee; provided that if a person is shown on the department's
records to be a delinquent taxpayer or to have a non-filed period, the
department may refuse to issue nontaxable transaction certificates to the
person until the person has filed returns for all non-filed periods and is no
longer shown to be a delinquent taxpayer.
The taxpayer may protest that refusal pursuant to Section 7-1-24 NMSA
1978. The department may require a buyer
or lessee requesting and receiving nontaxable transaction certificates for
execution by that buyer or lessee to report to the department the names,
addresses and identification numbers assigned by the department of the sellers
and lessors to whom they have delivered nontaxable transaction
certificates. The department may require
a seller or lessor engaged in business in New Mexico to report to the
department the names, addresses and federal employer identification numbers or
state identification numbers for tax purposes issued by the department of the
buyers or lessees from whom the seller or lessor has accepted nontaxable
transaction certificates."
Section 2. Section 7-9-54 NMSA 1978 (being Laws 1969,
Chapter 144, Section 44, as amended) is amended to read:
"7-9-54. DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL
GROSS RECEIPTS TAX--SALES TO GOVERNMENTAL AGENCIES.--
A. Receipts from selling tangible personal
property to the United States or New Mexico or any governmental unit or
subdivision, agency, department or instrumentality thereof may be deducted from
gross receipts or from governmental gross receipts. Unless contrary to federal law, the deduction
provided by this subsection does not apply to:
(1) receipts from selling metalliferous mineral
ore;
(2) receipts from selling tangible personal
property that is or will be incorporated into a metropolitan redevelopment
project created under the Metropolitan Redevelopment Code;
(3) receipts from selling construction material;
or
(4) that portion of the receipts from performing
a "service" that reflects the value of tangible personal property
utilized or produced in performance of such service.
B. Receipts from selling tangible personal
property for any purpose to an Indian tribe, nation or pueblo or any
governmental subdivision, agency, department or instrumentality thereof for use
on Indian reservations or pueblo grants may be deducted from gross receipts or
from governmental gross receipts.
C. When a seller, in good faith, deducts
receipts for tangible personal property sold to the state or any governmental
unit, subdivision, agency, department or instrumentality thereof, after
receiving written assurances from the buyer's representative that the property
sold is not construction material, the department shall not assert in a later
assessment or audit of the seller that the receipts are not deductible pursuant
to Paragraph (3) of Subsection A of this section."
HB 339
Page 6