When you are starting a business in New Mexico and intend to sell goods to your customers, obtaining a New Mexico resale certificate can be beneficial. New Mexico is one of the few states that does not have a state sales tax. Instead, businesses register for a Gross Receipts Tax permit.
This permit is similar to a seller’s permit or sales tax ID number in other states. However, instead of sales taxes being charged to your customers, your business is charged a business tax. Even though the business is taxed, it is common for business owners to collect the taxes from their customers based on the value of the item or service provided.
A resale certificate allows your business to avoid paying the gross receipts taxes that are passed along to consumers. You do not have to pay these taxes on any inventory items you purchase from your suppliers and vendors.
You may have heard a resale certificate in New Mexico called one of several different names, including:
In New Mexico, you must have a resale certificate to have gross receipts taxes waived on products and goods you intend to resell. There are two different types of resale certificates the state offers businesses.
The first one is the Non-Taxable Transaction Certificate (NTTC) and is for any business that operates within the state, such as clothing stores, toy stores, and auto parts stores. However, before submitting an application for your NTTC, you must first obtain your Gross Sales Tax permit.
The second type of resale certificate is for businesses that purchase products and goods from suppliers and vendors in New Mexico, but their business is operated in a different state. In this case, your business will need one of the following:
Furthermore, New Mexico is one of several states that will not recognize out-of-state wholesale certificates. Therefore, you have to apply for and obtain one of the certificates mentioned above to have gross receipt taxes waived on inventory items for your out-of-state business.
Most states should honor your NTTC when purchasing inventory items. However, several states will not, such as California. Therefore, you would need to apply for a resale certificate in those states, just like out-of-state businesses have to do in New Mexico.
In 1992, New Mexico did away with expiration dates for resale certificates for both in-state and out-of-state businesses. However, a company is required to file for a new resale certificate when any of the following apply:
Deciding what type of New Mexico wholesale permit you need is not too difficult, based on where your business is physically located.
However, determining which application form you need to fill out and submit can be confusing. Fortunately, FastFilings has simplified the process to make applying for and obtaining your resale certificate quicker and easier.
Please keep in mind the state of New Mexico will only issue a maximum of five NTTCs. So, if you initially only request one or two and need another one later, you have to submit another application for the additional resale certificate.
Therefore, we highly recommend you request the maximum of five certificates when filing your initial application to get your NTTCs. This way, you will already have additional certificates on hand should you ever need them.
Get your New Mexico NTTCs at FastFiling today. We can also help you obtain your Gross Receipt Tax permit. Do not hesitate to use our contact form if you have further questions or require additional assistance.
