N.M. Admin. Code § 3.2.206.14

Current through Register Vol. 36, No. 1, January 14, 2025

Section 3.2.206.14 - TRANSPORTATION SERVICES

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.

N.M. Admin. Code § 3.2.206.14

6/18/79, 11/5/81, 4/7/82, 5/4/84, 4/2/86, 11/26/90, 11/15/96, 3.2.206.14 NMAC - Rn, 3 NMAC 2.48.14 & A, 10/31/2000; A, 5/31/01