NMSA 1978, § 7-9-43 — 7-9-43

Nontaxable transaction certificates and other evidence
required to entitle persons to deductions.

# A.

Except as provided in Subsection B of this section, a person may establish
entitlement to a deduction from gross receipts allowed pursuant to the Gross Receipts
and Compensating Tax Act by obtaining in good faith a properly executed nontaxable
transaction certificate from the purchaser. Nontaxable transaction certificates shall
contain the information and be in a form prescribed by the department. The department
by rule 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.

# B.

Except as provided in Subsection C of this section, a person who does not
comply with Subsection A of this section may establish entitlement to a deduction from
gross receipts by presenting alternative evidence that demonstrates the facts necessary
to support entitlement to the deduction, but the burden of proof is on that person.
Alternative evidence includes:
(1) invoices or contracts that identify the nature of the transaction;
(2) documentation as to the purchaser's use or disposition of the property or
service;
(3) a statement from the purchaser indicating that the purchaser sold or
intends to resell the property or service purchased from the seller, either by itself or in
combination with other property or services, in the ordinary course of business. The
statement from the purchaser shall include:
(a) the seller's name;
(b) the date of the invoice or date of the transaction;
(c) the invoice number or a copy of the invoice;
(d) a copy of the purchase order, if available;
(e) the amount of purchase; and
(f) a description of the property or service purchased or leased; or
(4) any other evidence that demonstrates the facts necessary to establish
entitlement to the deduction.

# C.

Subsection B of this section does not apply to sellers of electricity or fuels that
are parties to an agreement with the department pursuant to Section 7-1-21.1 NMSA
1978 regarding the deduction pursuant to Subsection B of Section 7-9-46 NMSA 1978.

# D.

When a person accepts in good faith a properly executed nontaxable transaction
certificate from the purchaser, the properly executed nontaxable transaction certificate
shall be conclusive evidence that the proceeds from the transaction are deductible from
the person's gross receipts.

# 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.

# F.

If a person has accepted in good faith a properly executed nontaxable
transaction certificate, but the purchaser has not employed the property or service
purchased in the nontaxable manner or has provided materially false or inaccurate
information on the nontaxable transaction certificate, the purchaser shall be liable for an
amount equal to any tax, penalty and interest that the seller would have been required
to pay if the seller had not complied with Subsection A of this section.

# G.

Any person who knowingly or willfully provides false or inaccurate information on
a nontaxable transaction certificate, to obtain a nontaxable transaction certificate or as
alternative evidence provided in support of a claim for a deduction, may be subject to
prosecution under Sections 7-1-72 and 7-1-73 NMSA 1978.