New Mexico – Expanded Deductions for Sales to Manufacturers

SALT Report 2232 – The New Mexico Taxation and Revenue Department issued an informational guide regarding the deductions available for certain sales to manufacturers. In 2012, the Governor signed into law a bill that expands the deduction for the sale of tangible personal property to manufacturers. The new Bill amends the current deduction provided in section 7-9-46 NMSA 1978, to include tangible personal property that is consumed in the manufacturing process.

The deduction will be phased-in as follows:

  • 20% of receipts received in calendar year 2013
  • 40% of receipts received in calendar year 2014
  • 60% of receipts received in calendar year 2015
  • 80% of receipts received in calendar year 2016, and
  • 100% of receipts received on or after January 1, 2017

Each of the deductions in section 7-9-46 NMSA 1978 must be supported by a Nontaxable Transaction Certificate (NTTC), and must be reported separately on the CRS-1 Form. The publication details which NTTC is required to support each deduction, as well as how the separate reporting is to be done. The publication also addresses how to report deductible receipts, and how to report sales of utilities consumed in the manufacturing process.

The expanded deductions went into effect January 1, 2013.

For Further Information

New Mexico Taxation and Revenue Department – FYI-275 Deductions for Certain Sales to Manufacturers