If you plan to buy goods tax-free for resale or claim manufacturing deductions, securing a valid New Mexico sales tax exemption certificate—officially called a Nontaxable Transaction Certificate (NTTC)—is essential. Unlike other states, New Mexico imposes a Gross Receipts Tax (GRT), and exemptions are granted through NTTCs issued by the state. Buyers must apply through the TAP portal, and sellers must retain executed certificates to lawfully deduct the transaction.
Navigating the state’s unique rules can be complex, especially for multi-state sellers. That’s where HOST comes in—offering full-service compliance support to simplify exemption certificate processes from end to end.
What Is an NTTC & When Do You Need One?
In New Mexico, a Nontaxable Transaction Certificate (NTTC) serves as a legal exemption from Gross Receipts Tax (GRT), allowing qualified receipts to be deducted—provided the buyer executes the certificate before the transaction. This differs from New Mexico’s Combined Reporting System (CRS) registration, which simply enables GRT filing for all receipts, not deductions.
When Is an NTTC Required?
A buyer needs to execute an NTTC when they want their purchase—such as goods for resale, manufacturing supplies, or specified services—to be exempt from GRT. Sellers can only claim deductions on their GRT return if they accept a properly executed NTTC, making it a critical compliance document.
New Mexico TRD’s official guidance in FYI‑204 clarifies that without an NTTC—and in no other format—these receipts cannot be deducted, regardless of buyer intent. Sellers must retain these executed certificates as audit-level documentation.
Why It Matters
- Buyers don’t pay GRT at the point of sale.
- Sellers reduce taxable gross receipts—but only if they collect valid certification in advance.
- Improper or retroactive execution of NTTCs can lead to rejected deductions or back-tax liabilities.
Understanding the difference between NTTCs and general gross receipts registration is the first step toward legally maximizing tax savings in New Mexico.
Types of NTTCs Explained
New Mexico offers various Nontaxable Transaction Certificates (NTTCs), each tailored to specific transaction types. Selecting the right certificate is essential to legally deducting Gross Receipts Tax (GRT) on eligible purchases. Here’s a breakdown of the most commonly used NTTC types:
Type 2 – Resale Certificate
Used when purchasing tangible goods or licenses for resale in the regular course of business (or leasing property for subsequent lease). It also covers prosthetic devices and certain fuel purchases by common carriers.
Type 11 / 12 – Manufacturing Exemptions
- Type 11: For consumable items incorporated into manufacturing, not tools or equipment.
- Type 12: For utilities consumed in manufacturing processes.
Both require the Form RPD-41378 application to obtain.
Type OSB – Out-of-State Buyer Certificate
Issued to out-of-state buyers who will resell property or use it in manufacturing outside New Mexico. The seller must apply for blank OSB certificates and provide them to buyers for execution.
Other Specialized NTTCs
Additional types address unique deduction scenarios, including:
- Type 9: Government agencies, nonprofits (501(c)(3)/(6)), tribal entities
- Type 15: Qualified federal contractors (requires contract documentation)
- Type 16: Accredited diplomats or film production companies involved in eligible purchases
- Type 17 & 18: Government/construction materials and geothermal plant equipment, respectively
Summary Table
| NTTC Type | Purpose |
| Type 2 | Resale of goods/licenses |
| Type 11 / 12 | Manufacturing consumables and utility exemptions |
| Type OSB | Out-of-state resale or manufacturing transactions |
| Other Types | Specialized use for nonprofits, contractors, diplomats, film, etc. |
Selecting the appropriate NTTC helps protect buyers and sellers—ensuring that tax deductions align with state law and are defensible during audits.
How to Apply via TAP Portal
If you’re registered with New Mexico’s Gross Receipts Tax system, applying for a Nontaxable Transaction Certificate (NTTC) is seamless using the Taxpayer Access Point (TAP). Here’s how to get started:
Prerequisite: CRS ID Required
Before requesting an NTTC, your business must have a CRS (CRS/CRS‑GIN) number—this is mandated by TAP access and required in New Mexico’s FYI‑204 guidance.
Step 1: Login & Locate NTTC Request Section
- Sign in at tap.state.nm.us
- Select your Gross Receipts Tax account from the summary page
- Click “More Account Options” → “View NTTC Options” → Then “Request Authorization”
Step 2: Submit Application
- Choose the NTTC type (Type 2, Type 11, OSB, etc.)
- Fill in buyer’s details and explain the scope of intended use
- Provide any legally required documentation if applying for special types (e.g. Type 11 or Type 9)
- Review and submit your request
Step 3: Execution & Delivery
- Approved applicants can execute NTTCs online instantly—buyers and sellers can view them within TAP
- Up to 5 paper NTTCs may be requested at once if CTS ID of seller is unknown; subsequent issuance pairs richly with executed NTTC record entry in TAP
- Executed certificates are electronically stored—printing is optional for audit purposes
Processing Timeline
Authorization typically takes a few hours to one business day. Once approved, you may execute NTTCs as needed. Executed forms are valid immediately and retained electronically within TAP.
Among NTTC types and usage rules, New Mexico’s TAP system enables efficient application and execution—as long as you follow guidelines precisely.
Accepting & Executing NTTCs (for Sellers)
Properly handling Nontaxable Transaction Certificates (NTTCs) isn’t just paperwork—it’s a legal requirement if you intend to deduct receipts from Gross Receipts Tax (GRT). Here’s how sellers should accept and manage NTTCs confidently.
Accepting Certificates from Buyers
- Only accept an NTTC when the buyer provides a properly executed certificate before the sale.
- The required fields include the buyer’s CRS ID, signature, certificate type, and detailed scope of use.
- Sellers may rely on one valid NTTC per eligible buyer type for multiple transactions of a similar kind—from resale to manufacturing.
Verify Certificates via TAP
- Sellers can confirm NTTC validity using TRD’s TAP portal or “Check CRS Status” feature.
- This real-time verification helps ensure certificates aren’t suspended, expired, or fraudulent before accepting them.
- Verifying accuracy helps protect your business from disallowed deductions.
Recordkeeping Essentials
Maintain audit-ready documentation for at least four years, as TRD may extend audit windows for serious noncompliance.
Required records include:
- Executed NTTC form with buyer’s name, type, and date
- Buyer’s CRS ID
- Type and purpose of purchase
- Evidence supporting legitimate exemption usage
- Electronic copies stored securely if certificate executed on TAP
Risks of Missteps
Failing to verify or maintain NTTCs can lead to:
- Disallowed deductions on GRT returns
- Retroactive tax assessments
- Penalties, interest charges, or audit flags
Keeping valid, verified certificates ensures compliance and protects both buyers and sellers in tax deductions.
Common Mistakes & Pitfalls
While NTTCs are powerful tools for reducing Gross Receipts Tax (GRT) obligations, using them improperly can trigger audits, penalties, or denied deductions. Here are the most common missteps businesses make—and how to avoid them.
Using NTTCs for Ineligible Transactions
An NTTC must only be used for qualifying transactions such as resale, manufacturing, or exempt services. A common mistake is using a resale NTTC (Type 2) for office supplies or business operations, which do not qualify for deduction. This misuse exposes the seller to back-tax liability.
Misclassifying Certificate Type
New Mexico offers over 15 different NTTC types. Using the wrong type—say, claiming a manufacturing exemption (Type 11) for general services—can nullify the deduction. Sellers should match the certificate type to the buyer’s activity and verify through TRD.
Accepting Expired or Invalid Certificates
Sellers sometimes fail to validate the NTTC’s status via the TRD TAP system. Accepting expired, suspended, or unverifiable NTTCs can result in denied deductions and penalties during an audit.
Failing to Report Deductible Receipts
Even with a valid NTTC, sellers must still report the total receipts on their GRT return and claim a corresponding deduction. Omitting this step results in overpayment or incorrect filing.
By staying vigilant and following TRD procedures, businesses can confidently use NTTCs without triggering compliance issues.
Resale Certificates Made Easy—And Everything Else, Too
While managing exemption certificates can be tedious, generating valid resale certificates doesn’t have to be. That’s where HOST steps in—with ResaleCertify, its proprietary platform that simplifies and automates resale certificate creation.
With ResaleCertify, businesses can:
- Generate accurate, compliant resale certificates in minutes
- Reduce manual errors and document mismatches
- Maintain a consistent audit trail
Whether you’re reselling goods in New Mexico or across multiple states, ResaleCertify ensures your paperwork is in order—without the administrative burden.
Beyond resale certificates, HOST is your one-stop solution for sales tax compliance. From,
- multi-state registration,
- monthly filings,
- economic nexus tracking,
- voluntary disclosure agreements, and
- audit defense,
HOST handles the complex stuff so you can focus on your business.
For remote sellers, SaaS companies, and online retailers, HOST ensures you stay ahead of changing rules without missing a deadline or facing penalties.
When it comes to resale compliance, HOST takes the guesswork out—so your team doesn’t have to second-guess a thing.
Conclusion: Get NTTC Compliance Right the First Time
Navigating the rules around the New Mexico sales tax exemption certificate—especially NTTCs—can be tricky. From choosing the right certificate type to executing and verifying it properly, each step matters for audit protection and legal compliance. Errors can trigger penalties or even invalidate your deduction claims.
With tools like ResaleCertify and full-service compliance support, HOST helps simplify the resale side of the process while managing your broader sales tax needs across states. If you’re unsure about your NTTC responsibilities, get in touch with HOST and stay ahead of the compliance curve.
Frequently Asked Questions (FAQs)
1. What is the difference between a CRS ID and an NTTC?
A CRS ID is your New Mexico business tax identification number used to report Gross Receipts Tax. An NTTC (Nontaxable Transaction Certificate) allows buyers to purchase certain goods or services tax-free and lets sellers deduct those receipts from GRT, provided the NTTC is properly executed.
2. Can any business apply for an NTTC?
No. Only businesses with a valid CRS ID and a qualifying purpose—such as resale, manufacturing, or nonprofit activities—may apply for and use NTTCs. Certificate type depends on your business activity and use case.
3. Do NTTCs expire?
Most NTTCs do not have an expiration date, but they must be valid at the time of the transaction. Sellers should verify the buyer’s CRS ID and keep complete records of executed certificates.
4. Can I apply for multiple NTTCs at once?
Yes. When applying through the TAP portal, businesses can request up to five NTTCs at a time, either in paper or electronic format.
5. What happens if I use the wrong NTTC type?
Using an incorrect or misclassified NTTC—such as using a resale certificate for a nonresale purpose—can result in denied deductions and back tax liabilities if audited. Always match the NTTC type to the transaction purpose.
