New Mexico GRT Deductions and Exemptions: Resale, Services and Common Business Deductions

New Mexico does not have a sales tax. It has a gross receipts tax (GRT) that is charged to the seller, so most of the paperwork comes down to one question: is this sale taxable, or does a deduction apply? This guide covers the deductions small businesses use most, when a Nontaxable Transaction Certificate (NTTC) is required, and how the pieces fit together. If you searched for new mexico nttc or nm nttc, the answer is in the sections below.

Informational content only. This guide is not legal or tax advice. It summarizes New Mexico statutes and Taxation and Revenue Department (TRD) guidance, and those rules change. For a specific transaction, confirm the answer with TRD or a qualified CPA or attorney, especially if you sell across state lines or provide manufacturing services.

How the New Mexico gross receipts tax works

New Mexico taxes gross receipts, not sales. Selling or leasing property, selling franchises and performing services in New Mexico are all taxable unless a deduction or exemption applies. The seller is liable for the tax. If you state the tax separately on the invoice, you may pass it along to the customer, but the liability stays with you.

The state gross receipts tax rate is 4.875%. Combined state and local rates run from 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027. The local portion depends on the jurisdiction involved, so confirm the rate for your location on the TRD website before you set prices or build invoices.

Deductions are not business expenses

The most common mistake is treating every business cost as a deduction. TRD is clear that business expenses are never deductible. Rent, payroll, insurance, software and fuel are real costs, but they do not reduce the gross receipts you report for New Mexico. A GRT deduction is narrower. It removes a specific category of receipts that the statutes allow you to exclude, such as a sale for resale.

You will see both "deduction" and "exemption" used for this topic, and grt exemptions is a common search term. This guide uses "deduction" because that is what goes on the return. Claimed deductions are reported on form TRD-41413.

When you need an NTTC and when you don't

A Nontaxable Transaction Certificate is the document a buyer gives you to support a deduction. It is what most people mean by new mexico nontaxable transaction certificate or nm nontaxable transaction certificate. Not every deduction requires one, and the rule depends on the statute:

• Alternative evidence (NMSA 7-9-43). For many deductions, alternative evidence often works in place of an NTTC. Check whether it applies before you ask a customer for a form.
• Type 11 or 12 NTTC (NMSA 7-9-46). Deductions under this section need a Type 11 or 12 NTTC, so alternative evidence does not substitute. Confirm with TRD which type matches your transaction before you rely on it.
• Buyer's NTTC for manufacturing services (NMSA 7-9-75). Manufacturing services require the buyer's NTTC.

Resale deductions: property, licenses and services

Sellers can deduct receipts from selling property, licenses or services to a buyer who will resell them, when the paperwork is in order. Two statutes cover this:

• Property and licenses (NMSA 7-9-47). Covers receipts from selling property and licenses for resale.
• Services (NMSA 7-9-48). Covers receipts from selling services for resale.

Resale NTTCs come from buyers with a Business Tax Identification Number (BTIN). Those buyers get and execute the certificate on the TRD Taxpayer Access Point (TAP). Ask for it before you invoice, and file it with your records.

Interstate commerce (NMSA 7-9-55)

NMSA 7-9-55 covers sales in interstate commerce. If you sell to customers outside New Mexico, check whether this section applies to your sale and confirm what documentation TRD expects. Do not assume that an out-of-state customer's paperwork qualifies automatically. The fact that a customer is out of state does not by itself create the deduction.

Other states' resale certificates are not valid

A resale certificate from another state is not valid in New Mexico, even when the buyer is a legitimate reseller in its home state. Many out-of-state customers hand over their home-state form without thinking about it. For a New Mexico deduction, you need the New Mexico NTTC, executed by the buyer on TAP. Ask for it at the time of sale, not when an auditor asks for it later.

How to collect and keep an NTTC

1. Confirm the buyer has a BTIN, since NTTCs are created and executed through that registration.
2. Have the buyer create and execute the NTTC on TAP.
3. One NTTC covers like transactions with that customer. You do not need a new certificate for every invoice of the same kind.
4. TRD treats a properly executed NTTC that you accepted in good faith as conclusive. An accurate, complete form is what settles the question, so check it before you accept it.
5. Keep the NTTC, or the alternative evidence, on file. The seller keeps the record, so store it with your sales records for the same period.

Reporting deductions on the TRD-41413 return

Deductions go on the TRD-41413 return. Keep your NTTCs, alternative evidence and sales records together so you can support every deduction you claim. TRD publications FYI-105 and FYI-204 explain these rules in more detail. Find them through the TRD website, and make sure you are reading the current version, since guidance gets revised.

Common mistakes to avoid

• Subtracting business expenses from gross receipts.
• Accepting another state's resale certificate in place of a New Mexico NTTC.
• Assuming alternative evidence works for a deduction that needs a Type 11 or 12 NTTC under 7-9-46.
• Taking a certificate from a buyer without confirming the buyer has a BTIN.
• Failing to keep copies of certificates and evidence for each deduction.
• Pricing and invoicing from the 4.875% state rate alone without checking the combined local rate.

Registration and local requirements

New Mexico has no statewide general business license. The BTIN is free from TRD and is a tax registration, not a license. You register for it through the TRD registration page. Activities that need a specific license are handled through the Regulation and Licensing Department. Cities and some counties may charge their own flat annual registration, so check with your local government before you open.

Next steps

1. Get your BTIN from TRD. Registration is free, and you can start at the TRD registration page.
2. List each deduction you expect to claim and identify its statute.
3. Decide whether alternative evidence or an NTTC is required. For 7-9-46 deductions, confirm the Type 11 or 12 requirement with TRD.
4. Ask buyers for NTTCs at the time of sale, and confirm that each one is properly executed.
5. Keep your records and report the deductions on the TRD-41413 return.

For unusual sales, multi-state operations or manufacturing services, bring this list to a qualified CPA or attorney and confirm the answer with TRD before you file.