At Graphic Sky Printing, we do a lot of work for artists, state agencies and non-profits. The subject of taxes comes up frequently. New Mexico’s tax laws are unique, and sometimes hard to understand. We’ve put together this guide to help you navigate the finer details.
Fact #1: The seller (Graphic Sky) is responsible for paying Gross Receipts Tax (GRT is New Mexico’s version of a “sales tax”).
We must prove that each sale is legitimately tax exempt to deduct it. Therefore, we require our clients to do the same. An audit by New Mexico Tax and Revenue will look for the appropriate paperwork ( Non-Taxable Transaction Certificates or NTTCs) to be on file, and dated pre-sale.
Fact #2: PRINTING IS CONSIDERED A SERVICE and therefore is taxable to everyone, including non-profits and state agencies.
This may come as a surprise to our non-profit friends, because not all our competition is following the letter of the law. If we sold office supplies (paper and toner), these could be considered for Type 2 or Type 9 Non Taxable Transaction Certificate (NTTC) Exemptions, but because of the labor involved in printing, it is considered by the New Mexico Taxation and Revenue Department to be a service, and these types of NTTCs do not apply.
Fact #3: THE ONLY EXCEPTIONS are OUT-OF-STATE use and RESALE
OUT-OF-STATE – The client and delivered job are both outside of New Mexico, with a tax identification number from their home state.
FOR RESALE – If the client is reselling the printing and collecting tax (i.e. designers who act as print brokers, artists selling fine art prints, postcard sets, etc.). This is most common reason our clients request tax exempt status. This requires a TYPE 5 NTTC SERVICES FOR RESALE Form to be executed by the client.
You’ll need our CRS number, which is: 03-011002-00-5.
How NTTCs work:
To avoid “double taxation” only the end user of a product or service should be taxed. The purchase of material and services can be exempt for resale clients, here is a typical scenario:
In this diagram, the first circle “GOODS”, would include our paper suppliers. We would execute a TYPE 2 NTTC for them. We perform the “PRINTING Service”, and can sell that service tax free to our reseller clients with a TYPE 5 NTTC executed by the client. The “RESELLER” would then collect the tax from the “CONSUMER”, when they resell our printing service.