Form Rpd-41378 - Application For Type 11 Or 12 Nontaxable Transaction Certificates (Page 8 of 14) in pdf

RPD-41378

State of New Mexico - Taxation and Revenue Department

Rev. 04/30/2013

Application for Type 11 or 12 Nontaxable Transaction Certificates

Deduction for Tangibles Consumed in the Manufacturing Process

Instructions

Page 3 of 9

• If applying for a Type 11 NTTC for tangibles, other than utilities, you need to complete and submit only the

first page of this Form RPD-41378 to the Department. You do not need to file Form ACD-31050 to obtain Type

11 NTTCs.

• If applying for a Type 12 NTTC for utilities consumed in the manufacturing process, you need to complete and

submit the first page of this Form RPD-41378, plus any of the applicable Sections E, G, W or O to the Depart-

ment.

Section E, if electricity is consumed in the manufacturing process;

Section G, if natural gas is consumed in the manufacturing process;

Section W, if water is consumed in the manufacturing process, or

Section O, if any other utility is consumed in the manufacturing process.

If the manufacturer has more than one location where the manufacturing process occurs and utilities are con-

sumed in the manufacturing process, the manufacturer must submit a separate Section E, G, W or O for each loca-

tion. The manufacturer must submit applications for Type 12 NTTCs for different utilities separately.

Form RPD-41377, Manufacturers Agreement to Pay Gross Receipts Tax on Behalf of a Utility Company for Certain

Utility Sales, must also be completed and signed by the utility company to whom the utility is purchased and the

manufacturing business consuming the utility. A Form RPD-41377 must be completed for each utility company

and must specify the effective date of the agreement. The agreement must be submitted with Form RPD-41378,

Application for Type 11 or 12 Nontaxable Transaction Certificates.

Additionally, the manufacturer who is taking the deduction for utilities consumed in the manufacturing process

must establish the anticipated annual percentage of the utilities that are actually consumed in the manufacturing

of the product. The manufacturer’s percentage of use of the utility consumed in manufacturing of a product is

declared and reported to the Department on the appropriate Section E, G, W or O, filed at the time the NTTC ap-

plication is submitted. The manufacturer may base its percentage on any reasonable criteria - for example square

footage, engineer’s report, measured usage. If at any time the usage changes, the manufacturer must submit a new

Section E, G, W or O to report the change.

Type 12 NTTCs expire three years after the effective date. The manufacturer must re-apply for the Type 12

NTTCs to continue taking advantage of the deduction for utilities consumed in the manufacturing process, and

utility companies must begin paying the gross receipts on the sale of any utilities to the manufacturer if a valid

Type 12 NTTC is not in their possession prior to the expiration date. The expiration date is printed on the face of

the Type 12 NTTC.

You cannot submit Form RPD-41378 and back-up through the web file application, NTTC-NET. You must submit

this form and back-up separately to your local district office as listed on the last page of these instructions.

Claiming the Deduction:

Type 2 -

For sales of tangible personal property to a manufacturer that will become an ingredient or component

part of the product that the business is manufacturing, the seller claims a deduction of 100% of the receipts for the

sale of such tangible personal property.

Form Rpd-41378 - Application For Type 11 Or 12 Nontaxable Transaction Certificates Page 8