N.M. Code R. § 3.16.4.10 – Indirect Sales to the United States or for Export

A. The tax consequences of sales of gasoline to the United States or for export by a wholesaler or retailer are illustrated by the following examples. These examples concern only the liability of the parties to the department and do not affect the obligation of any party to pay the price for the gasoline to the seller. The fact that the price may include an amount corresponding to the tax does not make that amount a tax on the purchaser.
B. Examples:
(1) X, a distributor, received one hundred (100) gallons of gasoline in May, paid the gasoline tax and resold the gasoline to Y, a wholesaler. Y then sold the gasoline to the United States. Y reported this sale on the monthly report to the department as required by Section 7-13-6 NMSA 1978. If Y furnishes satisfactory proof to X, X may either deduct the one hundred (100) gallons from the amount of gasoline received for that month of May or may elect to take the deduction in any subsequent month in which gasoline is received. Satisfactory proof of Y's sale to the government is required to be retained by both X and Y for at least three years from the end of the calendar year in which the gasoline was sold.
(2) X, a distributor, received one hundred (100) gallons of gasoline in May, paid the gasoline tax and resold the gasoline to Y, a wholesaler, who resold it to Z, a retailer. Z sold ten (10) gallons to the United States when a United States government vehicle filled up at Z's station. Z reports to Y that this amount of gasoline had been sold to the United States. Y reported this sale on the monthly report to the department as required by Section 7-13-6 NMSA 1978. If Y furnishes satisfactory proof to X, X may deduct ten (10) gallons from the amount of gasoline received in that month of May or any subsequent month in which gasoline is received. Satisfactory proof of Z's sale to the United States is required to be retained by X and Y for at least three years from the end of the calendar year in which the gasoline was sold.
(3) X, a distributor, received one hundred (100) gallons of gasoline in May, paid the gasoline tax and resold the gasoline to Y, a wholesaler. Y delivers the one hundred (100) gallons of gasoline to a customer in Texas. Y reported this export sale on the monthly report pursuant to Section 7-13-6 NMSA 1978. If Y furnishes satisfactory proof to X, X may deduct one hundred (100) gallons from the amount of gasoline received in that month of May or any subsequent month in which gasoline is received. Satisfactory proof of Y's export is required to be retained by both X and Y for at least three years from the end of the calendar year in which the sale was made.
[1/23/73, 8/31/96; 3.16.4.10 NMAC - Rn & A, 3 NMAC 16.4.10, 6/14/01]