Section 18. Compensating Tax On Dealer Use Of Parts

The value of parts, motor oils and similar items taken from inventory held for sale, or purchased under Type 2 (resale) NTTCs, by automobile dealers for use in repairing or maintaining vehicles used by the dealers in the operation of the dealerships, as distinguished from vehicles held for sale, is subject to compensating tax. A new vehicle which has been titled and registered, other than pursuant to Subsection C of Section 66-3-118 NMSA 1978 pertaining to new vehicles held for sale and allowed to be registered without payment of the motor vehicle excise tax, will be treated as a vehicle used in the dealer's business for purposes of applying Section 3.2.10.18 NMAC. [6/28/1989, 11/26/1990, 11/15/1996, 3.2.10.18 NMAC - Rn & A, 3 NMAC 2.7.18, 4/30/2001] 3.2.10.19 TANGIBLE PERSONAL PROPERTY FURNISHED TO DEALERS BY OUT-OF-STATE SERVICE CONTRACT ADMINISTRATORS: Tangible personal property, such as contract forms and promotional and administrative materials, furnished to New Mexico dealers by out-of-state companies which undertake to administer automotive service contracts for a fee is property acquired as a result of a transaction with a person located outside New Mexico that would have been subject to the gross receipts tax had the property been acquired from a person with nexus with New Mexico. The value of the tangible personal property is subject to compensating tax to be paid by the dealers when the property is stored, used or consumed in New Mexico.