REGARDING NON-TAXABLE TRANSACTION CERTIFICATES
The New Mexico Real Estate Appraisers Board (Board) recently deliberated upon a hearing on September 27, 2013 in response to a complaint from a New Mexico Appraiser. The issue at hearing was the non-issuance of a non-taxable transaction certificate (NTTC) from an Appraisal Management Company (AMC). The AMC was found in violation and the Board issued a DECISION AND ORDER for case number 15, MC11-04-13 which included the following:
CONCLUSIONS OF LAW
Based on the findings of fact, the Board hereby reaches the following conclusions of law:
- As a registrant/licensee, Respondent is subject to the jurisdiction of the Board pursuant to the Uniform Licensing Act, NMSA 1978, Sections 61-1-1 to -33; the New Mexico Appraisal Management Company Registration Act, NMSA 1978, §47-14-1 to § 47-14-23 (2009, as amended through 2010); and the New Mexico Appraisal Management Company Registration Board Rules and Regulations, Title 16, Chapter 65, NMAC.
- The New Mexico Appraisal Management Company Registration Act, NMSA, 1978, §47-14-1 to -23 (2009, as amended through 2010), in conjunction with the Uniform Licensing Act, NMSA 1978, §61-1-1 to -33 (1953, as amended through 2004), empowers the Board to censure an AMC.
- Section 47-14-21 of the Appraisal Management Company Registration Act states that the Board may censure an appraisal management company, conditionally or unconditionally suspend or revoke any registration issued under the Appraisal Management Company Registration Act, levy fines or impose civil penalties not to exceed twenty-five thousand dollars ($25,000) per violation if, in the opinion of the board, an appraisal management company is attempting to perform, has performed or has attempted to perform any of the following acts:
- committing any act in violation of the Appraisal Management Company Registration Act;
- violating any rule or regulation adopted by the board in the interest of the public and consistent with the provisions of the Appraisal Management Company Registration Act; or
- (…); or
- violating the Real Estate Appraisers Act.
- Section 47-14-18(F) of the Act states that an appraisal management company shall provide an appraiser with the appropriate nontaxable transaction certificate pursuant to Section 7-9-48, NMSA 1978. See 220.127.116.11(D)(1)(b) NMAC.
- Board Rule 18.104.22.168(F)(3) NMAC states that an appraisal management company shall maintain a board file containing a list of all non-taxable transaction certificates issued.
- Board Rule 22.214.171.124 NMAC states that by acceptance of registration shall agree to abide by the Board rules.
- Respondent, by acceptance of registration and by signing the application and renewal application agreed to abide by Board statutes and rules.
- The Administrative Prosecutor proved by a preponderance of the evidence that Respondent’s failure to provide Complainant with an NTTC is a violation of Board statues and rules.
- The Administrative Prosecutor proved by a preponderance of the evidence that Respondent’s conduct constitutes a violation of the Appraisal Management Company Act.
Based on the Findings of Fact and Conclusions of Law, the Board votes in the affirmative and renders this Decision and Order.
IT IS ORDERED that Respondent shall hereafter comply with all relevant NTTC statues and Rules. For said violations, Respondent shall be assessed the following penalties:
- Fine in the amount of $10,000 (ten thousand dollars); and
- Reimbursement of New Mexico Gross Receipts Taxes to the Complainant for appraisal transactions conducted during the applicable period.
Section 47-14-18(F) of the New Mexico AMC Registration Act requires AMC’s to provide Type 5 NTTC’s to New Mexico licensed appraisers who perform appraisal services for AMC’s who will subsequently resell the appraiser services to lenders.
In order to execute NTTC’s to appraisers an AMC’s must register with the New Mexico Taxation and Revenue Department and obtain a Combined Reporting System (CRS) identification number for tax reporting purposes. Registration may be done on-line at the Taxation and Revenue Department website at http://tap.state.nm.us/NM_xwTapCrs.aspx.
The AMC’s must meet the statutory requirements set out in Section 7-9-48, NMSA 1978. Receipts from selling a service for resale may be deducted from gross receipts or from governmental gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate to the seller. The buyer delivering the nontaxable transaction certificate must resell the service in the ordinary course of business and the resale must be subject to the gross receipts tax or governmental gross receipts tax.
If you have questions regarding New Mexico gross receipts tax, or if you need further information about applying for a CRS identification number, please contact the Taxation and Revenue Department directly, at 505-827-0951 or at http://www.tax.newmexico.gov/SiteCollectionDocuments/2011crs-01kit-06.pdf.