Income/Franchise:
New Mexico Ruling Addresses Sourcing Sales of TPP Delivered to Third-Party Distribution Warehouses
Ruling No. 210-25-1, N.M. Tax’n and Rev. Dept. (2/13/25). In a ruling involving a distribution company filing as part of a New Mexico unitary combined corporate income tax return with various affiliates that manufacture, purchase, and import certain tangible personal property (i.e., the “products”), the New Mexico Taxation and Revenue Department (Department) held that, based on the provided facts, the delivery of the products by the company to third-party distributor warehouses within New Mexico are deemed to terminate in New Mexico and thus such sales are sourced to New Mexico – regardless of whether the third-party distributors subsequently move the products to locations outside New Mexico. Correspondingly, the Department held that the delivery of products by certain affiliates to third-party distributor warehouses located outside of New Mexico are deemed to terminate outside of New
Mexico and thus such sales are not sourced to New Mexico – regardless of whether the third-party distributors subsequently move the products to locations within New Mexico. Please contact us with any questions.
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