New Mexico levies a statewide gross receipts tax on the sale of tangible personal property, licenses, fees, franchises, and on the furnishing of certain services in New Mexico. The tax rate varies across the state from 5.125% to 8.6875% depending on the location where the sale takes place.
In addition to the gross receipts tax, some cities and counties in New Mexico have enacted local option gross receipts taxes. Combined gross receipts tax rates in New Mexico range from 5.125% to 9.25% depending on the location.
Some transactions are exempt from the gross receipts tax, while others qualify for deductions that can be subtracted from the gross receipts. So the effective tax rate may be lower than the statutory rate in your area.
This comprehensive guide provides an overview of New Mexico sales tax, including the statewide and local rates, exemptions, deductions, how to collect and file sales tax, and more.
New Mexico Sales Tax Calculator
Because New Mexico has varying local sales tax rates, calculating the exact sales tax due requires identifying the combined state and local rate based on where the sale takes place.
Tax rates range between 5.125% and 9.25% across the state.
Use this sales tax calculator to determine how much sales tax to collect:
New Mexico Sales Tax Calculator
New Mexico Sales Tax Calculator
Keying in the proper combined rate ensures you calculate New Mexico sales tax correctly.
You can also save frequently used locations in your New Mexico sales tax calculator for quick access. This lets you easily calculate tax in those areas.
New Mexico State Sales Tax Rate
The statewide gross receipts tax rate in New Mexico is 5.125%. This tax applies to:
- Tangible personal property
- Licenses and fees
- Some services
On top of the 5.125% state tax, cities and counties in New Mexico can impose local option gross receipts taxes at rates ranging from 0.125% to 4.125%.
So the minimum combined sales tax rate in New Mexico is 5.125% (in areas with no local taxes) and the maximum is 9.25% (in the City of Santa Fe).
Here are some key things to know about New Mexico’s statewide sales tax rate:
- Applies to retail sales of tangible personal property and certain services
- 5.125% tax rate statewide
- Additional local gross receipts taxes up to 4.125% bring total rates between 5.125% and 9.25%
- Gross receipts tax, not sales tax
- Several exemptions and deductions can apply to reduce effective tax rate
Next, we’ll take a closer look at how New Mexico local sales tax rates impact the total tax due.
Local Sales Tax Rates in New Mexico
In addition to the 5.125% statewide rate, many cities and counties in New Mexico have enacted local gross receipts taxes. These local rates can be as high as 4.125%.
When combined with the statewide rate, total sales tax rates in New Mexico range from 5.125% to 9.25%:
- Minimum combined rate: 5.125% (areas with no local taxes)
- Maximum combined rate: 9.25% (Santa Fe)
Some of the highest combined city and county tax rates in New Mexico include:
- Santa Fe: 8.6875%
- Albuquerque: 7.875%
- Clovis: 7.8125%
- Roswell: 7.8125%
- Hobbs: 7.5%
Local gross receipts tax rates can change frequently in New Mexico. It’s important to verify the combined rate in effect at each taxing location where you make sales.
The New Mexico Taxation and Revenue Department provides a tax rate lookup tool on their website to find combined rates. You can look up locations by address, ZIP code or municipality.
Checking local rates on each transaction protects sellers from collecting an incorrect amount of tax. Rates are subject to change with little notice, so this lookup tool is the best way to stay up to date.
Next we’ll go over some common sales tax exemptions in New Mexico.
New Mexico Sales Tax Exemptions
New Mexico provides sales tax exemptions for some types of businesses and products. When an exemption applies, the sale is completely exempt from the gross receipts tax.
Some common New Mexico sales tax exemptions include:
Food and food ingredients: Food products for home consumption are exempt from the gross receipts tax in New Mexico. The exemption includes food sold in grocery stores, convenience stores, restaurants, and other establishments.
Prescription drugs: Sales of prescription medicines and insulin are exempt from sales tax in NM.
Gasoline: Sales of gasoline and diesel fuel that are subject to NM excise taxes are exempt from the gross receipts tax.
Textbooks: Sales of textbooks and other instructional materials are exempt if they are required for a course at a New Mexico private school, college, or university.
Aircraft Sales: Sales of commercial and military aircraft are exempt.
Agricultural Sales: Sales of agricultural implements, farm tractors, fertilizers, and other property for use in the production of agricultural products are exempt.
Industrial Machinery: Sales of machinery, equipment and tools used directly in manufacturing are exempt.
Livestock Sales: Sales of livestock and feeds for livestock are exempt.
Research and Development: Property and services for R&D for space and nuclear projects are exempt.
Sellers should maintain proper documentation to prove a transaction qualifies for a sales tax exemption. And some exemptions require the purchaser to provide an exemption certificate.
Claiming Tax Exemptions in New Mexico
To claim a sales tax exemption in New Mexico, sellers generally need to obtain documentation:
- NTTC Form: New Mexico Nontaxable Transaction Certificates are commonly used to claim exemptions. Buyers complete this certificate and provide it at the time of purchase.
- Other Exemption Certificates: For certain exemptions, specific certificates are required (such as the Agricultural Exemption Certificate).
- Resale Certificates: Buyers use these certificates when they plan to resell the items they are purchasing.
Sellers need to retain exemption certificates and other documentation for at least four years from the transaction date. This documents why tax was not collected if the transaction is ever audited.
Some buyers may try to claim exemptions improperly. Sellers should verify that the buyer’s business and the products being purchased legitimately qualify for the exemption claimed.
It’s also important for sellers to stay up to date on New Mexico exemption laws and requirements, as they do periodically change.
New Mexico Sales Tax Deductions
In addition to exemptions, New Mexico also provides tax deductions that can reduce the gross receipts tax due.
Common deductions include:
- Sale for resale: Businesses can deduct sales of tangible goods they will resell to customers. Documentation is required.
- Business-to-business services: Services performed for an exempt business may be deducted. Some examples include maintenance, construction, and repair services for manufacturers.
- Trade-in allowance: The value of a trade-in can be deducted if it meets certain requirements. The trade-in must be of a like-kind product and the value must be separately stated on the invoice and deducted from the purchase price.
- Cash discounts: Cash discounts and coupons that reduce the sales price can be deducted.
- Bad debts: If a sale is never paid for and written off, the tax on the sale can be deducted. Certain collection efforts must be made.
- Refunds & returns: Refunds for returned merchandise can be deducted if the tax was paid on the original purchase.
Proper documentation must be maintained to support deduction claims. Record requirements are similar to exemptions.
How to Collect New Mexico Sales Tax
Sellers are responsible for correctly calculating and collecting New Mexico gross receipts tax at the point of sale. Here are some tips for proper collection procedures:
- Use the NM Taxation and Revenue lookup tool to identify the correct combined tax rate based on the delivery location. Rates vary by city/county and change periodically.
- Calculate tax based on the total sales price, including shipping, handling, and any other charges to the customer.
- Taxable and nontaxable items invoiced together still need to be separated to apply rates accurately.
- Collect tax at the time of sale, either at the cash register for in-person sales or during checkout for online/catalog sales.
- Issue receipts showing tax collected as a separate line item.
- When claiming exemptions or deductions, get proper certificates and other documentation from buyers.
- Remit taxes using NM MTD Form and file returns on time to avoid penalties and interest.
- Keep detailed sales and tax records for at least 4 years.
How to Remit and Report NM Sales Tax
New Mexico sales tax returns and payments are due monthly or quarterly depending on sales volume.
- Monthly returns and tax payments are due by the 25th of the following month for businesses with annual gross sales of over $50,000.
- Quarterly returns and payments are due by the 25th of the month after the end of the quarter for sellers with $50,000 or less in annual gross receipts.
The NM Taxation and Revenue Department provides sales tax filing options:
- Online through the Taxpayer Access Point (TAP). TAP allows filing and payment of returns and also provides account management capabilities.
- Electronic data file uploads for high volume filers.
- Paper returns can be mailed in using Form CRS-1 along with payment.
In addition to regular monthly/quarterly reporting, NM requires a Combined Reporting System (CRS) return to report business location sales totals.
When filing NM sales tax returns, common required information includes:
- Gross receipts totals by business location
- Deductions and exemptions claimed
- Compute tax due by location
- Interest and penalties (if applicable)
- Total tax due amount for payment
How to Register for a New Mexico Seller’s Permit
If you are making taxable sales in New Mexico, you need to register for a seller’s permit with the New Mexico Taxation and Revenue Department. Some key steps include:
Determine if You Need a NM Seller’s Permit
You must register for a New Mexico seller’s permit if:
- You are based in New Mexico and making taxable sales
- You have an inventory location or warehouse in NM
- You deliver products into New Mexico (e.g. online/mail order sales)
- Your total annual gross sales in NM exceed $60,000
Sellers who do not meet the $60,000 sales threshold still need to register if they have a physical business location in the state.
Apply for Your New Mexico Seller’s Permit
You can apply for a NM seller’s permit online through the Taxation and Revenue Department website.
Information needed when applying includes:
- Business name and ownership information
- Federal Employer ID Number (EIN)
- Social Security Number for sole proprietors
- Physical and mailing addresses
- Description of business activities
- Contact information
- Additional local permits/licenses if required
Once approved, you will receive a New Mexico CRS business identification number to use for reporting and remitting sales tax.
Manage Your NM Seller’s Permit Account
Important account management activities for New Mexico seller’s permit holders include:
- Update account changes: Notify the department if business details like address, ownership, or operations change.
- File sales tax returns: Regularly report gross receipts and remit sales taxes due. Returns are monthly or quarterly.
- Maintain tax records: Keep detailed records of sales, exemptions, deductions, and taxes collected for at least 4 years.
- Cancel account: If your business stops operating in New Mexico, cancel your seller’s permit by submitting a Form ACD-31015.
Properly obtaining a seller’s permit, collecting tax on sales, filing timely returns, and keeping accurate records will help ensure compliance with New Mexico sales tax laws.
New Mexico Sales Tax Filing Deadlines and Payments
New Mexico sales tax returns and payments are due monthly or quarterly depending on sales volume. Here are the filing due date schedules:
Monthly NM Sales Tax Filing
If your total taxable gross receipts average over $50,000 per month, you must file New Mexico sales tax returns on a monthly basis.
Important monthly filing deadlines include:
- Return due date: Returns must be filed by the 25th day of the month following the period covered. For example, the January return is due on February 25th.
- Payment due date: Full payment for taxes reported on the monthly return is also due on the 25th.
- Reporting periods: Monthly returns cover tax periods ending on the last day of each month. The January return reports sales occurring in the month of January.
Monthly filers complete a CRS-1 Form and an application form for the business location(s) included in the return. Tax payments must accompany the return filing.
Quarterly NM Sales Tax Filing
If your total taxable gross receipts average $50,000 or less per month, you can file New Mexico sales tax returns quarterly.
Key quarterly sales tax filing deadlines:
- Return due date: The quarterly return must be filed by the 25th of the month following the end of the calendar quarter covered in the return. For example, the Q1 return is due on April 25th.
- Payment due date: Full payment is also due on the 25th after the end of the quarter.
- Reporting periods: Quarters end on March 31, June 30, September 30, and December 31. A quarterly return covers a 3 month period.
Quarterly returns require the CRS-1 Form listing gross receipts and tax due for each business location. Include payments with mailed returns.
Request an Extension
If you need more time to file your New Mexico sales tax return, you can submit an extension request:
- Monthly filers can get up to a 5-day extension
- Quarterly filers can get a 10-day extension
File Form RPD-41096 before the due date and pay at least 90% of the tax due to get approved. An extension gives more time to file, but the tax payment is still due on the original deadline.
Penalty and interest charges apply if you miss NM sales tax filing and payment deadlines. Getting an approved extension prevents these late fees.
Collecting New Mexico Sales Tax from Remote Sellers
In 2019, New Mexico implemented sales tax requirements for remote sellers that take effect based on sales thresholds:
$100,000 Sales Threshold
Sellers (remote or based outside NM) that make over $100,000 per year in gross online sales into New Mexico are required to:
- Register for a tax ID number: Get a NM CRS business identification number.
- Collect and remit tax: Charge, collect, and remit NM gross receipts tax and any applicable local taxes on sales into the state.
This applies only to taxable sales delivered into New Mexico exceeding the $100,000 gross receipts threshold.
200 Separate Sales Threshold
Out-of-state sellers that make over 200 separate retail transactions per year delivered into New Mexico must also:
- Register: Obtain a New Mexico seller’s permit.
- Collect tax: Charge NM gross receipts tax on taxable sales delivered into the state.
Once either threshold is met in the current or prior calendar year, the seller must begin collecting New Mexico sales tax.
Exemptions
Some exceptions that allow continued tax exemption for remote sellers:
- Sellers only making exempt sales, like groceries or prescription drugs, remain exempt
- Marketplace providerscollect taxes on behalf of their marketplace sellers on covered sales into New Mexico
Otherwise, out-of-state sellers exceeding either threshold must register and collect New Mexico sales taxes.
