New Mexico Sales Tax Overview
New Mexico taxes business gross receipts instead of sales. The state has a destination-based sales tax policy, meaning long-distance sales within New Mexico are taxed according to the address of the buyer. Out-of-state sellers with over $100,000 in annual New Mexico sales must collect and remit sales tax since July 2019.
- The average combined state and local sales tax rate is 7.383 percent, ranking the 20th highest nationally.
- Local sales tax rates range from 0 percent to 9.062 percent.
- The state sales tax rate is 4.875 percent, with Santa Fe County having a total sales tax rate of 7.125 percent.
New Mexico Sales Tax Exemptions
New Mexico allows tax-free purchases during sales tax holidays for specific items, including:
- $30 worth of school supplies
- $100 in clothing and shoes per item
- $500 in computer equipment
- $1,000 worth of computers
Taxable Items in New Mexico
New Mexico’s gross receipts tax applies to sales and leases of goods and services instead of a sales tax. Companies operating in another state must pay sales tax there. The tax rates vary across the state, ranging from about 5% to over 9% when combined with local taxes. Certain items, such as groceries, are exempt from the tax, while others like alcohol and prepared foods are taxed at higher rates.