In New Mexico, the gross receipts tax (GRT) is imposed on businesses or people who sell goods or services, lease property, license property, or license a franchise. GRT is assessed on the seller, not the buyer, although the tax is often passed on to buyers within the total purchase price.
Registration and Rates
Most businesses must register with the Taxation and Revenue Department (TRD) before collecting GRT. Registration can be completed online or by mail. Exemptions from GRT include nonprofits, governmental entities, isolated sales, wages, dividends, and insurance receipts.
- Online or mail registration
- Exemptions: nonprofits, governmental entities, etc.
Rates vary by location, with total rates ranging from 5% to 9.3125%. To register, one must apply online for a tax identification number and use different forms for employees and independent contractors.
Tax Exemptions and Holidays
What is excluded from gross receipts?
Certain types of income are exempt from GRT in New Mexico, including receipts from non-profits and government entities, as well as isolated sales and specific types of revenue such as wages and insurance receipts.
What items are tax-exempt in New Mexico?
During annual sales tax holidays in New Mexico, the following items can be purchased tax-free:
- $30 worth of school supplies
- Clothing and shoes: $100 per item
- Computer equipment: $500
- Computers: $1,000
Additionally, some items are perpetually exempt from tax, like most groceries, while others such as alcohol and prepared foods are subject to higher tax rates.
Legislative Role and Resources
Lawmakers dictate the extent of taxation, what is subject to tax, and the allocation of the collected funds. The New Mexico state GRT rate is set at 5.125%. Businesses may have to file at different frequencies based on their type and structure. To aid businesses, the TRD provides resources to better understand and comply with GRT laws.