New Mexico has a gross receipts tax rather than a traditional sales tax. All businesses operating in New Mexico that sell goods or services are required to register for a tax ID number and collect and remit gross receipts tax. This guide provides an overview of New Mexico's gross receipts tax system, rates, recent changes, and compliance requirements.
Sales tax at a glance
New Mexico gross receipts tax rates & calculations in 2023
The New Mexico gross receipts tax rate in 2023 is 5.125%. This comprises a base rate of 5.125% plus a mandatory local rate up to 4.125%. Depending on the local gross receipts tax jurisdiction, the total tax rate can be as high as 9.25%.
List of local gross receipts tax rates in New Mexico
You can look up the full table of gross receipts tax rates in each city and county in New Mexico.
Recent tax rate changes in New Mexico
There have been no recent changes to New Mexico's statewide or local gross receipts tax rates. The rates have remained steady in recent years.
FAQs
How do you calculate New Mexico gross receipts tax?
To calculate New Mexico gross receipts tax, you can use the following formula:
Gross receipts tax = (base rate + local rate) * taxable gross receipts
For instance, if the base rate is 5.125%, the local rate is 1.5%, and the taxable gross receipts are $100, then the gross receipts tax would be $6.625.
What are the penalties for not paying New Mexico gross receipts tax?
If you fail to pay New Mexico gross receipts tax on time, you may face penalties of 2% per month up to 20% of the tax owed. Interest will also accrue at an annual rate of 15% on any unpaid tax. Criminal charges may apply for tax evasion over $500.
Is new mexico a streamlined sales tax state?
No, New Mexico is not currently a member of the Streamlined Sales and Use Tax Agreement (SSUTA).
Sales tax nexus table in New Mexico
FAQs
Do I need a New Mexico seller's permit if I’m only a wholesaler?
If you make wholesale sales within New Mexico, you likely need a New Mexico Business Tax Identification Number (BTID) even if you do not make retail sales. Wholesale sales in the state are generally subject to gross receipts tax. Check with the New Mexico Taxation and Revenue Department to confirm your obligations.
Do I need a New Mexico seller's permit if I only sell temporarily in the state?
If you make sales within New Mexico, even temporarily, you likely need a New Mexico seller's permit. There is no temporary seller's permit. All sellers must register for a standard seller's permit.
Exemptions from sales tax in New Mexico
Some goods are exempt from New Mexico's gross receipts tax, including
- Prescription drugs
- Groceries
- Gasoline
Services are broadly taxable in New Mexico with a few exemptions.
FAQs
Are groceries taxable in New Mexico?
No, most grocery food items are exempt from New Mexico's gross receipts tax. However, prepared foods, dietary supplements, and soft drinks are taxable.
Is clothing taxable in New Mexico?
Yes, clothing is generally subject to New Mexico gross receipts tax unless it qualifies as exempt medical equipment.
Are digital products taxable in New Mexico?
Digital products like music, ebooks, and software downloads are subject to New Mexico gross receipts tax. SaaS is also generally taxable.
Is software-as-a-service (saas) taxable in New Mexico?
Yes, software-as-a-service (SaaS) is considered taxable in New Mexico.
Are services taxable in New Mexico?
Yes, New Mexico taxes services very broadly. Most services performed in New Mexico are subject to the state's gross receipts tax.
Excise taxes in New Mexico (alcohol, tobacco, gasoline, fuel, marijuana)
New Mexico levies selective excise taxes on alcohol, tobacco, gasoline, special fuels, and marijuana, in addition to the general gross receipts tax.
Food and beverage tax in New Mexico
New Mexico does not have a general sales tax on food and beverages. However, there are excise taxes on some specific items:
- Alcoholic beverages: 6-8% excise tax
- Cigarettes: $1.66 per pack tax
- E-cigarettes: 12.5% wholesale tax
Remote sellers in New Mexico
Out-of-state sellers with no physical presence in New Mexico may still be required to register for a seller's permit and collect gross receipts tax once they meet the $100,000 economic nexus threshold for sales into the state.
Prepaid sales tax rates for fuel products in New Mexico
New Mexico has prepaid sales tax rates that apply to various fuel products, including:
These are paid at the wholesale level but passed along to consumers in the retail price.
Discretionary taxes in New Mexico
In addition to the statewide 5.125% gross receipts tax rate, New Mexico municipalities and counties can impose local gross receipts taxes up to 4.125% based on the location of the transaction.
Filing and paying sales taxes in New Mexico
To file and pay New Mexico gross receipts tax, you must submit your sales data and remit any tax due by the applicable deadline each period. The filing process is completed online through Taxation & Revenue Department website.
You can file yourself or use a third-party provider like TaxJar to automate your tax reporting and payments.
Sales tax return filing schedule and due dates in New Mexico
The New Mexico TRD assigns a filing frequency to businesses based on their anticipated taxable gross receipts: monthly, quarterly or semi-annually. The following due dates apply to New Mexico gross receipts tax returns:
Monthly:
Quarterly:
Semi-annual:
Filers remitting semi-annually must file by July 25 (for January 1 - June 30) and January 25 (for July 1 - December 31).
When are returns due in New Mexico?
Gross receipts tax returns in New Mexico are due by the 25th day of the month following the end of the filing period. For example, if filing monthly for January, the due date would be February 25.
FAQs
What are the new mexico gross receipts tax due dates?
The due dates vary based on your assigned filing frequency, but returns are always due by the 25th of the month following the end of the period. See the tables above for specifics.
I didn’t collect any new mexico gross receipts tax during this period. do i still need to file a return?
Yes, once registered, you must file a gross receipts tax return each period, even if you collected $0 in tax. Failure to file a timely return can result in penalties.
Can I get an extension on filing my new mexico gross receipts tax return?
You can submit a written request to receive an extension to file your return. However, you still must pay any tax owed by the original due date to avoid penalties and interest.
Can I amend a new mexico gross receipts tax return?
Yes, you can file an amended return in New Mexico to correct errors or omissions from a past return. You must pay any additional tax owed, plus interest and potential penalties.
What is the penalty for filing and paying New Mexico gross receipts tax late?
New Mexico charges a penalty of 2% per month up to 20% on late-filed returns. Interest accrues at an annual rate of 15% on any unpaid tax. Total penalties plus interest cannot exceed 25% of taxes due.
Audit & appeals process in New Mexico
If a business is selected for a gross receipts tax audit by the New Mexico Taxation & Revenue Department (TRD), a defined process will follow. Understanding what to expect can help businesses properly prepare.
New Mexico gross receipts tax audit selection
There are a few reasons the TRD may select a business for audit, including:
- Random selection
- Referral from 3rd party like a vendor or customer
- Your business activities seem inconsistent with reported tax amounts
- Previous audit identified issues or trends requiring follow-up
Generally, larger companies with more complex operations are audited more frequently than small businesses. However, companies of any size can be selected at the TRD's discretion.
The New Mexico gross receipts tax audit process step-by-step
- Audit Notice Issued - The TRD will first issue a formal notice by mail that you have been selected for audit. This will provide information on the audit scope, timing, and records needed.
- Information Request - Early in the process, the auditor will submit detailed lists of the financial statements, tax records, exemption certificates, and other documentation required. You will have 30 days to gather and submit this.
- Audit Conducted - The in-person or virtual audit will involve the TRD auditor thoroughly reviewing your submitted records, asking clarifying questions, and determining compliance. This may take a few weeks.
- Audit Findings Issued - Once the audit concludes, the TRD will provide preliminary written findings outlining any deficiencies found and details on taxes, penalties, and interest owed if discrepancies were identified.
- Protest Audit Findings - If you disagree with the audit results, you have 30 days from receiving the proposed assessment to provide a written protest explaining what you contest along with all supporting documentation. This commences the appeals process.
After the audit – filing an appeal
If you submit a protest but receive an unfavorable appeals determination from the TRD upholding the audit findings, you can formally appeal by filing a claim for refund with the New Mexico Tax Administration Hearings Office. This will initiate a hearing with a tax tribunal.
The appeals process can be complex, so working with a sales tax professional can be beneficial throughout an audit and appeal to achieve the best resolution for your business. Keeping detailed financial records is also key to supporting your compliance efforts.
How to register for sales tax in New Mexico
You can register online through the New Mexico Tax & Revenue website. You'll need to provide your business identification details, ownership information, New Mexico activities start date, and accounting method, etc.
Once registered, you can log into your account to manage your tax obligations. There is no fee to obtain a seller’s permit.
Registration requirements for online sellers in New Mexico
Online sellers with no physical presence in New Mexico may still need to register to collect gross receipts tax once they exceed $100,000 in annual gross revenue from sales into the state. This establishes economic nexus.
You can also register voluntarily before meeting the threshold.
More information & contacts
For questions on gross receipts tax compliance in New Mexico, contact:
- New Mexico Taxation & Revenue Department
- Phone: 505-827-0700
- Website: http://www.tax.newmexico.gov/
There you have it—a comprehensive guide on New Mexico's sales tax regime. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.
Sales tax at a glance
New Mexico gross receipts tax rates & calculations in 2023
The New Mexico gross receipts tax rate in 2023 is 5.125%. This comprises a base rate of 5.125% plus a mandatory local rate up to 4.125%. Depending on the local gross receipts tax jurisdiction, the total tax rate can be as high as 9.25%.
List of local gross receipts tax rates in New Mexico
You can look up the full table of gross receipts tax rates in each city and county in New Mexico.
Recent tax rate changes in New Mexico
There have been no recent changes to New Mexico's statewide or local gross receipts tax rates. The rates have remained steady in recent years.
FAQs
How do you calculate New Mexico gross receipts tax?
To calculate New Mexico gross receipts tax, you can use the following formula:
Gross receipts tax = (base rate + local rate) * taxable gross receipts
For instance, if the base rate is 5.125%, the local rate is 1.5%, and the taxable gross receipts are $100, then the gross receipts tax would be $6.625.
What are the penalties for not paying New Mexico gross receipts tax?
If you fail to pay New Mexico gross receipts tax on time, you may face penalties of 2% per month up to 20% of the tax owed. Interest will also accrue at an annual rate of 15% on any unpaid tax. Criminal charges may apply for tax evasion over $500.
Is new mexico a streamlined sales tax state?
No, New Mexico is not currently a member of the Streamlined Sales and Use Tax Agreement (SSUTA).
Sales tax nexus table in New Mexico
FAQs
Do I need a New Mexico seller's permit if I’m only a wholesaler?
If you make wholesale sales within New Mexico, you likely need a New Mexico Business Tax Identification Number (BTID) even if you do not make retail sales. Wholesale sales in the state are generally subject to gross receipts tax. Check with the New Mexico Taxation and Revenue Department to confirm your obligations.
Do I need a New Mexico seller's permit if I only sell temporarily in the state?
If you make sales within New Mexico, even temporarily, you likely need a New Mexico seller's permit. There is no temporary seller's permit. All sellers must register for a standard seller's permit.
Exemptions from sales tax in New Mexico
Some goods are exempt from New Mexico's gross receipts tax, including
- Prescription drugs
- Groceries
- Gasoline
Services are broadly taxable in New Mexico with a few exemptions.
FAQs
Are groceries taxable in New Mexico?
No, most grocery food items are exempt from New Mexico's gross receipts tax. However, prepared foods, dietary supplements, and soft drinks are taxable.
Is clothing taxable in New Mexico?
Yes, clothing is generally subject to New Mexico gross receipts tax unless it qualifies as exempt medical equipment.
Are digital products taxable in New Mexico?
Digital products like music, ebooks, and software downloads are subject to New Mexico gross receipts tax. SaaS is also generally taxable.
Is software-as-a-service (saas) taxable in New Mexico?
Yes, software-as-a-service (SaaS) is considered taxable in New Mexico.
Are services taxable in New Mexico?
Yes, New Mexico taxes services very broadly. Most services performed in New Mexico are subject to the state's gross receipts tax.
Excise taxes in New Mexico (alcohol, tobacco, gasoline, fuel, marijuana)
New Mexico levies selective excise taxes on alcohol, tobacco, gasoline, special fuels, and marijuana, in addition to the general gross receipts tax.
Food and beverage tax in New Mexico
New Mexico does not have a general sales tax on food and beverages. However, there are excise taxes on some specific items:
- Alcoholic beverages: 6-8% excise tax
- Cigarettes: $1.66 per pack tax
- E-cigarettes: 12.5% wholesale tax
Remote sellers in New Mexico
Out-of-state sellers with no physical presence in New Mexico may still be required to register for a seller's permit and collect gross receipts tax once they meet the $100,000 economic nexus threshold for sales into the state.
Prepaid sales tax rates for fuel products in New Mexico
New Mexico has prepaid sales tax rates that apply to various fuel products, including:
These are paid at the wholesale level but passed along to consumers in the retail price.
Discretionary taxes in New Mexico
In addition to the statewide 5.125% gross receipts tax rate, New Mexico municipalities and counties can impose local gross receipts taxes up to 4.125% based on the location of the transaction.
Filing and paying sales taxes in New Mexico
To file and pay New Mexico gross receipts tax, you must submit your sales data and remit any tax due by the applicable deadline each period. The filing process is completed online through Taxation & Revenue Department website.
You can file yourself or use a third-party provider like TaxJar to automate your tax reporting and payments.
Sales tax return filing schedule and due dates in New Mexico
The New Mexico TRD assigns a filing frequency to businesses based on their anticipated taxable gross receipts: monthly, quarterly or semi-annually. The following due dates apply to New Mexico gross receipts tax returns:
Monthly:
Quarterly:
Semi-annual:
Filers remitting semi-annually must file by July 25 (for January 1 - June 30) and January 25 (for July 1 - December 31).
When are returns due in New Mexico?
Gross receipts tax returns in New Mexico are due by the 25th day of the month following the end of the filing period. For example, if filing monthly for January, the due date would be February 25.
FAQs
What are the new mexico gross receipts tax due dates?
The due dates vary based on your assigned filing frequency, but returns are always due by the 25th of the month following the end of the period. See the tables above for specifics.
I didn’t collect any new mexico gross receipts tax during this period. do i still need to file a return?
Yes, once registered, you must file a gross receipts tax return each period, even if you collected $0 in tax. Failure to file a timely return can result in penalties.
Can I get an extension on filing my new mexico gross receipts tax return?
You can submit a written request to receive an extension to file your return. However, you still must pay any tax owed by the original due date to avoid penalties and interest.
Can I amend a new mexico gross receipts tax return?
Yes, you can file an amended return in New Mexico to correct errors or omissions from a past return. You must pay any additional tax owed, plus interest and potential penalties.
What is the penalty for filing and paying New Mexico gross receipts tax late?
New Mexico charges a penalty of 2% per month up to 20% on late-filed returns. Interest accrues at an annual rate of 15% on any unpaid tax. Total penalties plus interest cannot exceed 25% of taxes due.
Audit & appeals process in New Mexico
If a business is selected for a gross receipts tax audit by the New Mexico Taxation & Revenue Department (TRD), a defined process will follow. Understanding what to expect can help businesses properly prepare.
New Mexico gross receipts tax audit selection
There are a few reasons the TRD may select a business for audit, including:
- Random selection
- Referral from 3rd party like a vendor or customer
- Your business activities seem inconsistent with reported tax amounts
- Previous audit identified issues or trends requiring follow-up
Generally, larger companies with more complex operations are audited more frequently than small businesses. However, companies of any size can be selected at the TRD's discretion.
The New Mexico gross receipts tax audit process step-by-step
- Audit Notice Issued - The TRD will first issue a formal notice by mail that you have been selected for audit. This will provide information on the audit scope, timing, and records needed.
- Information Request - Early in the process, the auditor will submit detailed lists of the financial statements, tax records, exemption certificates, and other documentation required. You will have 30 days to gather and submit this.
- Audit Conducted - The in-person or virtual audit will involve the TRD auditor thoroughly reviewing your submitted records, asking clarifying questions, and determining compliance. This may take a few weeks.
- Audit Findings Issued - Once the audit concludes, the TRD will provide preliminary written findings outlining any deficiencies found and details on taxes, penalties, and interest owed if discrepancies were identified.
- Protest Audit Findings - If you disagree with the audit results, you have 30 days from receiving the proposed assessment to provide a written protest explaining what you contest along with all supporting documentation. This commences the appeals process.
After the audit – filing an appeal
If you submit a protest but receive an unfavorable appeals determination from the TRD upholding the audit findings, you can formally appeal by filing a claim for refund with the New Mexico Tax Administration Hearings Office. This will initiate a hearing with a tax tribunal.
The appeals process can be complex, so working with a sales tax professional can be beneficial throughout an audit and appeal to achieve the best resolution for your business. Keeping detailed financial records is also key to supporting your compliance efforts.
How to register for sales tax in New Mexico
You can register online through the New Mexico Tax & Revenue website. You'll need to provide your business identification details, ownership information, New Mexico activities start date, and accounting method, etc.
Once registered, you can log into your account to manage your tax obligations. There is no fee to obtain a seller’s permit.
Registration requirements for online sellers in New Mexico
Online sellers with no physical presence in New Mexico may still need to register to collect gross receipts tax once they exceed $100,000 in annual gross revenue from sales into the state. This establishes economic nexus.
You can also register voluntarily before meeting the threshold.
More information & contacts
For questions on gross receipts tax compliance in New Mexico, contact:
- New Mexico Taxation & Revenue Department
- Phone: 505-827-0700
- Website: http://www.tax.newmexico.gov/
There you have it—a comprehensive guide on New Mexico's sales tax regime. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.
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About the author
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Deb Mukherjee
Deb is the head of marketing at Numeral. He has worked with the likes of Shopify and Wonderment and has helped countless ecommerce stores scale through seamlessly. With a background in finance, he often finds himself advising stores on sales tax and good financial systems.
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