As an e-commerce seller, you will need to collect gross receipts tax in New Mexico if you have:
(1) $100,000 in taxable gross receipts in New Mexico in the previous calendar year (economic nexus), or
(2) Physical presence in New Mexico (physical nexus).
New Mexico’s Gross Receipts Tax is a broad-based tax that imposes a tax on all persons who sell property or perform services in New Mexico. As such, it is broader than the typical sales tax. It is imposed directly on the retailer, but may be passed through to the seller. As such, for most retailers, it operates in the same manner as a traditional sales tax.
Below, we will highlight some of the basic provisions of New Mexico gross receipts tax law.
What is the tax rate range for New Mexico?
State: New Mexico’s general gross receipts tax rate is 5%.
Local: Local jurisdictions can range from just under 1.0% to just under 4.0%.
New Mexico Taxation & Revenue - Sales Tax Rate
Do you have physical or economic nexus in New Mexico?
Physical nexus. Certain business activities create physical nexus in New Mexico. If you have physical nexus, you are required to collect and remit sales tax on all sales that are shipped to the state. Examples of business activities that can create physical nexus in New Mexico include:
- having or using an office, distribution house, sales house, warehouse, service enterprise; or other place of business in New Mexico,
- maintaining a stock of goods in New Mexico,
- regularly engaging in the delivery of property into New Mexico other than by common carrier or United States mail
- leasing or servicing property located in New Mexico.
Gross Receipts Tax Nexus – Determining Nexus
Economic nexus. New Mexico recognizes economic nexus for any vendor with $100,000 or more in taxable gross receipts into the state in the previous calendar year.
- Sales made through a marketplace are not included.
- Once you exceed the threshold, you need to begin to collect on January 1 of the following year.
Gross Receipts Tax Economic Nexus – Determining Nexus and FYI-105 Gross Receipts & Compensating Taxes - An Overview (newmexico.gov)
What are examples of sales of taxable items?
- Tangible personal property
- Performing services
- Leases of tangible personal property
- Digital goods
- Software as a Service (SaaS)
What are examples of sales of nontaxable/exempt items?
- Qualifying food sold by retail food stores
- Prescription drugs
Are there any sales tax holidays?
New Mexico recognizes an annual back to school tax free holiday in August. For this weekend, the state suspends collection of gross receipts tax on sales of qualifying items. New Mexico Back to School Tax Free Holiday Page
New Mexico also recognizes a “Small Business Saturday” sales tax holiday on the Saturday after Thanksgiving. That holiday, however, applies only to non-franchise businesses that are both headquartered in New Mexico and have employed no more than ten employees at any one time during the previous fiscal year. Small Business Saturday Tax Holiday
Is New Mexico a member of the SST (Streamlined Sales Tax)?
Currently, New Mexico is not a full or associate member of the Streamlined Sales Tax (SST) project.
How to get a sales tax permit / links to register in this state?
You can register online at: New Mexico Taxation & Revenue Department.
For more information on New Mexico rates, see: New Mexico Gross Receipt Tax Rates Page.