New Mexico Sales Tax

New Mexico is a destination-based sales tax state, meaning that the state's gross receipts (GRT) tax is based on where the buyer receives the goods or services.

New Mexico sales tax is 5.125%. This is a gross receipts tax levied on the seller rather than the buyer. In order to collect sales tax, businesses must register with the state’s Taxation and Revenue Department. The registration process requires business owners to provide a CRS (Computerized Reporting System) identification number. Remote sellers who lack a physical presence in the state and have total previous calendar year taxable gross receipts of at least $100,000 must also register for sales tax collection.

E-commerce sales tax regulations require online retailers to collect state and local sales taxes, including New Mexico sales tax, based on the shipping address. This combined rate can exceed 8.19%, making tracking and calculating sales tax rates for each jurisdiction important. In addition, compliance involves maintaining detailed invoices and regularly filing tax returns.

How to Pay New Mexico Sales Tax?

When it comes to paying sales tax in New Mexico, there are a few things you should keep in mind. First, you must know your combined state, county, and city sales tax rate. You can use an online calculator to find this information in seconds. Once you have this information, you can calculate how much sales tax you need to charge your customers.

The preferred New Mexico Sales Tax payment method is through the Taxpayer Access Point (TAP) on the department’s website. TAP allows for fast and easy electronic check payments, which are free. You can also use a credit card for an added convenience fee.

New Mexico Sales Tax Exemption
New Mexico Sales Tax 1

New Mexico Sales Tax Exemption

The GRT applies to all sales, leases, and rentals of tangible personal property, certain services, and licenses. However, military retirement pay and the provision of home telecommunications services are exempt from the GRT.

Over 40 categories of items are not subject to the GRT, and each category has its own rules regarding whether an item is taxable or exempt. The key factor in determining whether your business needs to collect and report the GRT is having a significant connection with New Mexico, which is known as nexus.

New Mexico Sales Tax Due Dates

Taxpayers are required to file and remit New Mexico Sales Tax on a regular basis, either monthly or quarterly. Each filing frequency has its own due dates, and the choice is based on the amount of sales revenue the business generates in New Mexico. Many companies outsource their tax filings and payments to a bookkeeper or sales tax automation service, making compliance easier and reducing the risk of costly errors.

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