Navigating New Mexico’s sales tax guidelines
Do sales in New Mexico require your business to file a sales tax return and remit taxes to the state? Each state mandates different sales thresholds that define whether or not a business has economic nexus. Learn more about New Mexico’s guidelines for online sellers and businesses to understand if you have met the sales requirements for economic nexus. Use TaxJar’s New Mexico tax guide to simplify the filing process and ensure your business understands its tax responsibilities when selling in the state.
Do you need to collect sales tax in New Mexico?
Businesses need to collect sales tax in New Mexico if they have either physical or economic nexus. Physical nexus means that a business has a tangible presence or activity in the state, while economic nexus refers to businesses that have met a state’s economic threshold for total revenue or for the number of transactions.
Do you have physical nexus in New Mexico?
New Mexico does not have sales tax. Instead, the state has a gross receipts tax. This tax is imposed on persons engaged in business in New Mexico.
Most businesses or sellers in New Mexico pass this tax to the consumer as a separate charge or as part of the total sales price.
Do you have economic nexus in New Mexico?
Effective July 1, 2019, New Mexico considers retailers who have $100,000 or more in annual gross revenue from sales in New Mexico in the last calendar year to have economic nexus. This means these sellers are obligated to collect sales tax from buyers in that state.
Is what you’re selling taxable?
Sales and leases of goods and other property, both tangible and intangible, are taxable. Unlike many other states, sales and performances of most services are taxable in New Mexico. Most tangible goods are also taxable with the exception of grocery items.
Is SaaS taxable in New Mexico?
SaaS is taxable in New Mexico.
How to get a sales tax permit in New Mexico
You can register online or mail in form ACD-31015. Many local tax offices or town halls also allow taxpayers to apply for their permit. Check with your local government authorities if you prefer to register for a gross receipts tax permit in person.
Or visit our registration page to request for TaxJar to manage your New Mexico registration.
Businesses must provide the following information to register for a gross receipts tax permit in New Mexico:
- Personal identification info (SSN, address, etc.)
- Business identification info (EIN, address, etc.) – Business owners other than sole-proprietors/individuals with no employees must obtain a FEIN number from the IRS
- Business entity type
- Date started doing business in New Mexico
- Accounting method (cash/accrual)
- Primary business type
- Filing status (i.e. how often you will file, indicated by how much you expect to collect in gross receipts in New Mexico per year.
It’s free to apply for a gross receipts tax permit, but other New Mexico business registration fees may apply.
Collecting sales tax
As of 7/1/21, New Mexico is considered a destination-based sales tax state. The Gross Receipts tax rate are calculated based on where the goods or products of services are delivered. The New Mexico gross receipts tax rate is 5.125%.
Should you collect sales tax on shipping charges in New Mexico?
In New Mexico, shipping charges are almost always taxable. Unlike in many other states, you can choose to pass this tax onto your buyer, or remit it yourself out of your own pocket when your business needs to file GRT returns.
When are returns due?
When you file and pay New Mexico sales tax depends on your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in New Mexico?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In New Mexico, you will be required to file and remit sales tax either monthly, quarterly, or semiannually. New Mexico sales tax returns are generally always due the 25th day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing sales tax
When it comes time to file sales tax in New Mexico, follow these three steps:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to calculate how much sales tax you owe in New Mexico
Calculating how much sales tax you should remit to the state of New Mexico is easy with TaxJar’s New Mexico sales tax report.
Connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your New Mexico sales tax return will be waiting for you in TaxJar.
How to file and pay sales tax in New Mexico
You have two options for filing and paying your New Mexico sales tax:
- Online: Click the E-File link
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.
