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Learn the fundamentals of sales tax
Do you need to collect sales tax in New Mexico?
You’ll need to collect sales tax in New Mexico if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in New Mexico?
New Mexico does not have a sales tax. It has a gross receipts tax instead. This tax is imposed on persons engaged in business in New Mexico.
In almost every case, the person engaged in business passes the tax to the consumer either separately stated or as part of the selling price. Only in its effect on the buyer does the gross receipts tax resemble a sales tax.
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 the state considers these sellers now obligated to collect sales tax from buyers in that state.
You can read New Mexico’s economic nexus legislation here.
Is what you’re selling taxable?
Generally speaking, 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. (Source)
How to get a sales tax permit in New Mexico
You can register online or mail in form ACD-31015 (opens in PDF). 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.
You need this 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 (see instructions or check out our New Mexico Sales Tax Guide for Businesses for more about filing frequency))
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 now is 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 it comes time to file your GRT returns. More information here.
When are Returns Due?
When you file and pay New Mexico sales tax depends on two things: 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 you must do three things:
- 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.
All you do is 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. All you have to do is login.
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 on this page
- 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.