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New Mexico Sales Tax Guide for Businesses

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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.

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.

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 and read more about economic nexus in every state here.

Tax rules on shipping and/or handling

If the cost of shipping is passed on to the customer then that cost is considered to be taxable.

When are New Mexico Sales Tax 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.

How often you are required to file sales tax in New Mexico follows this general rule:

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.

2021 New Mexico Monthly Sales Tax Filing Due Dates

2021 New Mexico Quarterly Sales Tax Filing Due Dates

2021 New Mexico Semiannual Sales Tax Filing Due Dates

Click here for more info on New Mexico sales tax filing due dates.

Penalties & Interest

If you file your sales tax return after the due date, you need to add penalty and interest to the amount of tax you owe the state. If you are late filing and don’t owe the state anything, you still owe a $5 penalty. According to the state, the “Penalty is 2% per month or partial month the payment is late up to a maximum of 20% of tax due or a minimum of $5.00.” Interest is calculated at a rate of 3% on a daily basis.

How to File & Pay

Online:Click the E-File link on this page

Record Keeping Requirements

Here’s what the state says about record keeping, “New Mexico statute permits the Department to assess back 10 years, depending on the situation. The normal assessment period is three years back from the end of the year the tax was due. If you have underreported any one tax on the CRS-1 Form by more than 25%, the Department may assess back six years. If you have non-filed reports, the Department may assess back seven years. If there is evidence of tax fraud, the Department may assess back 10 years. It is in your best interest to maintain these files for 10 years in the event the Department requires information from you.”

Business Registration Requirements

Persons engaging in business in New Mexico must register with the New Mexico Taxation and Revenue Department. With few exceptions a business must hold a CRS identification number.

“Combined Reporting System,” (“CRS”) is the Department’s method for reporting the state’s major business taxes: gross receipts tax, all local option gross receipts taxes, compensating tax, and withholding tax. The CRS identification number is your state tax identification number.

New Mexico Sales Tax Holidays

Here’s a list of current New Mexico sales tax holidays:

Click here for more information about this year’s sales tax holidays in the U.S., including what to do about sales tax holidays as an online seller.

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