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New Mexico Gross Receipts Tax Exemptions & Deductions

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New Mexico is one of the few states with a gross receipts tax. It is a tax imposed on the seller of products and services but, as with any tax law, there are a few exceptions.

Gross receipts DOES NOT include:

  1. Tax billed to the buyer
  2. Cash discounts
  3. Gross receipts or sales tax imposed by an Indian nation, tribe, or pueblo if the Indian nation, tribe, or pueblo has a similar exclusion for New Mexico gross receipts tax
  4. Any type of time-price differential, such as interest or a reduced sale price for pay
  5. Amounts received solely on behalf of another in a disclosed agency capacity
  6. Amounts received by a New Mexico florist from the sale of flowers, plants, etc., where the sale is the result of orders placed with an out-of-state florist for filling and delivery in New Mexico by a New Mexico florist

Gross receipts are taxable, exempt, or deductible. If your receipts do not fall under either exemption or deduction, then those receipts are taxable.

Gross Receipts Tax Exemptions

Exemptions from gross receipts are receipts that are not taxable and do not have to be reported. There are over 40 exemptions to New Mexico gross receipts tax, and they are for things like: 

  • Governmental Entities
  • Agricultural Sales
  • Fuel
  • Food Stamps
  • Nonprofit Organizations
  • Homeowners Associations
  • Social Organizations
  • Wages
  • Insurance
  • Telecommunication Services
  • Interest & Dividends
  • Sales to Indian Nations, Tribes, or Pueblos, or Members (if the transaction takes place on the tribe’s territory)
  • Oli, Natural Gas or Electric Utilities
  • And more

Deductions from Gross Receipts Tax

Like an exemption, a deduction is a sale that is not subject to the tax, but deductions must be reported to New Mexico’s Taxation & Revenue Deptpartment. There are nearly 100 authorized deductions, and they are for things like:

  • Agricultural Sales
  • Resales
  • Sales to Out-of-State Customers
  • Groceries
  • Construction Materials
  • Tangibles Sold to Government Agencies & Nonprofit Organizations
  • Prescription Drugs
  • Child Care Services
  • Commissions
  • Fuel
  • Feminine Hygiene Products
  • Internet
  • And more

Get Peace of Mind with Arsenault CPA Firm

If you find the New Mexico gross receipts tax confusing and stressful, you are not alone. Our experienced tax specialists are dedicated to helping businesses of all sizes navigate difficult and confusing sales tax issues. Let us give you peace of mind and confidence when it comes to New Mexico’s Gross Receipts Tax. Contact us today for a free consultation.

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New Mexico Gross Receipts Tax Exemptions & Deductions