There are fewer than 10 states with a statewide gross receipts tax and New Mexico is one of them. In New Mexico the gross receipts tax function a bit like a sales tax, except it’s paid by the seller not the buyer.

What is the New Mexico Gross Receipts Tax?

If you are engaged in business in the state of New Mexico, you are required to file a New Mexico tax return and pay gross receipts tax. Gross receipts are the total amounts your business receives from all sources during its annual accounting period, without subtracting any costs or expenses.

The gross receipt tax applies to the sales of products as well as many services. As of 2024, the state rate is 5.125%, however many cities and counties collect their own GRT to pay of municipal services so your actual rate will vary depending on where you are in New Mexico.

Who Pays the New Mexico Gross Receipts Tax?

While the cost is often passed along to the consumer, the tax is officially imposed on the business owner, seller or service provider, and they are the ones responsible for collecting and paying the tax each year. GRT applies to a business or person who:

• sells property in New Mexico
• perform services in New Mexico
• leases or licenses a property or a franchise in New Mexico
• sells certain services outside of New Mexico if the resulting product is initially used in New Mexico

While most services performed in New Mexico are subject to gross receipts tax, including professional services, there are a few that are exempt including:  

• Feeding, pasturing, penning or handling livestock
• Dues and registration fees of nonprofit social, fraternal, political, trade, labor or professional organizations and business leagues
• Insurance companies or any agent from premiums for surety bonds or insurance policies
• The sale or provision of interstate telecommunications services subject to the Interstate Telecommunications Gross Receipts Tax Act
• Gas or electric utility owned or operated by a county, municipality or other political subdivision of the State of New Mexico from connect, disconnect, installation or stand-by charges

Do You Need to Collect Gross Receipts Tax in New Mexico?

If you have nexus in New Mexico and are selling taxable goods or services to New Mexico residents, you’ll need to collect gross receipts tax in New Mexico. You’ll first be required to register with the state tax authority. You’ll want to set up tax collection at the point of sale to collect the correct amount of tax, as it is far more difficult to collect taxes from the buyer after the transaction. Then you’ll need to file your returns and remit payment to the state.

Of course, you don’t have to do any of this on your own. Let our comprehensive tax and accounting services lighten your load and your mind. Our experienced tax specialists are dedicated to helping businesses of all sizes navigate difficult and confusing tax issues including the New Mexico gross receipts tax.  We can help you determine nexus, register your business, and file your New Mexico tax return and gross receipts tax. Contact us today for a free consultation.