New Mexico — Sales & Use Tax

New Mexico does not impose a traditional sales tax. Instead, the state levies a gross receipts tax (GRT) on persons engaging in business in New Mexico. The legal incidence of the GRT falls on the seller for the privilege of doing business in the state, rather than on the purchaser as with a traditional sales tax.

Although the tax is imposed on the seller, businesses commonly pass the cost of the tax on to customers. When passing the GRT on to customers, New Mexico law provides two options for presentation on the customer invoice:

• The tax may be separately stated on the invoice, bill, or similar document given to the customer; or
• The tax may be included in the amount billed, provided the invoice or bill contains an affirmative statement that the gross receipts tax is included in the billed amount. Generic terms such as “Includes NM gross receipts tax” are acceptable as long as the statement affirms the inclusion of the tax.

This rule is set in statute (Section 7-9-6 NMSA 1978, as amended effective July 1, 2019) and implemented in the New Mexico Administrative Code at 3.2.6.8 NMAC. Both sources confirm that either method is compliant so long as the customer is affirmatively notified when the tax is included in a non-itemized amount.

A person is "engaging in business" and subject to GRT if they have physical presence in the state and are conducting activity for direct or indirect benefit. Remote sellers without physical presence are also subject to GRT if, in the preceding calendar year, they had at least $100,000 of taxable gross receipts from sales, leases, licenses of tangible personal property, or sales of services sourced to New Mexico pursuant to Section 7-1-14 NMSA 1978.

The GRT applies to receipts from selling tangible personal property, performing services in New Mexico, and performing services outside New Mexico when the product of the service is initially used in New Mexico.

Source: NMSA 1978, § 7-9-6 Source: 3.2.6.8 NMAC

Remote sellers without physical presence in New Mexico have substantial nexus and are subject to gross receipts tax if, in the preceding calendar year, they had at least $100,000 of taxable gross receipts sourced to New Mexico. The threshold includes receipts from sales, leases, and licenses of tangible personal property, sales of services, and sales or licenses for use of real property. Receipts are sourced to New Mexico under the rules in Section 7-1-14 NMSA 1978.

Source: 3.2.1.9(A) NMAC

The New Mexico statewide base gross receipts tax (GRT) rate is 4.875%. This is the rate imposed on gross receipts by the state before any local option taxes are assessed by municipalities or counties. The most recent reduction of the state base rate—from 5.000% to 4.875%—went into effect on July 1, 2023. The authority for the state base rate is set in NMSA 1978, Section 7-9-4 and is confirmed on the New Mexico Taxation and Revenue Department's Local Option Taxes page, which describes "the state rate of 4.875% is the base." Local option increments add to this statewide base, so businesses should confirm the total tax rate applicable in their location using the TRD's rate lookup tools.

Source: NMSA 1978, § 7-9-4 Source: New Mexico Taxation and Revenue Department – Local Option Taxes

Persons engaging in business in New Mexico and subject to gross receipts tax must register with the New Mexico Taxation and Revenue Department. Remote sellers and marketplace providers without physical presence are required to register if they had at least $100,000 of taxable gross receipts in the preceding calendar year. This registration obligation became effective July 1, 2019. Businesses register through the Taxpayer Access Point (TAP) online system and receive a New Mexico Business Tax Identification Number (NMBTIN).

Source: FYI-206: Gross Receipts Tax and Marketplace Sales

New Mexico Taxation and Revenue Department assigns each taxpayer a filing frequency when the taxpayer registers for gross receipts tax. The assigned frequency is based on the taxpayer's expected or actual average monthly tax liability.

Due date: Gross receipts tax returns and payments are due on the 25th day of the month following the end of the reporting period. If the 25th falls on a weekend or holiday, the due date extends to the next business day. For example, a monthly filer's January gross receipts tax return is due February 25.

Filing frequencies are assigned based on the taxpayer's tax liability:

• Monthly — For taxpayers whose combined tax liability averages more than $200 per month, or who elect to file monthly.
• Quarterly — For taxpayers whose total tax liability is less than $600 per quarter.
• Semi-annually — For taxpayers whose total tax liability is less than $1,200 per six-month period.

Taxpayers may elect to file more frequently than their assigned frequency.

Electronic filing requirement: Taxpayers whose average monthly gross receipts tax liability during the preceding calendar year equaled or exceeded $1,000 must file and pay electronically through the Taxpayer Access Point (TAP).

Zero returns: Taxpayers must file a return for each assigned filing period even if no gross receipts tax was collected during that period. Failure to file a zero return can result in penalties.

Source: FYI-105: Gross Receipts and Compensating Taxes – An Overview, New Mexico Taxation and Revenue Department

New Mexico imposes gross receipts tax collection and remittance obligations on marketplace providers (the term used in New Mexico for what other states call marketplace facilitators). A marketplace provider is a person who facilitates the sale, lease, or license of tangible personal property or services, or licenses for use of real property, on a marketplace seller's behalf or on the provider's own behalf. "Facilitate" means listing or advertising the sale by any means (catalog, internet website, television, radio broadcast) and either directly or indirectly collecting payment from the customer and transmitting that payment to the seller, regardless of whether the marketplace provider receives compensation for its services.

Economic nexus threshold for marketplace providers

Marketplace providers without physical presence in New Mexico must register and collect gross receipts tax if they had at least $100,000 of taxable gross receipts in the previous calendar year from sales, leases, and licenses of tangible personal property, sales of licenses, and sales of services or licenses for use of real property sourced to New Mexico. This threshold and the marketplace provider collection obligation became effective July 1, 2019.

Gross receipts of marketplace providers

For gross receipts tax purposes, a marketplace provider's gross receipts include all receipts collected from sales, leases, and licenses facilitated for marketplace sellers that are sourced to New Mexico, even if the payment received from the buyer is eventually paid or transferred to the marketplace seller. The marketplace provider's gross receipts also include the fees charged by the provider to the marketplace seller. The marketplace provider is treated as the seller of the facilitated transaction and must collect and remit gross receipts tax on the full transaction amount, not just its commission.

Marketplace seller deduction

Marketplace sellers also have gross receipts from the same sales facilitated by the marketplace provider, creating dual taxation exposure. To prevent this, New Mexico provides a deduction for marketplace sellers. Receipts from sales facilitated by a marketplace provider may be deducted by the marketplace seller from its own gross receipts if the marketplace provider is registered with the New Mexico Taxation and Revenue Department and will collect and remit the gross receipts tax on those receipts. Marketplace sellers must still report the receipts on their gross receipts tax return (Form TRD-41413) and claim the deduction on the same return. If all receipts are deductible, no tax is owed by the seller, though filing the return remains required. Failure to file a return when required results in late-filing penalties even if no tax is due.

Relief of liability provisions

Under Section 7-9-4.3 NMSA 1978, a marketplace provider may be relieved of liability for failure to remit the correct amount of tax if the failure was due to incorrect information given by the marketplace seller (unless the provider and seller are affiliated persons), and the failure was not due to an error in sourcing the sale. When the marketplace provider is relieved of liability under this provision, the marketplace seller becomes solely liable for the amount of tax due. Beginning in calendar year 2024, the liability relief for a marketplace provider may not exceed three percent of the total tax due on receipts from sales by the marketplace provider as agent of a marketplace seller and sourced to New Mexico during the same calendar year.

Nontaxable transaction certificates

Buyers who make purchases from marketplaces and need to issue a nontaxable transaction certificate (NTTC) must execute the certificate to the marketplace provider who is paying the gross receipts tax and passing it on to the buyer, rather than to the underlying marketplace seller.

Source: FYI-206: Gross Receipts Tax and Marketplace Sales, New Mexico Taxation and Revenue Department; 3.2.1.9 NMAC

New Mexico imposes a compensating tax on the use or consumption of tangible personal property and certain other items within the state when gross receipts tax (GRT) has not been paid on those items. The compensating tax is New Mexico's functional equivalent to a use tax in other states.

When does the compensating tax apply? The tax applies when:

• Tangible personal property is acquired out-of-state or in New Mexico exempt from GRT, and is used, consumed, or stored (other than in the course of resale) in New Mexico (NMSA § 7-9-7(A)).
• This includes items purchased via mail order, internet, or from out-of-state vendors not registered for New Mexico GRT collection. For example, if a business or individual in New Mexico orders a computer from an out-of-state retailer that does not collect New Mexico GRT, the purchaser must pay compensating tax upon use in the state.
• It also applies to certain services or licenses, such as the use of property located in the state under a lease/license if not subject to GRT (NMSA § 7-9-7(B)).

Who owes the tax and who must collect?

• The person using or consuming property in New Mexico is liable for compensating tax if GRT has not been paid (NMSA § 7-9-9).
• If the seller has business presence in New Mexico, the seller must collect and remit compensating tax directly (NMSA § 7-9-10).
• If the seller is not required to collect, the buyer must self-assess and remit the tax using the Combined Reporting System (CRS) return (FYI-230). As of 2024, the CRS system is the standard reporting platform for GRT and compensating tax.

Rate of the compensating tax

• The compensating tax rate is equal to the gross receipts tax rate: 4.875% statewide base rate as of 2024, with local rates/district increments applying as for GRT (NMSA § 7-9-7).
• Actual rates for a locality should be verified using the TRD rate lookup tool.

Reporting and compliance

• Compensating tax is reported on the same CRS returns as GRT (FYI-230).
• The tax must be separately stated if charged by a seller required to collect (3.2.12.8 NMAC).
• Documentation of tax paid should be retained in case of DOR inquiry.

Relation to gross receipts tax

• Compensating tax prevents avoidance of GRT on in-state use by taxing use of goods brought in tax-free (NMSA § 7-9-7, FYI-230).
• If GRT was paid on the purchase, compensating tax does not apply.

Exemptions

• Exemptions mirror those of GRT. Notably, tangible personal property brought into New Mexico as part of a household move is generally exempt (NMSA § 7-9-7.1; FYI-230).

Source: NMSA 1978, § 7-9-7 Source: NMSA 1978, § 7-9-9 Source: NMSA 1978, § 7-9-10 Source: 3.2.12.8 NMAC Source: TRD FYI-230: Compensating Tax

Note: As of this update, two legislative-history citations (HB0036, HB006) could not be relinked to a live official PDF, but remain as text for historical continuity. All other citations are current and functional as of 2024-07-12.

Effective July 1, 2021, New Mexico transitioned from origin-based to destination-based sourcing for gross receipts tax (GRT) purposes. Prior to this change, the GRT was generally sourced to the seller’s place of business (origin). Beginning July 1, 2021, receipts are instead sourced to the location where the property is delivered or where the product of the service is delivered, unless a statutory exception applies.

The principal authority for the change is NMSA 1978, Section 7-1-14, which was repealed and reenacted by Laws 2019, ch. 270 (HB6), §11, effective July 1, 2021. The transition is also detailed in New Mexico Taxation and Revenue Department's (TRD) tax bulletins, including FYI-200 and FYI-206.

Scope of destination sourcing:

• Sales (including remote sales) of tangible personal property: sourced to the delivery address, including out-of-state sellers delivering to New Mexico customers.
• Services: sourced to the location where the product of the service is delivered, except for professional services (as defined under §7-1-14), which are generally sourced to the seller's primary place of business. "Product of the service" generally refers to where the benefit or result of the service is first realized by the customer, as explained in FYI-200 and illustrated through examples in that bulletin.
• Construction and real estate-related services: sourced to the location of the real property.

Key exceptions:

• "Professional services" are defined and still sourced to the seller’s office location, not the customer.
• Leasing vehicles: Generally, the location where the lessee receives the vehicle.
• Other specialized transactions may have additional rules as explained in FYI-200 and FYI-206.

Application: Destination sourcing applies for determining both the state base GRT rate and any local option district taxes. This applies equally to in-state and remote sellers, including marketplace providers and out-of-state retailers making direct sales to New Mexico customers. All receipts subject to GRT must use the correct New Mexico location code and corresponding local rate based on the transaction’s delivery destination as of returns filed for periods starting July 1, 2021.

Primary authority: NMSA 1978, § 7-1-14; FYI-200; FYI-206. The FYI bulletins are official agency guidance from the New Mexico Taxation and Revenue Department, summarizing these statutory rules and giving practical filing and rate-location guidance to sellers. For additional detail or highly specialized scenarios (e.g., certain digital goods), consult the cited TRD bulletins.

Source: NMSA 1978, § 7-1-14 Source: TRD FYI-200: Gross Receipts Reporting Location and the Appropriate Tax Rate Source: TRD FYI-206: Gross Receipts Tax and Marketplace Sales

New Mexico allows a deduction from gross receipts for sales of tangible personal property or licenses when the buyer resells the property in the ordinary course of business. This prevents pyramiding of the gross receipts tax (GRT) for businesses making sales for resale.

Statutory basis The deduction for resale is set forth in Section 7-9-47 NMSA 1978. The key requirements are:

• The buyer must deliver to the seller a properly executed Nontaxable Transaction Certificate (NTTC) or provide alternative evidence (as allowed by Section 7-9-43 NMSA 1978); and
• The buyer must resell the property (or combine it with other property for resale) in the ordinary course of business.

A sale for resale that meets these requirements qualifies for the deduction, removing the receipts from the seller's GRT base.

Nontaxable Transaction Certificate (NTTC) requirement A valid NTTC, executed by the buyer and accepted in good faith by the seller, is conclusive proof that the transaction is deductible under Section 7-9-47. Sellers may also accept alternative documentary evidence—including invoices, statements, and purchase orders—if the NTTC is not provided, but the burden of proof then shifts to the buyer (per Section 7-9-43). Sellers are responsible for retaining the NTTC or evidence supporting the deduction.

Seller's administrative obligations Administrative Code Section 3.2.205.8 NMAC requires sellers to obtain the correct type of NTTC, delivered by a buyer who resells in the ordinary course of business. If alternative evidence is used, it must meet the standards of Section 7-9-43 and applicable regulations (such as 3.2.201.10 NMAC). Failure to secure or retain the NTTC or adequate alternative evidence exposes the seller to disallowance of the deduction and assessment of GRT.

Border state resale certificate exception Under 3.2.201.19 NMAC, a Border States Uniform Sale for Resale Certificate may be treated as an NTTC for buyers not required to be registered in New Mexico, but only under stipulated conditions. This exception does not permit use of other states' general resale certificates unless authorized by rule.

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If an NTTC is revoked or found invalid after claiming the deduction: liability and cure mechanics

If a previously-accepted NTTC is later determined to be invalid, revoked, or otherwise ineligible (examples: buyer ceases resale activity, deregisters, or misuses the certificate), liability and possible remediation are determined by New Mexico law as follows:

• Good-faith acceptance shields the seller. If the seller accepted the NTTC in good faith—meaning honestly, with no knowledge the buyer was ineligible and with reasonable diligence to confirm the NTTC covers the goods/services—then the deduction is conclusively allowed, even if the buyer later becomes ineligible or the certificate is revoked (NMSA 1978, § 7-9-43; 3.2.201.14 NMAC).
• Buyer liability for misuse. If the buyer provided the NTTC materially falsely, or was not properly qualified, liability for the tax, penalty, and interest is allocated to the buyer, not the seller (NMSA 1978, § 7-9-43(A); FYI-204 p. 6).
• Seller's risk if documentation is not timely supplied or not in good faith. If the NTTC was not accepted in good faith, or is not produced within 60 days of a Department audit request, the deduction will be disallowed and GRT (plus penalty, interest) assessed retroactively to the seller (3.2.201.13 NMAC). There is no further statutory cure window after this 60-day period.
• Best practices: Sellers are advised to regularly verify NTTC status, keep records for at least three years after deduction, and promptly respond to any departmental information requests.

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Summary

• To deduct receipts from sales for resale under Section 7-9-47, sellers must obtain a proper NTTC from buyers (or acceptable alternative evidence)
• Sellers must retain documentation and use NTTCs of the correct type
• The deduction only applies where the buyer will resell in the ordinary course of business
• Special rule allows border-state certificates for certain out-of-state buyers
• If an NTTC is invalidated after deduction is claimed, seller protection, retroactive liability, and remediation depend on timely documentation and good faith.

Source: NMSA 1978, §7-9-47 Source: NMSA 1978, §7-9-43 Source: 3.2.201.13 NMAC Source: 3.2.201.14 NMAC Source: 3.2.205.8 NMAC Source: 3.2.201.19 NMAC Source: TRD FYI-204: Nontaxable Transaction Certificates

Not yet human confirmed — practical implementation and department or case interpretations welcome for further editorial enrichment as of 2026-07-12.

New Mexico’s gross receipts tax (GRT) system includes a wide array of statutory deductions and exemptions, each with specific documentary and procedural requirements. These generally fall into two broad categories: (1) deductions that exempt receipts from the tax base when statutory conditions are met, and (2) outright exemptions from taxation. The most common process for substantiating a deduction requires the seller to secure a properly executed Nontaxable Transaction Certificate (NTTC) from the buyer.

Statutory framework

• New Mexico law lists available deductions and exemptions in Article 9, Chapter 7 of NMSA 1978 (notably §§ 7-9-13, 7-9-47, and others). Each deduction is narrowly construed and may have unique eligibility criteria, such as sales for resale (§ 7-9-47), interstate sales (§ 7-9-55), government sales, or deductions for specific industries (health care, manufacturing, R&D, construction, etc.).
• To claim most deductions, the seller must obtain and retain a properly executed NTTC prior to filing the return where the deduction is claimed (§ 7-9-43). The buyer’s NTTC is conclusive proof of the right to the deduction if obtained and accepted in good faith.

Types of NTTCs and alternatives

• The NTTC must be of a type specifically applicable to the transaction per regulations (multiple types exist, depending on the transaction; see NMAC 3.2.204–3.2.226).
• If an NTTC cannot be secured, other documentary proof (such as contracts, invoices, buyer’s affidavits, or government purchase orders) may be accepted under § 7-9-43, but the burden then shifts to the seller to prove deductibility, and the evidence must meet regulatory standards (see 3.2.201.10 NMAC for examples).

Deduction eligibility requirements

• Each deduction requires meeting all statutory and regulatory prerequisites. For example, the resale deduction (§ 7-9-47) is allowed only if the seller obtains a resale NTTC or equivalent proof, and the buyer is engaged in resale in the ordinary course of business.
• NTTCs must be retained by the seller for at least three years from the end of the calendar year in which the deduction is claimed (3.2.201.10 NMAC).
• Failure to maintain proper documentation can result in disallowance of the deduction and assessment of GRT.

Summary

• New Mexico offers a broad array of GRT deductions and exemptions, most requiring seller documentation.
• The NTTC is the primary documentation for most deductions; alternative proof is possible but riskier.
• The burden of proof always remains with the seller.

Source: GRT Filer’s Kit, July 2023, New Mexico Taxation and Revenue Department Source: 3.2.201.10 NMAC

Effective July 1, 2021, New Mexico applies destination-based sourcing for gross receipts tax (GRT). Under this rule, taxable receipts are reported—and the correct combined state and local rate applied—based on the delivery location of goods or the place where the product of a service is delivered to the customer (not the seller’s business location).

Location determination hierarchy: For each sale, the reporting location (and local GRT rate) is determined by a statutory hierarchy in N.M. Admin. Code § 3.1.4.13(C):

1. If delivery and receipt occur at the seller’s business location, use the seller’s location.
2. Otherwise, if the delivery instructions to the buyer or their donee are known, use that destination address.
3. If not, use the buyer’s address in the seller’s business records (in good faith).
4. If that is not available, use the address on the payment instrument provided by the buyer (in good faith).
5. If none of the above, use the location from which the seller ships or transmits the property, product, or service.

Special rules for services:

• Most services: sourced where the product of the service is delivered/used.
• Professional services: sourced to the seller’s (service provider’s) place of business, unless the service is performed outside New Mexico and the product first used in New Mexico (then taxed at the state rate).
• Construction services: sourced at the site of real property improved.
• Transportation of people or property: sourced at initial entry into the conveyance in New Mexico.

The reporting location determines which local jurisdiction code and tax rate apply. Accurate sourcing is required for compliance; sellers must use the New Mexico Taxation and Revenue Department’s location code and rate map when preparing their GRT returns.

For detailed discussion, see FYI-200 and the official GRT overview page. Exceptions and further nuances—especially for digital goods or mixed transactions—are detailed in FYI-200.

Source: N.M. Admin. Code § 3.1.4.13 Source: TRD FYI-200 Source: NM TRD Gross Receipts Overview

New Mexico’s Gross Receipts Tax (GRT) statutes provide a large set of detailed exemptions and deductions. These distinctions are significant for compliance and planning: an exemption removes receipts from the GRT base by law, while a deduction requires the taxpayer to meet specific criteria and to claim it on the return, often with rigorous documentation such as a Nontaxable Transaction Certificate (NTTC).

1. Sales for Resale (§ 7-9-47 NMSA 1978) Receipts from selling tangible personal property or licenses for resale are deductible if the seller obtains an NTTC executed by a registered reseller. The NTTC is a statutory requirement; alternative evidence is only sufficient if NTTCs are not reasonably obtainable. This prevents pyramiding of GRT on wholesale transactions.

2. Ingredient or Component Deduction (§ 7-9-46 NMSA 1978) Sales of property to a manufacturer as an ingredient or component in a product for resale qualify for a deduction, if the buyer provides the correct NTTC. The statute defines "ingredient" and “component part” restrictively; items consumed or used up in fabrication, but not becoming part of the finished product, do not qualify.

3. Interstate and Out-of-State Commerce (§§ 7-9-55, 7-9-57, 3.2.1.21 NMAC) Receipts from property delivered out of state, or services whose “product” is initially used outside New Mexico, are generally deductible. For services performed outside New Mexico but the benefit received in New Mexico, NMAC 3.2.1.21 provides factors for “initial use” (such as the customer’s location, where benefit is realized, etc.). NTTC may be required—statute and regulations must be checked for each case.

4. Exempt Sales to Government and Indian Tribes (§ 7-9-13 NMSA 1978) Receipts from selling property or services to the United States, New Mexico, their agencies, certain Indian tribes and their wholly owned entities are exempt—not deduction-based. Only sales directly to those entities qualify; sales to contractors or agents do not unless specifically allowed elsewhere in statute.

5. Construction and Real Estate (§§ 7-9-52, 7-9-54 NMSA 1978) Sales or leases of real property are not subject to GRT (excluded by definition, not deduction or exemption). Certain sales of construction materials or labor to governments (with proper project/agency documentation) are deductible, but strict requirements apply. Read statutory text for contract-by-contract applicability.

6. Medical and Health Care Deductions (§§ 7-9-93, 7-9-77.1, 7-9-73.1 NMSA 1978) Deductions exist for payments received from Medicare/Medicaid, from insurers for medical services, and by licensed providers (definitions and qualifying provider types listed in statute). Health care deductions are often tightly defined by provider license and payor source.

7. Specialized Industry, Agriculture, R&D (§§ 7-9-58, 7-9-54.1, 7-9-85 NMSA 1978) Deductions are available for receipts from selling agricultural goods, research and development services, and certain export transactions. Each has precise eligibility tests (e.g., R&D must be performed for a qualified client engaged in manufacturing).

Documentation and NTTC Requirements (§ 7-9-43 NMSA 1978) For most deductions, the NTTC is the exclusive proof required by law; if not obtained, the deduction can be denied. Alternative documentation is narrowly permitted only as stated in the statute or regulation (e.g., government contracts may suffice for public works deductions).

Authority for all major categories above is current through the 2024 session, as compiled in HB0027 (2024 Reg. Sess.), Title 3 NMAC, and the Taxation and Revenue Department’s official bulletins. Always consult the most recent text for specific criteria; many statutes are tightly drafted and strictly enforced in audit.

Source: NMSA 1978, §§ 7-9-13, 7-9-43, 7-9-46, 7-9-47, 7-9-50, 7-9-52, 7-9-54, 7-9-54.1, 7-9-55, 7-9-57, 7-9-58, 7-9-73.1, 7-9-77.1, 7-9-85, 7-9-93 Source: 3.2.1.21 NMAC Source: TRD GRT Filers Kit – July 2023

To determine the gross receipts tax (GRT) rate in New Mexico for any transaction, practitioners must combine the statewide base GRT rate with all local option increments imposed by the municipality and county in which the taxable event occurs. The combined rate is calculated based on the reporting location as determined by New Mexico’s destination-based sourcing rules.

Step 1: Identify the correct reporting location and code

• For goods: the delivery address.
• For services: where the product of the service is delivered or used, except for professional services (see NMAC 3.1.4.13 for the sourcing hierarchy).
• Each reporting location is assigned a six-digit location code by the New Mexico Taxation and Revenue Department (TRD). This code determines the applicable municipal and county GRT rates and is required to be reported on CRS returns. The mandate to use the location code is confirmed in both FYI-200 and FYI-240.

Step 2: Use only official TRD tools and schedules

• Practitioners must use the Gross Receipts Tax Rate Map and Rate Location Code Lookup on the TRD website, which reflect all current state, county, and municipal increments. These resources are updated semiannually (January and July) and are the authority for rate determination. Downloadable rate schedules and the interactive map are available at the TRD Local Option Taxes and Rate Map portals.
• Outdated, non-governmental, or third-party sources are not reliable for current rates; the official TRD lookup is required.

Step 3: Documentation and filing

• The total GRT (state plus all local increments) is collected and remitted to the state as a single payment. Filers must report the correct 6-digit location code and rate for every location where taxable transactions occur; this is mandatory for proper return preparation and audit compliance (FYI-240, p.3-4).

Best practice:

• Always verify rates against the official tools before invoicing or return preparation as rates can change by local ordinance. The authoritative sources—TRD’s Local Option Taxes page, Gross Receipts Tax Rate Map, FYI-240 bulletin, and NMAC 3.1.4.13—govern compliance and provide instructions for location code use and combined rate determination.

Source: New Mexico Taxation and Revenue Department – Local Option Taxes Source: Gross Receipts Tax Rate Map Source: FYI-240: Local Option Gross Receipts Taxes Source: 3.1.4.13 NMAC

Not yet human confirmed as of 2026-06-17.

Included Services

New Mexico imposes gross receipts tax on services performed in the state, as well as services performed outside the state whose product is first used in New Mexico. This broad inclusion stems from the statutory definition of “gross receipts” in NMSA 1978 § 7‑9‑3.5(A)(1), which explicitly includes

• services performed within New Mexico, and
• services performed outside, the product of which is initially used in New Mexico.

Source: NMSA 1978 § 7‑9‑3.5(A)(1)

Examples of Services Generally Taxable Although there is no exhaustive list in statute, this expansive definition means that routine professional/business services—such as legal, accounting, consulting, advertising, telecommunications, and other labor-based services—are generally taxable unless a specific exemption or deduction applies.

Limited Exemptions or Deductions Several narrow statutory provisions provide deductions for certain services:

• Healthcare practitioner services: Under NMSA 1978 § 7‑9‑93, receipts from commercial contract or Medicare Part C services paid by managed care providers or health care insurers may be deducted, if within the practitioner’s scope of practice.

Source: NMSA 1978 § 7‑9‑93

• Professional services sold to manufacturers: NMSA 1978 § 7‑9‑46.1 allows a deduction for professional services sold to a person in the business of manufacturing, provided the buyer delivers a valid Nontaxable Transaction Certificate (NTC); effective through July 1, 2034.

Source: NMSA 1978 § 7‑9‑46.1

Section Summary New Mexico’s GRT applies broadly to services performed in-state or whose use begins in-state. Common professional/business services are taxable except where specific statutory deductions exist—most notably in narrowly tailored contexts like certain healthcare payments and professional services for manufacturers.

Human confirmation status: Not yet human confirmed — pending editorial peer review.