Most businesses starting in New Mexico that are selling a product or offering certain services will need to register for the gross receipts tax. The gross receipts tax is similar to sales tax in other states, but instead of the tax being charged to the consumer, it is a tax on businesses for the privilege of doing business in New Mexico. While the tax is imposed on the business, it is common to pass the tax to the purchaser.
Gross receipts tax is collected when:
- Selling property in New Mexico. Property includes things like furniture, computers, vehicles, digital goods, etc.
- Performing services in the state. A few services include construction, landscaping, car detailing and more.
- Leasing or licensing property in New Mexico.
- Granting a right to use a franchise in the state.
- Selling research and development services performed outside of the state when the product of the service is initially used in New Mexico. This is commonly referred to as a seller’s permit, sales tax license, sales tax number or sales tax registration.
The sales tax permit is obtained through the New Mexico Taxation and Revenue Department as a part of applying for the Combined Reporting System (CRS) Identification Number.
Check out the rest of this guide to find out who needs to register for the gross receipts tax, what products and services are taxable, how to register and reporting requirements.
Who needs to register for Gross Receipts Tax in New Mexico?
Anyone engaging in business in New Mexico must register with the Taxation and Revenue Department. Engaging in business may include:
- Selling products and taxable services in New Mexico (includes occasionally selling items at craft shows, fairs, seminars, conventions, etc.)
- Employees (including sales representatives or agents) are working in New Mexico
- An online business located in New Mexico is selling taxable products to New Mexico residents
- An out-of-state business selling more than $100,000 in taxable sales to New Mexico residents.
What products and services are taxable in New Mexico?
Almost all products and services are taxable in New Mexico, however there are a few exceptions, such as some agricultural and manufacturing products, medical equipment and prescriptions. See the list of gross receipts tax exemptions.
How to register for a Gross Receipts Tax Permit in New Mexico
After registering the business will be issued a Combined Reporting System (CRS) Number, sometimes known as a New Mexico Tax Identification Number.
Information needed to register includes:
- Business name
- Doing Business As name (if applicable)
- Federal Employer Identification Number (FEIN) – not required for a sole proprietorship with no employees
- Business address, phone and email
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Date business activity started or anticipated to start
- Filing status (monthly, quarterly, semi-annual, temporary and seasonal)
- Names, address, SSN of owners/officers/members
- Method of accounting (cash or accrual)
- Description of what products or services are being sold
How much does a Gross Receipts Tax Permit cost in New Mexico?
There is no cost for a gross receipts tax permit in New Mexico.
How long does it take to get a New Mexico gross receipts tax permit?
Applications made online are processed immediately and paper forms take 1-2 weeks.
Do you have to renew your New Mexico gross receipts tax permit?
The gross receipts tax permit is a one-time registration and no renewals are needed. Be mindful that if any information about the business changes such as the mailing address, additional locations or change in ownership, those changes need to be updated with the Taxation and Revenue Department.
Sales tax reporting
How is gross receipts tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate gross receipts tax rate to the customer. This tax is collected by the business who then sends it to the New Mexico Taxation and Revenue Department.
How much gross receipts tax is charged?
The gross receipts tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional local sales taxes that may be added by counties and municipalities. To find gross receipts tax rates, see the sales tax rate map from the New Mexico Taxation and Revenue Department.
When are New Mexico gross receipts tax returns due?
The Taxation and Revenue Department will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly or semi-annually. Generally, a business collecting over $1,000 in gross receipts tax each month will file monthly.
Filings are due the 25th day of the month following the reporting period, unless the 25th falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Gross receipts tax on purchases for resale
A business is able to purchase items to resell without paying the gross receipts tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge gross receipts tax to the end user of the item.
Wholesalers and distributors will require a CRS Business Identification Number and a completed Non-Taxable Transaction Certificate to document the items being purchased are for resale.
If you have questions about the sales tax permit, the New Mexico Taxation and Revenue Department has an overview to the gross receipts tax. TRD can also be contacted at their main number at 866-285-2996 or visiting a local center.
5301 Central NE
Albuquerque, NM 87198-8485
1200 S. St. Francis Dr.
Santa Fe, NM 87502-5374
3501 E. Main St., Suite N
Farmington, NM 87499-0479
2540 S. El Paseo Building #2
Las Cruces, NM 88001-0607
400 N. Pennsylvania Ave., Suite 200
Roswell, NM 88202-1557