The 2016 New Mexico State Sales Tax
What is the 2016 New Mexico Sales Tax Rate?
The New Mexico state sales tax rate is 5.13%, and the average NM sales tax after local surtaxes is 7.35%.
- Groceries are exempt from the New Mexico sales tax
- Counties and cities can charge an additional local sales tax of up to 3.563%, for a maximum possible combined sales tax of 8.693%
- New Mexico has 419 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
- New Mexico has a lower state sales tax than 69.2% of states
While New Mexico does not have a statewide sales tax it does have a statewide "gross receipts tax", which is commonly passed on to the consumer by businesses just like a normal sales tax. All goods and services are taxed under New Mexico's law, excluding any kind of food sold for off-site consumption (such as groceries).
New Mexico does allow municipalities and cities to levy additional local taxes on top of the statewide gross receipts tax. Because the sales tax in New Mexico has such a broad base and includes many more services than most states, New Mexico collects significantly more sales tax revenue with other states with comparable tax rates.
If you are a New Mexico business owner, you can learn more about how to collect and file your New Mexico sales tax return at the 2016 New Mexico Sales Tax Handbook .
New Mexico Sales Tax Exemptions
New Mexico doesn't collect sales tax on purchases of most groceries. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.
Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Unlike many states, New Mexico treats both candy and soda as groceries for sales tax purposes. Other items including gasoline, alcohol, and cigarettes are subject to various New Mexico excise taxes in addition to the sales tax.
New Mexico has four sales tax holidays, during which certain items can be purchased sales-tax free. For more details, see the New Mexico sales tax holiday calendar.
In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. The NM sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. New Mexico's sales tax rates for commonly exempted items are as follows:
$100 Restaurant Dinner
$100 of groceries
$100 in clothes
$100 of consumer products
$5.13 sales tax
$0.00 sales tax
$5.13 sales tax
$5.13 sales tax
New Mexico Sales Tax Exemption Certificate
Unlike a Value Added Tax (VAT), the New Mexico sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a New Mexico Sales Tax Exemption Form to buy these goods tax-free.
Companies or individuals who wish to make a qualifying purchase tax-free must have a New Mexico state sales tax exemption certificate, which can be obtained from the New Mexico Taxation and Revenue Department . On making an exempt purchase, Exemption Certificate holders may submit a completed New Mexico Sales Tax Exemption Form to the vendor instead of paying sales tax.
Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full New Mexico sales tax code) can be downloaded from the New Mexico Taxation and Revenue Department here .
New Mexico Sales Tax Calculator
Whenever you make a purchase at a licensed New Mexico retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our New Mexico sales tax calculator.
New Mexico Use Tax
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If you buy goods and are not charged the New Mexico Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 5.13% sales tax (less any foreign sales tax paid) for these items yourself as the New Mexico Use Tax.
Your are expected to voluntarily list your liable purchases on a New Mexico Use Tax Return, which should be attached with payment to your New Mexico Income Tax Return. Historically, compliance rates with with the New Mexico Use Tax have been low.
New Mexico Local Sales Taxes
New Mexico does not allow local jurisdictions like cities or counties to collect a local sales tax. The New Mexico state sales tax of 5.13% is applicable statewide. You can view the sales tax rates for various cities in New Mexico here.
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