New Mexico to offer Small Business Saturday in November
New Mexico has created a special small business sales tax holiday that will take place the Saturday after Thanksgiving in 2018 and 2019.
House Bill 79 provides a deduction for gross receipts from retail sales of eligible tangible personal property occurring between 12:01 a.m. and midnight on the first Saturday after Thanksgiving.
During that time, sellers that maintain their primary place of business in New Mexico and employ no more than 10 employees at any one time during the previous fiscal year do not have to charge customers gross receipts tax on qualifying items with a sales price of less than $500. The deduction does not apply to receipts for sales made by franchises, even those employing 10 or fewer employees.
Qualifying items include:
- Accessories such as backpacks, book bags, handbags, jewelry, luggage, wallets, and watches
- Bath accessories, bedding, and towels
- Books, journals, paper, writing instruments, art supplies, greeting cards, and postcards
- Clothing or footwear
- Cookware and small home appliances for residential use
- Cosmetics and personal grooming items
- Floral arrangements and indoor plants
- Home electronics such as computers, phones, tablets, stereo equipment, and related electronics accessories
- Tools used for gardening, home improvement, and vehicle maintenance and repair
- Toys or games that are physical objects clearly intended and designed to be used by children or families in play
- Video games or video game consoles and associated accessories
- Works of art including any drawing, painting, photograph, print, pottery, sculpture or ceramics, carving, textile, basketry, artifact, natural specimen, rare book, authors’ papers, objects of historical or technical interest, or other article of intrinsic cultural value
Businesses should report the amount of the deduction separately, in a manner prescribed by the New Mexico Department of Taxation and Revenue. More details will be provided as the date approaches.
In addition to encouraging taxpayers to shop at small local businesses, Governor Susana Martinez says Small Business Saturday “has the potential to put millions of dollars back into the pockets of our families and small businesses” — as much as $3 million, according to a gubernatorial press release.
To determine the program’s success, the department is tasked with compiling an annual report of the number of taxpayers that claimed the deduction, the aggregate amount of deductions claimed, and other information useful in evaluating the deduction’s effectiveness.
In addition to Small Business Saturday, New Mexico provides a back-to-school tax-free period every August.
More than a dozen states regularly offer sales tax holidays. While generally embraced by consumers, these can complicate sales tax compliance for retailers. Learn more about 2018 sales tax holidays.
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