New Mexico Tax Nexus

Businesses with nexus in New Mexico are required to register with the New Mexico Department of Taxation and Revenue and to charge, collect, and remit the appropriate tax. Instead of sales tax, New Mexico imposes a gross receipts tax.

Generally, a business has nexus in New Mexico when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.

New Mexico nexus for out-of-state sellers

State law stipulates, “Every person carrying on or causing to be carried on any activity within this state attempting to exploit New Mexico’s markets who sells property or sells property and service for use in this state and who is not subject to the gross receipts tax on receipts from these sales shall collect the compensating tax from the buyer and pay the tax collected to the department.” “Activity” is defined as:

  • Maintaining or utilizing an office, distribution house, sales house, warehouse, service enterprise, or other place of business
  • Maintaining a stock of goods
  • Regularly soliciting orders whether or not such orders are accepted in New Mexico, unless the activity in New Mexico consists solely of soliciting by direct mail
  • Regularly engaging in the delivery of property in New Mexico other than by common carrier or U.S. mail as a consequence of an advertising or other sales program directed at potential customers

The following are specifically excluded from the definition of “activity”:

  • Having a world wide web site as a third-party provider on a computer physically located in New Mexico but owned by another nonaffiliated person
  • Using a nonaffiliated third-party call center to accept and process telephone or electronic orders of tangible personal property or licenses primarily from non-New Mexico buyers, which orders are forwarded to a location outside New Mexico for filling, or to provide services primarily to non-New Mexico customers   

See New Mexico Administrative Code 3.2.13.8; NMS Section 7-9-10; Gross Receipts Overview; and the New Mexico Taxation and Revenue Department, Determining Nexus.