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New Mexico Sales Tax Holiday

  • Jul 30, 2012 | Susan McLain

The New Mexico Sales Tax Holiday (also called the New Mexico Gross Receipts Tax Holiday) “…begins at 12:01 a.m. on the first Friday of August and concludes on the following Sunday at midnight” (August 3-5, 2012).

We’ve reported on the sales tax holiday guidance for New Mexico but now we’d like to provide some additional information.

Taxes are still due on services such as:

  • alterations, dry cleaning
  • computer repair services or installation
  • construction, repair, maintenance, landscaping
  • medical treatment, physical examinations for school
  • licenses

The statute also specifically makes the following ineligible for the deduction from gross receipts:

  • e-readers
  • personal digital assistants (PDAs), MP3 players, cassette players and recorders as well as prerecorded CDs, DVDs and cassette tapes
  • cameras, books, magazines, periodicals
  • musical instruments
  • video games, board games, computer games, handheld gaming devices
  • “All computer and computer-related equipment not specifically listed by statute or regulation as deductible…unless bundled with and included in the price of a deductible item within the price limits set by law.”
  • Briefcases and luggage
  • Swimwear, cover-ups and caps

Businesses need to know how to handle the following transactions:

Rain Checks – “Receipts from qualified sales of tangible personal property made with a rain check issued during the term of the tax holiday are deductible from gross receipts. Sales made and paid for with a rain check outside the term of the tax holiday are fully taxable regardless of when the rain check is issued (Regulation NMAC).”

Layaway Sales – Final payment and delivery of the qualifying merchandise must occur during the gross receipts tax holiday.

Internet, Mail Order and Telephone Sales – Two conditions exist for an item to be deductible: “1. The item is both delivered to and paid for by the customer during the tax holiday period, or 2. The customer orders and pays for the item and the retailer accepts the order during the tax holiday, even if delivery of the item takes place after the tax holiday (Regulation NMAC).”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”