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Amazon to collect New Mexico sales tax, April 2017


 Amazon purchases will be subject to New Mexico tax beginning April 1, 2017.

Beginning April 1, 2017, ecommerce giant Amazon will collect tax on purchases delivered to destinations in New Mexico. Aside from the five states that don’t have a general sales tax — Alaska, Delaware, Montana, New Hampshire, and Oregon — New Mexico is currently one of only four states where Amazon does not collect tax. Now that list has shrunk to three: Hawaii, Idaho, and Maine. At the rate news is breaking, that could change by the time this post is complete.

Over the past few months, Amazon has voluntarily agreed to collect and remit in more than a dozen states. On March 1, it started collecting Arkansas, Oklahoma, and Wyoming tax. On Feb. 1, it was Mississippi, Missouri, Rhode Island, South Dakota, and Vermont. Four states announced that Amazon would collect as of Jan. 1: Iowa, Louisiana, Nebraska, and Utah. Alabama and the District of Columbia kicked off the trend in November and October, respectively.

The New Mexico announcement isn’t surprising; given Amazon’s recent actions, it seemed more a question of “when” than “if.” As in other states, officials in New Mexico seem pleased: Ben Cloutier, spokesman for the New Mexico Taxation and Revenue Department, expects Amazon to boost the state’s gross receipts tax revenue by tens of millions of dollars.

Neither company nor state officials have explained why Amazon has decided to collect New Mexico tax in April. Gov. Susana Martinez’s office referred the Albuquerque Journal to Cloutier for more information, and Cloutier wouldn’t comment on “whether the state and company forged some kind of agreement.” Yet Cloutier did note that Amazon sometimes opts to collect in states where it plans to expand, and he said he hopes that’s the case in his state: “That’s what we’re most excited about. The potential is there for more growth and not just the immediate revenue impact.”

New Mexico wants remote sales tax revenue from other vendors, too

Although the tax revenue from Amazon sales will be welcome, Amazon isn’t the only remote vendor doing business in the state. New Mexico has long been interested in capturing more revenue from remote sales. Until recently, however, state officials were holding out for a federal solution, waiting to see if Congress would create a national policy that would make it easier for states to tax sales by remote dealers. Congress could act — several bills addressing this issue are awaiting consideration  — but to date it has not.

Now, a movement to capture more remote sales tax revenue is gaining momentum. House Bill 202, approved by the House and now in committee in the Senate, clarifies that the “place of business of a person without physical presence in this state is where the property or service being sold is delivered.” If enacted, it would require out-of-state vendors with annual gross receipts of at least $100,000 to collect and remit New Mexico tax beginning July 1, 2017.

Could this legislation have inspired Amazon to collect New Mexico tax? One Hawaii lawmaker has noticed that Amazon has “struck deals with states that had passed laws to try to collect online taxes, even if those laws were later overturned by the courts.” Hawaii, which is on the short list of states where Amazon does not collect, is currently considering several bills to increase collections of the tax owed on remote sales. Will Hawaii be next to issue a statement about Amazon?

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.