New Mexico sales and use tax guide

New Mexico does not impose a traditional sales tax. Instead, the state levies a Gross Receipts Tax (GRT) on businesses for the privilege of doing business in the state. The statewide GRT rate is currently 4.875%, and local governments may impose additional taxes that vary by location. As a result, combined gross receipts tax rates can range from 5.25% to 9.44% in some jurisdictions. Because rates are so varied and update periodically, businesses should verify the applicable rate for each location by using the current tax rate map found on the New Mexico Taxation and Revenue Gross Receipts Location Code and Tax Rate Map webpage.

As a business owner selling taxable goods or services, you act as an agent of the state of New Mexico by collecting tax from purchasers and passing it along to the appropriate tax authority. Gross receipts tax in New Mexico is administered by the New Mexico Taxation & Revenue Department (TRD).

Any gross receipts tax collected from customers belongs to the state of New Mexico, not you. It’s your responsibility to manage the taxes you collect to remain in compliance with state and local laws. Failure to do so can lead to penalties and interest charges.

When you need to collect New Mexico gross receipts tax

New Mexico levies a Gross Receipts Tax (GRT) on businesses engaged in selling property, performing services, leasing property, and certain other business activities in the state. Although businesses often pass the tax on to customers, the tax is legally imposed on the seller and must be reported and remitted to the New Mexico Taxation and Revenue Department.

To help you determine whether you need to collect gross receipts tax in New Mexico, start by answering these three questions:

1. Do you have nexus in New Mexico?
2. Are you selling taxable goods or services to New Mexico residents?
3. Are your buyers required to pay gross receipts tax?

If the answer to all three questions is yes, you’re required to register with the state tax authority, collect the correct amount of gross receipts tax per sale, file returns, and remit to the state.

Failure to collect New Mexico gross receipts tax

If you meet the criteria for collecting gross receipts tax and choose not to, you’ll be held responsible for the tax due, plus applicable penalties and interest.

It’s extremely important to set up tax collection at the point of sale — it’s near impossible to collect gross receipts tax from customers after a transaction is complete.

The obligation to collect and remit taxes in New Mexico depends on whether your business has nexus with the state. Nexus is a legal term that refers to a sufficient connection between a business and a state. If your business establishes nexus in New Mexico, you may be required to register with the state, file Gross Receipts Tax returns, and remit any tax due on taxable receipts.

Nexus triggers

Sales tax nexus in all states used to be limited to physical presence: A state could require a business to register and collect and remit sales tax only if it had a physical presence in the state, such as employees or an office, retail store, or warehouse.

In June 2018, the Supreme Court of the United States overruled the physical presence rule with its decision in South Dakota v. Wayfair, Inc. States are now free to tax businesses based on their economic and virtual connections to the state, or economic nexus.

While physical presence still triggers a gross receipts tax collection obligation in New Mexico, it’s now possible for out-of-state sellers to have nexus with New Mexico.

Out-of-state sellers

Out-of-state sellers with no physical presence in a state may establish gross receipts tax nexus in the following ways:

Click-through nexus: Having an agreement to reward a person(s) in the state for directly or indirectly referring potential purchasers of goods through an internet link, website, or otherwise. At this time, New Mexico has not enacted a click-through nexus law.

Economic nexus: Having a certain amount of economic activity in the state. Remote sellers must register with the state then collect and remit New Mexico gross receipts tax if gross revenue from the sale of taxable tangible personal property or taxable services in the state total at least $100,000 during the current or previous year.

Inventory in the state: Storing property for sale in the state. This includes merchandise owned by Fulfillment by Amazon (FBA) merchants and stored in New Mexico in a warehouse owned or operated by Amazon.

Marketplace sales: Making sales through a marketplace. Marketplace facilitators with at least $100,000 in gross revenue from sales made or facilitated in New Mexico are responsible for collecting and remitting gross receipts tax to the New Mexico TRD.

Trade shows: Attending conventions or trade shows in New Mexico. You may be liable for collecting and remitting New Mexico tax on orders taken or sales made during New Mexico conventions or trade shows.

If you establish nexus in New Mexico, you generally must register with the New Mexico Taxation and Revenue Department (TRD), file Gross Receipts Tax returns, and remit any tax due on taxable gross receipts. Businesses may choose to pass the tax on to customers, but the legal obligation to collect and remit the tax rests with the seller.

For additional guidance, consult the New Mexico Taxation and Revenue Department – Determining Nexus webpage.

Trailing nexus

Sales tax nexus can linger even after a retailer ceases the activities that caused it to be “engaged in business” in the state. This is known as trailing nexus. New Mexico does not have an explicitly defined trailing nexus policy.

Fulfillment by Amazon (FBA)

If you’re an active Amazon seller and you use Fulfillment by Amazon (FBA), you need to know where your inventory is stored and if its presence in a state will trigger nexus. FBA sellers can also download an Inventory Event Detail Report from Amazon Seller Central to identify inventory stored in New Mexico.

If you sell taxable goods to New Mexico residents and have inventory stored in the state, you likely have nexus and an obligation to collect and remit tax. To begin to understand your unique nexus obligations, check out our free economic nexus tool or consult with a trusted tax advisor.

Sourcing gross receipts tax in New Mexico: which rate to collect

New Mexico does not follow a traditional origin-based or destination-based sales tax model. Instead, Gross Receipts Tax sourcing is generally determined by where the benefit of the transaction occurs, which may depend on where goods are delivered or where services are performed. Because of this, businesses must determine the correct tax rate based on New Mexico’s sourcing rules rather than simply the ship-from address.

After determining you have gross receipts tax nexus in New Mexico, you need to register with the proper state authority and collect, file, and remit gross receipts tax to the state. We get a lot of questions about this and recognize it may be the most difficult hurdle for businesses to overcome. Avalara Licensing can help you obtain your New Mexico business license and tax registration.

How to register for a New Mexico seller’s permit

You can register for a New Mexico seller’s permit online through the New Mexico TRD. To apply, you’ll need to provide the New Mexico TRD with certain information about your business, including but not limited to:

• Business name, address, and contact information
• Federal EIN number
• Date business activities began or will begin
• Projected monthly sales
• Projected monthly taxable sales
• Products to be sold

Cost of registering for a New Mexico seller’s permit

There’s currently no cost to register for a New Mexico Tax Combined Reporting System (CRS) Identification Number.

Acquiring a registered business

You must register with the New Mexico Taxation & Revenue Department if you acquire an existing business in New Mexico. The state requires all registered businesses to have the current business owner’s name and contact information on file.

Streamlined Sales Tax (SST)

The Streamlined Sales Tax Agreement (SSUTA), or Streamlined Sales Tax (SST), is an effort by multiple states to simplify the administration and cost sales tax for remote sellers. Remote sellers can register in multiple states at the same time through the Streamlined Sales Tax Registration System (SSTRS).

New Mexico is not an SST member state.

Once you’ve successfully registered to collect New Mexico gross receipts tax, you’ll need to apply the correct rate to all taxable sales, remit gross receipts tax, file timely returns with the New Mexico Taxation and Revenue Department, and keep excellent records. Here’s what you need to know to keep everything organized and in check.

How you collect New Mexico gross receipts tax is influenced by how you sell your goods:

Brick-and-mortar store: Have a physical store? Brick-and-mortar point-of-sale solutions allow users to set the gross receipts tax rate associated with the store location. New tax groups can then be created to allow for specific product tax rules.

Hosted store: Hosted store solutions like Shopify and Squarespace offer integrated tax rate determination and collection. Hosted stores offer sellers a dashboard environment where New Mexico gross receipts tax collection can be managed.

Marketplace: Marketplaces such as Amazon and Etsy may be responsible for calculating, collecting, and remitting New Mexico Gross Receipts Tax on facilitated sales when they meet marketplace facilitator requirements. Sellers should still confirm how each platform handles tax reporting and what responsibilities remain on their account.

Mobile point of sale: Mobile POS systems like Square rely on GPS to determine sale location. The appropriate tax rate is then determined and applied to the order. Specific tax rules can be set within the system to allow for specific product tax rules.

New Mexico gross receipts tax collection can be automated to make your life much easier. Avalara AvaTax seamlessly integrates with the business systems you already use to deliver gross receipts tax calculations in real time.

Tax-exempt goods

Some sales are deductible or exempt from gross receipts tax under New Mexico law. Examples include durable medical equipment, some medical services, and purchases made with food stamps.

We recommend businesses review the laws and rules put forth by the New Mexico Taxation & Revenue Department to stay up to date on which goods are taxable and which are deductible or exempt, and under what conditions.

Some customers are exempt from paying gross receipts tax under New Mexico law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale.

Businesses must obtain and retain appropriate documentation — such as Non-Taxable Transaction Certificates (NTTCs) or resale certificates — to support deductible or exempt gross receipts. Proper documentation is required to substantiate non-taxable transactions under New Mexico law. 

Misplacing a tax exemption/resale certificate

Non-Taxable Transaction Certificates (NTTCs) and other required documentation are critical under New Mexico Gross Receipts Tax law. If you’re audited and cannot validate an exempt transaction, the New Mexico Taxation and Revenue Department may hold you responsible for the uncollected gross receipts tax. In some cases, late fees and interest will be applied and can result in large, unexpected bills. 

Gross receipts tax holidays

Gross Receipts Tax (GRT) holidays, similar to tax-free weekends, are temporary periods when New Mexico exempts certain qualifying purchases from Gross Receipts Tax. These programs are enacted by the state on a limited, often seasonal basis and apply only to specific items, price thresholds, and dates defined in law.

For 2026, New Mexico held a back-to-school GRT holiday from Friday, July 31 through Sunday, August 2. Eligible items included clothing, laptops, school supplies, and school-related accessories.

You’re registered with the New Mexico Taxation and Revenue Department and you’ve begun conducting taxable business in the state. Remember, Gross Receipts Tax is imposed on your business, and you are responsible for reporting and remitting any tax due. While many businesses choose to pass the tax on to customers, the legal obligation to pay the tax rests with you as the seller.

How to file

Once you have reported taxable gross receipts, you are required to file and remit any tax due to the New Mexico Taxation and Revenue Department by your assigned due date. The TRD then distributes tax revenue according to state and local allocation rules.

Filing a New Mexico Gross Receipts Tax return is generally a two-step process consisting of reporting your gross receipts including any allowable deductions and then remitting any tax due to the New Mexico Taxation and Revenue Department. The filing process requires you to report total gross receipts from business activity in New Mexico, calculate taxable receipts, and determine the tax due based on applicable sourcing rules.

Online filing is generally required, but paper returns are acceptable in limited circumstances.

Filing frequency

The New Mexico Taxation & Revenue Department will assign you a filing frequency. Typically, this is determined by the size or sales volume of your business. State governments generally ask larger businesses to file more frequently. See the filing due dates section for more information.

New Mexico gross receipts tax returns and payments must be remitted at the same time; both have the same due date.

Online filing

You may file directly with the New Mexico TRD by visiting their site and entering your transaction data manually. This is a free service, but preparing New Mexico gross receipts tax returns can be time-consuming — especially for larger sellers.

Using a third party to file returns

To save time and reduce the risk of errors, many businesses outsource Gross Receipts Tax filing to accountants, bookkeepers, or tax automation software like AvaTax. This is a common business practice that can help ensure compliance and reduce mistakes caused by unfamiliarity with New Mexico Gross Receipts Tax rules.

Filing when there are no sales

Once you have a New Mexico seller’s permit, you’re required to file returns at the completion of each assigned collection period regardless of whether any gross receipts tax was collected. When no gross receipts tax was collected, you must file a “zero return.”

Failure to submit a zero return can result in penalties and interest charges.

Closing a business

The New Mexico TRD requires all businesses to “close their books” by filing a final gross receipts tax return. This also holds true for business owners selling or otherwise transferring ownership of their business.

Timely filing discount

Many states encourage the timely or early filing of gross receipts tax returns with a timely filing discount.

The New Mexico TRD does not offer gross receipts tax filers a discount.

It’s important to know the due dates associated with the filing frequency assigned to your business by the New Mexico Taxation and Revenue Department. This way you’ll be prepared and can plan accordingly. Failure to file by the assigned date can lead to late fines and interest charges.

The New Mexico TRD requires all gross receipts tax filing to be completed by the 25th day of the month following the tax period. Below, we’ve grouped New Mexico gross receipts tax filing due dates by filing frequency for your convenience. Due dates falling on a weekend or holiday are adjusted to the following business day.

Filing a New Mexico gross receipts tax return late may result in a late filing penalty as well as interest on any outstanding tax due. For more information, refer to our section on penalties and interest.

In the event a New Mexico gross receipts tax filing deadline was missed due to circumstances beyond your control (e.g., weather, accident), the New Mexico TRD may grant you an extension. However, you may be asked to provide evidence supporting your claim.

Hopefully you won’t need to worry about this section because you’re filing and paying New Mexico Gross Receipts Tax on time and without issue. However, in practice, mistakes can happen. If you miss a filing deadline, it’s important to file your return as soon as possible. Failure to file or pay tax due on time may result in penalties and interest, which generally increases the longer the delay continues.

If you miss a gross receipts tax filing deadline, follow the saying, “better late than never,” and file your return as soon as possible. Failure to file returns and remit collected tax on time may result in penalties and interest charges, and the longer you wait to file, the greater the penalty and the greater the interest.

If you’re in the process of acquiring a business, it’s strongly recommended that you contact the New Mexico TRD and inquire about the current status of the potential acquisition. Once you've purchased the business, you’ll be held responsible for all outstanding New Mexico gross receipts tax liability.

If you are conducting taxable business in New Mexico, you’ll need to consider how shipping and handling charges are treated when calculating Gross Receipts Tax.

Taxable and exempt shipping charges

Gross receipts tax applies to delivery and shipping charges (including postage and transportation charges) in New Mexico, whether separately stated or included in the sale price.

There are exceptions to almost every rule with gross receipts tax, and the same is true for shipping and handling charges. Specific questions on shipping in New Mexico and gross receipts tax should be taken directly to a tax professional familiar with New Mexico tax laws.

For additional information, see the New Mexico Taxation and Revenue Department – Gross Receipts Tax Overview webpage.