If you’re doing business in New Mexico, there’s one important tax to know about: the Gross Receipts Tax (GRT). Unlike many states, New Mexico doesn’t have a traditional sales tax. Instead, businesses pay GRT on most goods and services sold, and in many cases, you can pass that tax directly on to your customers. This guide will walk you through what you need to know, from rates and exemptions to registration, filing, and payment, so you can stay compliant and keep your business running smoothly.
Does New Mexico have sales tax?
New Mexico does not have a traditional state sales tax. Instead, the state imposes a Gross Receipts Tax, a system that functions differently from the sales tax models used in most other states.
Similar to Delaware’s sales tax, which also relies on a gross receipts framework rather than a retail sales tax, New Mexico’s GRT is levied on businesses, not customers. However, unlike Delaware (where the tax is generally not shown to consumers), New Mexico businesses often pass the GRT through to customers as a line item on receipts. This can make it feel like a sales tax, even though legally it’s a tax on the seller’s total receipts.
What is the New Mexico sales tax rate?
New Mexico doesn’t have a traditional sales tax, but the state’s gross receipts tax often gets referred to as a sales tax rate because most businesses pass it through to customers at checkout. So if you’re searching for “New Mexico sales tax,” you’re really looking for the combined state and local GRT rate.
The statewide GRT rate for New Mexico is 5%. However, local jurisdictions add their own GRT increments, which means the total rate varies significantly depending on the city, county, and even special districts. In some areas, the combined rate can exceed 8%. For example:
- Albuquerque – Local rate is 2.3125%, making the total GRT 7.3125%
- Santa Fe – Local rate is 3.3125%, making the total GRT 8.3125%
- Las Cruces – Local rate is 2.4375%, making the total GRT 7.4375%
- Farmington – Local rate is 2.0%, making the total GRT 7.0%
Rates vary widely, even between neighboring areas, so businesses should always verify the exact rate that applies to their location or delivery point. You can confirm current rates using the New Mexico Taxation & Revenue Department’s GRT rate lookup tool, which provides the most accurate and up-to-date information.
Who must pay New Mexico gross receipts tax?
In New Mexico, nearly any person or business engaged in selling goods or services within the state is required to pay gross receipts tax. Instead of taxing the buyer like a traditional sales tax, New Mexico taxes the seller’s receipts from doing business in the state.
You must pay GRT if you:
- Sell goods or services in New Mexico, whether at a physical storefront, online, or through mobile/temporary locations.
- Provide services, including professional, digital, creative, construction, restaurant, and hospitality services.
- Lease or license property, including equipment rentals, licensing tangible goods, or granting rights to use property.
- Operate as a contractor or subcontractor, including construction, repair, or installation work performed in the state.
- Sell digital products or electronically delivered services to New Mexico customers.
- Receive revenue from activities performed in New Mexico, even if your business is based elsewhere.
If your business benefits from customers or business activity in New Mexico, those receipts are generally subject to GRT unless a specific exemption applies.
New Mexico’s Taxation & Revenue Department (TRD) provides detailed rules and location-specific rates, and businesses are encouraged to verify whether their activities fall under GRT requirements.
How to calculate gross receipts tax in New Mexico?
Calculating GRT is simple once you know your location’s combined rate. New Mexico applies a statewide base rate of 5.0%, and each city, county, or special district can add its own local rate on top. The combined total is the rate you’ll use to calculate how much tax you owe.
To calculate GRT:
- Find your combined rate (state + local).
- Multiply your taxable gross receipts by the combined rate.
Formula:
Taxable Gross Receipts × Combined GRT Rate = GRT Due
Here are a few example calculations using real local rates and assuming a business earns $10,000 in taxable receipts:
- Albuquerque – Combined rate is 7.3125%
$10,000 x 0.073125 = $731.25 GRT due - Santa Fe – Combined rate: 8.3125%
$10,000 × 0.083125 = $831.25 GRT due - Las Cruces – Combined rate: 7.4375%
$10,000 × 0.074375 = $743.75 GRT due
- Farmington – Combined rate: 7.0%
$10,000 × 0.07 = $700.00 GRT due
Use a reverse sales calculator for New Mexico GRT
Even though New Mexico doesn’t have a traditional sales tax, many businesses still need a method to get the pre-tax amount when they’ve advertised a “tax-included” price or want to verify that the correct GRT portion is accounted for. That’s where a reverse sales tax calculator becomes especially useful.
This is especially valuable for businesses that commonly advertise tax-included pricing, such as restaurants, food trucks, retail shops, salons, and more. Because GRT varies widely by location, and because many customers think of GRT as “sales tax”, the reverse calculator below helps you quickly determine the pre-tax amount of the sale.
What is exempt from New Mexico gross receipts tax?
New Mexico offers many GRT exemptions, but most fall into a few key categories. Common exemptions include:
- Agriculture & livestock: Sales of livestock, unprocessed agricultural products, and services like feeding or pasturing animals.
- Government entities: Receipts of federal, state, tribal, and certain local governments, plus qualifying sales made on tribal land.
- Nonprofits & organizations: Certain receipts of 501(c)(3) and 501(c)(6) groups, membership dues for social or professional organizations, homeowners’ association fees used for maintaining common areas, and some nonprofit hospital receipts (local GRT only).
- Fuel, oil & natural resources: Fuel on which excise tax has been paid, certain oil and gas sales for resale or out-of-state use, and transactions covered by other specialized tax programs.
- Industry-specific exemptions: Occasional sales, interstate and mobile telecommunications, qualifying research and development done out of state, racetrack winnings, school event officiating, textbook sales by eligible college bookstores, and vehicle or boat sales already subject to their own excise taxes.
Because exemptions can be highly specific and industry-dependent, businesses should check the New Mexico Taxation and Revenue Department for full details and guidance.
Does New Mexico charge sales tax on food
New Mexico does not apply gross receipts tax to most groceries purchased for home consumption, but the exemption isn’t automatic for all food.
Under state law, qualifying grocery items sold by a certified “retail food store” receive a GRT deduction, which effectively removes the tax. This generally includes everyday groceries like produce, dairy, meats, and pantry staples.
However, some food-related sales are still taxable, including:
- Prepared or ready-to-eat foods (restaurant meals, hot deli items, etc.)
- Food sold by businesses that do not meet the definition of a “retail food store”
- Delivery fees, service fees, and non-food items in a grocery order
- Catering and similar services
So while New Mexico doesn’t impose “sales tax” on home-consumed groceries, many food purchases, especially anything prepared or consumed immediately, still incur GRT.
Because of this, restaurants and retailers often handle high volumes of taxable transactions, especially when GRT is passed through to the customer at checkout.
That’s where DAVO by Avalara can help. DAVO automatically collects and sets aside GRT from every sale, ensuring your records stay accurate and your payments stay on time, even during your busiest hours. For restaurants and retailers with heavy point-of-sale activity, DAVO makes staying compliant with New Mexico’s GRT requirements simple and stress-free.
How to manage sales tax exemptions in New Mexico?
In New Mexico, legal responsibility for gross receipts tax falls on sellers and lessors. While you may pass GRT on to your customers, certain transactions are exempt, but only if you have the proper documentation.
A Nontaxable Transaction Certificate (NTTC) from the Taxation and Revenue Department allows you to deduct receipts from qualifying transactions. You only need one NTTC per customer for all transactions of the same type. If your customer provides a properly executed NTTC, you should not pass the GRT on to them for qualifying sales.
The NTTC serves as conclusive evidence that the transaction can be deducted from your gross receipts, provided you accept it in good faith. In some cases, alternative documentation may be used to claim deductions under the Gross Receipts and Compensating Tax Act, except for certain deductions that specifically require a type of NTTC.
Using NTTCs correctly ensures your business stays compliant while avoiding overcharging or underreporting GRT. For more details, visit the New Mexico Taxation and Revenue website on non-taxable transaction certificates.
New Mexico sales tax holiday
The annual New Mexico sales tax holiday, often referred to as the back-to-school tax-free holiday, is a great opportunity for shoppers to save, especially families with school-age children. During this weekend, the state suspends the collection of gross receipt tax on qualifying items, allowing retailers to sell certain products tax-free. Many merchants also absorb the tax on additional items, giving shoppers extra savings.
The tax holiday generally runs from the last Friday of July to the following Sunday. You should always refer to the Taxation and Revenue website for the latest tax-free holiday dates. Items that qualify during this period include:
- Clothing and shoes under $100 per item
- Desktop, laptop, tablets, or notebook computers under $1,000 per item
- Computer hardware under $500 per item
- School supplies for general-education classrooms under $30 per item
Businesses should remember not to charge or pass through the gross receipt tax onto their customers for qualifying items.
How to get a sales tax license in New Mexico?
If you plan to operate a business in New Mexico, you must register with the New Mexico Taxation and Revenue Department. The state defines “engaging in business” broadly, essentially any activity done for direct or indirect benefit. This includes remote sellers and marketplace providers who had $100,000 or more in taxable gross receipts sourced to New Mexico in the previous calendar year.
When you register, the state will issue you a New Mexico Business Tax Identification Number. This includes a unique state tax ID for gross receipts tax and any other applicable taxes. You’ll need this ID before you can begin collecting and remitting GRT.
How to Apply
The easiest way to register is online through the TRD website:
- Select “Apply for a New Mexico Business Tax ID” and follow the on-screen steps.
- Once approved, you can log in with the credentials you created during the application.
If your business entity is not a sole proprietor and does not have employees, you must first obtain a Federal Employer Identification Number (FEIN) from the IRS before registering with New Mexico.
There is no fee to register for a New Mexico Business Tax Identification Number.
Other Ways to Register
If you prefer not to apply online, you can:
- Submit form ACD-31015 at a district tax office (appointment required), or
- Mail the application where processing times vary.
Registration forms are also available at many city, village, and town halls throughout the state.
Make your sales tax less taxing with DAVO.
How to file gross receipts tax in New Mexico?
New Mexico businesses can file gross receipts tax through the state’s Taxpayer Access Point (TAP). Filing online is the quickest and most reliable way to stay compliant. The system is built to guide you through each step and reduce filing errors. Once logged in to your TAP account, you can:
- Enter your gross receipts for the reporting period
- Apply any eligible deductions, including those supported by NTTCs
- Report receipts under the correct location code
- Review and submit the return electronically
The online filing system provides immediate confirmation, giving you peace of mind that your return has been successfully submitted.
Paper filing is still available for businesses that qualify. You can submit Form TRD-41413 by mail or deliver it to a district tax office.
Electronic filing and payment mandate
If your business had an average monthly GRT liability of $1,000 or more during the previous calendar year, you are required to file and pay electronically. If you’re unable to file electronically, you must request an exception or waiver from the New Mexico Taxation and Revenue Department. Without an approved waiver, paper filing is not permitted.
Be sure to keep a copy of your completed return, whether filed electronically or on paper, for your records. New Mexico’s Taxation and Revenue Department may request documentation to verify deductions or sourcing information.
How to pay gross receipts tax in New Mexico?
Once you’ve filed your gross receipts tax return, the next step is submitting your payment. You can submit your payment electronically through the Taxpayer Access Point or by using one of New Mexico’s approved payment methods.
You can make your payment through the TAP using one of the following methods:
- Electronic Check (E-Check)
Authorize the state to debit your checking account for the amount you owe. There is no additional fee for this option. - Credit or Debit Card
New Mexico accepts Visa, MasterCard, and American Express. A 2.40% convenience fee applies, based on the transaction amount.
After submitting your payment, you’ll receive an online confirmation so you know your payment was received on time.
A friendly reminder for businesses that average $1,000 or more in monthly GRT liability during the prior calendar year are required to pay electronically. If you cannot pay electronically, you must request an exception or waiver from the Taxation and Revenue Department.
Paying by mail
If you choose to mail your payment instead of paying electronically:
- Include a check or money order (payable to New Mexico Taxation and Revenue Department).
- Include the GRT-PV Payment Voucher directly behind your payment.
- Place both items at the front of your return, in this exact order:
1) Payment (check or money order)
2) GRT-PV Payment Voucher
When paying by check or money order, always write your tax ID and the correct filing period on your payment so the Department can apply it accurately.
To download the payment voucher:
Go to the Department’s website and select Forms & Publications. You’ll then want to select Business Taxes and then Gross Receipts Tax. From this selection, you’ll find the GRT-PV Gross Receipts Tax Payment Voucher to download and print.
While mail is accepted, New Mexico strongly encourages electronic payments because they are faster, more secure, and reduce processing delays.
What are New Mexico sales tax due dates?
New Mexico requires businesses to file and pay gross receipts tax on a regular schedule, which is assigned when you register your business. Your filing frequency, monthly, quarterly, or semiannual, depends on the total taxable gross receipts you report.
Filing Frequencies
- Monthly: Most common for businesses with steady or higher sales volume.
Due date: 25th day of the month following the reporting period.
Example: January GRT is due February 25. - Quarterly: Assigned to businesses with moderate sales volume.
Due dates:
- Q1 (Jan–Mar): April 25
- Q2 (Apr–Jun): July 25
- Q3 (Jul–Sep): October 25
- Q4 (Oct–Dec): January 25
- Semiannual: Given to businesses with low activity.
Due dates:
- First Half (Jan–Jun): July 25
- Second Half (Jul–Dec): January 25
If a due date falls on a weekend or holiday, the state will generally consider the next business day as on time.
While many states reward businesses with a vendor discount for paying sales tax on time, New Mexico doesn’t offer one. That said, the state does allow deductions for certain types of sales, which can help reduce your tax liability. If your business operates in multiple states, check out our State Sales Tax Discount Guide to see where you could be saving. With DAVO, this collection allowance is returned to the business in full, sometimes covering the full subscription cost to DAVO.
New Mexico sales tax late penalty
If you file late or don’t pay your gross receipts tax on time, New Mexico applies a penalty to encourage timely compliance. The penalty is 2% of the tax due per month or partial month that your return or payment is late, up to a maximum of 20%. There’s also a minimum penalty of $5, even if no tax is owed.
Interest also accrues on any unpaid tax starting from the due date. This is a legal charge for the use of money and cannot be waived. The interest rate can change, so it’s best to check the latest rates on the New Mexico Taxation and Revenue Department website.
How DAVO can help with New Mexico gross receipts tax
Managing gross receipts tax can be tricky, especially if you’re running a restaurant, retail store, or any business with high point-of-sale volume. DAVO makes it simple by collecting and submitting your GRT on time, every time, guaranteed. And if your business operates across state lines, DAVO can help you stay compliant not only with New Mexico gross receipts tax but also with sales tax in other states, so you can focus on running your business with confidence.
Choose your POS system to get started with DAVO.
New Mexico Tax & Revenue Information:
https://www.tax.newmexico.gov/
1-866-285-2996
