New Mexico Sales Tax License

The short answer is technically, no. While you may see most other states utilize a sales tax, New Mexico actually has what is called a gross receipts tax on many transactions. And there is a difference between the two.

Sales tax is a charge sellers add on top of the selling price (and is based on that amount). So, in effect, this is not an expense for the seller because that owed tax amount is passed onto and paid by the consumer. The final price the consumer pays is the selling price + the sales tax. Meanwhile, the seller reports that sales tax amount and remits it.

Gross receipts tax, on the other hand, is a percentage of revenue that a seller must pay the state. It is not required that a seller collect this amount from its buyers, and ultimately this tax amount is paid out of the seller’s earnings. In most cases, the seller will pass this amount onto the consumer, whether in the selling price or stated separately.

So, while the two are different, the similarity between them is their overall impact on the consumer. That is to say that the consumer typically pays the tax amount in one way or another.

How to Register for a New Mexico Gross Receipts Tax License

If you operate a business in the state of New Mexico, you’ll need to register with the New Mexico Taxation and Revenue Department in order to receive your Combined Reporting System (CRS) number. This is the number that you’ll use to report collected gross receipts tax.

You have the option of registering either online at the Tax and Revenue Department website or by mail with a paper application. Note that online applications are typically processed faster. To register your business, the form you must submit is ACD-31015 Business Tax Registration.

To successfully complete your registration form, you’ll need to provide the following information:

  • Personal Identification Information (including SSN, address, and more)
  • Business Identification Information (including EIN/FEIN, address, and more)
  • Business Entity Type
  • Primary Business Type
  • Start of Business Date in New Mexico
  • Accounting Method Used (cash or accrual)

How to Know Which Goods and Services Are Taxable

As we cover the process for obtaining your gross receipts tax license, it’s also important to understand which goods and services are taxable in the state of New Mexico. The current New Mexico state gross receipts tax rate is 5.125%.

Traditional goods like property, cars, furniture, appliances, etc. are subject to the gross receipts tax. Meanwhile, there are some tax-exempt goods, such as gasoline, groceries, and prescription medications.

When it comes to services that are performed, the state of New Mexico requires that gross receipts tax be paid on all services. The gross receipts tax also applies to any and all digital goods and services, such as an album download or movie stream.

Filing Your New Mexico Gross Receipts Tax Return

Once you have registered with the Tax and Revenue Department and begun charging gross receipts tax, you will need to begin filing tax returns. It’s important that you keep up with these filings in order to avoid late penalties and fines.

Knowing how often you must submit a gross receipts tax return is determined by the amount of gross receipts tax your business collects. The general rule in New Mexico is the following:

Semi-Annual Filing: You will file on a semi-annual basis if your business collects less than $1,200 in gross receipts tax within a 6-month period.

Quarterly Filing: You will file on a quarterly basis if your business collects less than $200 in gross receipts tax per month.

Monthly Filing: You will file on a monthly basis if your business collects more than $200 in gross receipts tax per month.

Seasonal Filing: Seasonal filings apply to businesses that operate only during a specific time of year. In this case, you will need to indicate which months you are filing for and then file for those months on a monthly basis.

Temporary Filing: Temporary filings are typically for one-time filing scenarios. You will need to list a start and end date. And note that there is a 6-month maximum in this case.

Depending on which filing type applies to your New Mexico business, here are the corresponding filing deadlines that your business must adhere to:

Semi-Annual Filings:
Months covering January – June: Due date is July 25
Months covering July – December: Due date is January 25

Quarterly Filings:
Quarter 1 (January – March): Due date is April 25
Quarter 2 (April – June): Due date is July 25
Quarter 3 (July – September): Due date is October 25
Quarter 4 (October – December): Due date is January 25

Monthly Filings:
If filing monthly, the due date is the 25th of the following month (or next business day). For example, if filing for the month of January, the due date is February 25th.

Note that there are late penalties for missing a filing deadline. The state of New Mexico charges 2% per month of the tax reported on your return until that tax is filed (maximum of 20% of tax reported can be charged). Additionally, there is an annual 4% interest rate assessed (or, 0.33% monthly) for any unpaid tax amount.

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