New Mexico Business Taxes at a Glance
New Mexico does not have a sales tax in the usual sense. It has a gross receipts tax (GRT), imposed on businesses for the privilege of doing business in the state, and it applies to most services as well as goods. Since 2021, most receipts are sourced to where the customer receives the goods or services. New Mexico also has a personal income tax, oil and gas taxes that fund much of the state budget, and some payroll fees found nowhere else. BOMCAS helps New Mexico businesses and individuals manage these rules.
How the Gross Receipts Tax Works
The GRT is a tax on a business's gross receipts from selling goods, leasing property, and performing services in New Mexico. It is imposed on the seller, though most businesses pass it on to customers. Because it applies to services, professional service firms, contractors, and consultants owe GRT on their receipts unless an exemption or deduction applies.
The rate combines a state rate with local rates set by counties and municipalities. Since July 2021, most sales are sourced to the location where the customer receives the goods or the product of the service, rather than the seller's location. Services performed outside New Mexico but delivered to New Mexico customers can now be subject to GRT.
We help businesses register, determine the correct location codes, apply deductions, and file returns.
Nontaxable Transaction Certificates
Many GRT deductions, such as sales for resale and certain sales to manufacturers, require the buyer to give the seller a nontaxable transaction certificate (NTTC). Without a valid NTTC on file, the seller may owe the tax. Businesses that buy for resale must obtain NTTCs from the Taxation and Revenue Department and provide them to vendors. We help businesses get NTTCs, collect them from customers, and keep the records needed for audits.
Compensating Tax
New Mexico's compensating tax is the counterpart to GRT for goods and certain services bought from out-of-state sellers without GRT. It is similar to use tax in other states. Businesses that buy equipment or services from outside New Mexico should review their purchases for compensating tax. We check purchases during bookkeeping and report it on the return.
Federal and Tribal Customers
New Mexico has many federal facilities and is home to Pueblos, Nations, and Tribes. Receipts from selling tangible goods to the federal government are generally deductible from GRT with the right documentation, while many services sold to federal agencies remain taxable. Some sales to tribes or tribal members within their own lands may be exempt under specific conditions. Contractors and vendors working with these customers need clear records for each contract. We help them apply the rules and document each deduction.
Personal Income Tax
New Mexico taxes residents on all income and nonresidents on New Mexico-source income, using graduated brackets that were revised beginning in 2025. New Mexico also offers a deduction for a portion of capital gains and an exemption for Social Security benefits below income thresholds. We prepare New Mexico returns and handle part-year and nonresident filings.
Corporate Income Tax and Pass-Throughs
A corporation with nexus in New Mexico apportions its income and pays New Mexico corporate income tax on its share. Partnerships and S corporations file New Mexico returns and withhold on nonresident owners. New Mexico has an optional entity-level tax for partnerships and S corporations. We prepare the entity returns and model whether the election helps the owners.
Oil and Gas Taxes in the Permian Basin
Southeastern New Mexico is part of the Permian Basin, one of the largest oil-producing regions in the country. Oil and gas production in New Mexico is subject to several taxes, including severance tax, conservation tax, emergency school tax, and an ad valorem production tax. Operators and purchasers report them, and royalty and working interest owners see deductions on their statements.
For small operators, royalty owners, and oilfield service companies, we provide:
- Bookkeeping that tracks production revenue and taxes by well
- GRT on oilfield services sourced to well locations
- Depletion and depreciation schedules for federal returns
- Records for nonresident owners
Film, Technology, and Federal Labs
New Mexico's film production credit has attracted productions to Albuquerque and Santa Fe, and federal laboratories in Los Alamos and Albuquerque support contractors and technology firms. These businesses need cost tracking, GRT on services sourced to customers, and payroll for skilled workforces. We provide bookkeeping and tax support for production companies, vendors, and contractors.
Retiring in New Mexico
New Mexico exempts Social Security benefits for most retirees, with income limits that depend on filing status, and offers deductions for some other retirement income and medical care expenses for older taxpayers. Retirees moving to Santa Fe, Albuquerque, or Las Cruces file part-year returns in the year they arrive. We apply the exemptions correctly.
Payroll and the Workers' Compensation Fee
New Mexico employers withhold state income tax and report unemployment insurance to the Department of Workforce Solutions. Employers also pay a workers' compensation fee per covered employee each quarter. New Mexico requires paid sick leave for most employees. We run payroll, file reports, and reconcile them to the books.
Books Organized by Customer Location
New Mexico bookkeeping should track receipts by customer location for GRT, NTTCs received and issued, and purchases subject to compensating tax. Our bookkeeping is set up so these figures come straight from the ledger at filing time.
Contact BOMCAS About New Mexico
Service firms sourcing receipts to customer locations, contractors working for federal or tribal customers, and royalty owners in the Permian Basin can contact BOMCAS for a remote review. Local pages for New Mexico cities and services are planned under this section. Visit the BOMCAS home page or our United States services. This page is general information only.
Talk to BOMCAS About Your New Mexico Taxes
Have a question about your New Mexico filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.