Performing business activities in New Mexico means working with a taxation system that does not comply with the standard sales tax model. Instead of a traditional retail sales tax, this state enforces a gross receipts tax (GRT)—a broad tax on the total revenue earned from sales of goods and services: New Mexico sales tax. No matter if you are running a shop in Albuquerque or shipping orders to NM customers from another state, the New Mexico gross receipts tax might apply to your business.
In addition, compensating tax in New Mexico can apply once you purchase goods or services from out-of-state vendors without paying the proper taxation fee. This makes acknowledging your responsibilities even more critical—particularly if you are a remote seller or operate across state lines.
At Dimov Tax, we present guidance to businesses through their NM sales tax nexus evaluation, help with NM TRD CRS filing, and support compliance at every stage. We are ready to make sure you understand what is required so you can prevent costly taxation issues down the road.
How New Mexico’s Gross Receipts Tax (GRT) Works
As it was indicated above, unlike standard sales tax models in other states, New Mexico sales tax is structured as a gross receipts tax. In other words, businesses are taxed on their total revenue—not just retail transactions. This covers income from the sale of goods and services as well as digital products.
- Statewide NM GRT rate: 5.125%
- Local add-ons: City and county surtaxes may raise the total rate significantly, sometimes above 9%
- Examples:
- Albuquerque: Approximately 7.875%
- Santa Fe and Las Cruces: Vary in line with local jurisdictions
In the case of a business buying items from out-of-state vendors without tax included, such a business may also owe compensating tax in New Mexico, which makes sure of fair treatment between in-state and out-of-state transactions.
Who Has to Collect GRT?
If the business has a nexus in the state, this business is required to collect and remit New Mexico gross receipts tax. Nexus means a connection significant enough to create a tax obligation, and it can be established in a few different ways, as detailed below:
- Physical presence: Operating a storefront, warehouse, or office in New Mexico, or having employees, contractors, or inventory located in the state
- Economic presence: Earning more than $100,000 in annual gross receipts from NM customers or completing over 200 separate transactions within a year
- Marketplace facilitators: In case of selling through platforms like Amazon, they may collect on your behalf, but you are still responsible for monitoring your NM sales tax nexus and filing it
What Transactions Are Taxable?
In accordance with the New Mexico gross receipts tax, many different types of business activity are subject to tax—even those that would not be taxed in other states. If you are collecting income in the state, it is vital to recognize what counts.
The New Mexico sales tax system generally applies to the below elements:
- Tangible goods sold in-store or shipped to NM customers
- Professional and digital services, covering consulting and design along with software subscriptions
- Leases of equipment orproperty, and bundled transactions that combine services and goods
- Shipping fees, if they are part of the taxable sale
Getting Started: Registering for NM GRT
In order to collect and remit New Mexico gross receipts tax, you must first register with the New Mexico Taxation and Revenue Department (TRD) through their Combined Reporting System (CRS). The process is straightforward but should be fulfilled before you begin filing. The process can be summarized as below:
- Create a business profile on the NM Taxpayer Access Point (TAP) portal
- Submit the federal EIN, business address, and a short description of your business activities
- Once approved, you will receive a CRS identification number, which is required for NM TRD CRS filing
This setup is fundamental for handling both New Mexico sales tax and compensating tax obligations, in parallel to how and where the business operates.
Filing and Paying: What You Need to Know
Once you are registered, the New Mexico Taxation and Revenue Department (TRD) will assign the filing frequency in line with total gross receipts. This applies to both the New Mexico gross receipts tax and, if applicable, the compensating tax in New Mexico.
- Monthly: For businesses with higher or more consistent sales
- Quarterly: Mid-size filers with moderate activity
- Annually: Typically for low-volume or seasonal operations
All returns are submitted through the NM TRD CRS filing portal.
Tips That Save Time and Trouble
Keeping up with New Mexico sales tax obligations does not necessitate constant attention—just the right systems and habits. These practices can lend a helping hand in staying ahead of potential issues and remaining in good standing:
- Automate rate tracking and filing to account for changes in the NM GRT rate at the city and county levels
- Keep exemption certificates current and monitor any sales to tax-exempt entities
- Maintain detailed records of gross receipts, particularly if you provide services or mixed transactions
- Check regularly for jurisdiction updates and announcements from the New Mexico Taxation and Revenue Department
Avoid These Common Mistakes
Even businesses that handle New Mexico sales tax regularly might run into trouble by overlooking major points. These are some of the most frequent issues we observe—and help resolve:
- Misclassifying taxable services or digital products, which may result in underreporting
- Failing to remit compensating tax in New Mexico on purchases from out-of-state vendors
- Allowing exemption certificates to expire or using them without proper verification
- Overlooking local rate differences when making remote or online sales across multiple NM jurisdictions
How Dimov Tax Can Help
No matter if you operate locally or sell to customers across the U.S., our team at Dimov Tax is ready to support your compliance with New Mexico sales tax and surrounding obligations. Our services can be outlined as below:
- Evaluate the NM sales tax nexus to determine whether you should collect New Mexico gross receipts tax
- Assistance with NM TRD CRS filing, covering account registration and portal setup
- Prepare and file both GRT and compensating tax in New Mexico returns
- Present complete documentation for audit defense and resolve back-tax issues
- Smart multi-state sales tax planning for remote sellers expanding into new markets
Recap and Next Steps
Getting fully compliant with New Mexico gross receipts tax starts with the basics: identifying nexus, registering through NM TRD CRS filing, and submitting accurate returns—on time.
At Dimov Tax, we present professional support in managing your New Mexico sales tax responsibilities from registration to filing. If you are looking for clarity or hands-on support, our team is ready to assist.
Contact us today to schedule a personalized compliance review with one of our sales tax specialists.
FAQs
- What is the gross receipts tax rate in New Mexico?
- Do out-of-state sellers need to collect New Mexico GRT?
- How does compensating tax work in New Mexico?
- What services are taxable under NM GRT?
- How often must businesses file NM gross receipts tax returns?