Quick facts:
-New Mexico is one of the cheapest states to set up an LLC.
-New Mexico charges sales tax on services as well as retail products.
The state of New Mexico does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale whose range is from 1.70% to 4.90% for 2020.
New Mexico’s corporate tax is calculated on a marginal scale whose range is from 4.8% to 5.9% for 2020. They only have 2 tax brackets, the highest bracket starting at $500,000.
In addition to the corporate tax, New Mexico also has a franchise tax. The franchise tax is a separate annual $50 fee applied to both C Corporations and S Corporations.
Like many states, New Mexico has multiple tax rates. One at the state level and another at the local level. The state rate is 5.125% the average local rate is 2.69% (total average rate for New Mexico Sales Tax is 7.82%). This is high for a combined rate.
Broad Sales Tax Base: Similar to Hawaii, North Dakota, and South Dakota, the State of New Mexico has increased its sales tax base to include many business-to-business personal services.
The average property tax rate for residential property in the state of New Mexico is 0.68%, making it a very preferable place to own property. The property tax here is ranked as the 4th lowest per capita with average tax collections of only $792.
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
Nex Mexico is the most inexpensive place to set up your LLC in the country (tied with Arizona and Missouri). Here’s what you need to know:
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