State Income Taxes in New Mexico
The state of New Mexico has 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.
State Business & Franchise Taxes in New Mexico
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.
Sales and Property Taxes in New Mexico
Sales taxes – 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. New Mexico also has a 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.
Property Taxes in New Mexico – 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.
Payroll Taxes in New Mexico
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:
- Wage Base – New Mexico has a wage base of $24,800 for 2020
- UI Rates – range from 0.33% to 6.40%
- Schedules – New Mexico has a single rate schedule regarding UI.
New Mexico Business Entities – LLCs
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:
- New Mexico has no annual LLC fee, yay!
- When you register with the state, you pay a one time fee of $50
- Secretary of State of New Mexico website –click here