State Taxes at a Glance – New Mexico
| Type of Tax | 2023 |
|---|
| Individual Rates | 1.70% to 5.90% |
| Corporate / Business Tax Rates | 4.80% to 5.90% |
| Gross Receipts Tax | None |
| Sales Tax | 7.72% (average) |
| Property Taxes | 0.66% as a percentage of primary home |
| Estate or Inheritance Tax | None |
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 5.90%.
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%. 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 5.00% the average local rate is 2.72% (total average rate for New Mexico Sales Tax is 7.72%). You should take note that groceries in New Mexico are not subject to sales tax.
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 0.66%, 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.
New Mexico DMV fees
New Mexico’s annual DMV fees are based on weight, and not the value of the vehicle. Therefore, they are not deductible on your Federal Tax Return. If you would like to learn more about New Mexico’s DMV fees, here is a link.
However, there is a 4% excise sales tax on the sale of all automobiles in New Mexico. This excise sales tax is deductible.
New Mexico Domicile
If you maintain a permanent place of abode for over 185 days, you are considered a New Mexico resident.
New Mexico Tax on Social Security Benefits
New Mexico is one of the few states in the union that taxes Social Security Benefits. However, there are exemptions under certain cases. In you are exempt from tax if you’re:
- Married filing jointly and you make less than $150,000
- Single and you make less than $100,000
All others must partially pay tax on social security benefits.
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 $30,100
- 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
New Mexico Tax Contact Phone Numbers
Important phone numbers for the New Mexico Department of Taxation:
- Website: www.tax.newmexico.gov
- Phone# for Individuals – (866) 285-2996
- Phone# for Businesses – Same