New Mexico Gross Receipts Tax Explained: Who Owes It, Who Pays It and How to Register
New Mexico Gross Receipts Tax Explained: Who Owes It, Who Pays It and How to Register
If you sell goods or services in New Mexico, you will deal with the state's gross receipts tax, usually called the new mexico gross receipts tax or NM GRT. New Mexico has no sales tax. Instead, the gross receipts tax is imposed on the business that sells, not on the customer. Many owners only learn how it works when their first filing is due. This guide explains who owes it, how the rate is set, what you may pass along to customers, and how to register for a free Business Tax Identification Number (BTIN) with the Taxation and Revenue Department (TRD).
Disclaimer: This is informational content, not legal or tax advice. Rates, rules and filing requirements can change, and your situation may differ. Confirm current details with TRD and talk with a qualified CPA or attorney before making decisions about your business.
What the gross receipts tax is
The gross receipts tax is a tax on the business's gross receipts, which are the total amounts it takes in from taxable activity. You calculate it, report it and pay it to the state through TRD. Because it is imposed on the business, the buyer does not pay it to the state directly.
Two points matter most when you plan. First, you may pass the tax along to your customer, but you are not required to. Second, if you do pass it along, you must state it separately on the invoice. Either way, the tax is the business's obligation to TRD.
Many people search for nm grt or nm gross receipts tax because they expect a sales tax line on every receipt. New Mexico does not have one. What you will see is a gross receipts tax, and the amount depends on your business location.
Who owes it: what counts as gross receipts
Gross receipts come from several kinds of activity under TRD's overview of the tax:
- Selling property in New Mexico.
- Leasing or licensing property that is used in New Mexico.
- Granting franchise rights.
- Performing services in New Mexico.
- Performing services outside New Mexico when the product of those services is first used in New Mexico.
The last item catches many out-of-state consultants, designers and software vendors. If your firm is based in Texas and writes a report that a client first uses in Santa Fe, the receipts from that work may be taxable in New Mexico even though you did the work elsewhere. Do not assume the work location decides the question. Ask where the product is first used, and confirm the treatment with TRD or a tax professional if the answer is not obvious.
Out-of-state sellers and marketplaces
A seller with no physical presence in New Mexico owes gross receipts tax if it had at least $100,000 of taxable gross receipts in the previous calendar year. This includes marketplace providers. The test looks back at the prior calendar year, so track your New Mexico taxable receipts every year, not just when you first start selling in the state. Confirm with TRD how the test applies to your first year of crossing the threshold.
The rate: state rate plus local rate
The New Mexico state gross receipts tax rate is 4.875%. Counties and municipalities add their own rates, so the combined rate you charge or owe depends on where your business is located. For the schedule effective July 1, 2026 through June 30, 2027, the combined state, county and municipal rates run from 5.25% to 9.4375%.
| Component | Rate or detail |
|---|---|
| State gross receipts tax rate | 4.875% |
| Combined state, county and municipal rate | 5.25% to 9.4375% |
| Schedule in effect | July 1, 2026 through June 30, 2027 |
| When rates change | Only in July |
Rates change only in July. A rate you looked up in the spring may be out of date when the next schedule takes effect, so check the current figure before you set prices or file. The rate follows your business location, not the customer's location, so two shops selling the same product in different cities can owe different amounts.
To find your exact rate, use the TRD Gross Receipts Location Code and Tax Rate Map. It matches your address to a location code and the combined rate that applies there. Keep that location code with your account records so your filings match the location you report.
Who pays it and passing the tax on
The business pays the gross receipts tax. If you decide to pass it on, the tax must appear as its own line on the invoice, not buried inside your price. The separate line lets your customer and your accountant see what was collected and what is owed.
Here is a simple illustration. At a 6.00% combined rate, which falls inside the range above, a $1,000 taxable sale produces $60 of gross receipts tax. If you absorb that $60, your net receipts from the sale are $940 before any other costs. If you pass it on, the invoice shows $1,000 for the sale and $60 for the tax, and you still report and pay the tax to TRD. Your rate and your location will determine the actual figure.
How to register: step by step
- Form your entity first if you need one. If you are forming an LLC, file Articles of Organization with the New Mexico Secretary of State through the SOS Enterprise Business Filing System at enterprise.sos.nm.gov. The filing fee is $50. An LLC files no annual or biennial report with the Secretary of State.
- Get your Business Tax Identification Number (BTIN). The BTIN was formerly called a CRS number. TRD issues it at no charge. You can register in TAP, the department's online taxpayer portal, or on form ACD-31015. An LLC that does business in New Mexico registers with TRD this way and reports gross receipts tax.
- Look up your location code and rate. Use the TRD Gross Receipts Location Code and Tax Rate Map to confirm the code and combined rate for your business address before you set up your account.
- Set up your gross receipts filing in TAP. Confirm the filing schedule TRD assigns to your account in TAP, and record the location code you verified.
- File and pay through TAP. Report your gross receipts and pay the tax through TAP on the schedule assigned to your account. Keep records of each taxable sale, its location and whether any receipts were deductible.
Register before you make your first taxable sale. Waiting until your first filing is due creates avoidable problems, especially for a business that already has customers.
What is not required in New Mexico
Several common assumptions are wrong, and they can lead owners to look for registrations that do not exist:
- No sales tax. The gross receipts tax is the seller's tax. Do not describe it to customers as a sales tax unless your invoice and advice say what it actually is.
- No state general business license. The BTIN is a tax registration, not a license. Activity-specific licenses may be required through the Regulation and Licensing Department, so check whether your trade needs one.
- Possible city or county registration. Some cities and counties charge their own flat annual business registration. The amount and rules vary by locality, so confirm with your city or county clerk.
- No statewide DBA. New Mexico has no statewide DBA or assumed-name registration. An LLC that will trade under a different name states that name in its Articles of Organization.
Corporations face different filings. A corporation files Articles of Incorporation with a $100 filing fee, files a Corporate Report every two years at $25, and owes a $50 annual corporate franchise tax reported on form CIT-1. Those obligations sit alongside the gross receipts tax registration, not in place of it. An LLC taxed as a default pass-through does not owe that corporate franchise tax.
Common mistakes to avoid
- Registering late. Start the BTIN process before your first taxable sale, not after your first return is due.
- Assuming one rate fits the state. The rate follows your business location, and it can differ from one city to the next.
- Ignoring out-of-state work. Services performed outside New Mexico can still create taxable receipts if the product is first used here.
- Passing the tax on without stating it. If you pass the tax along, show it as a separate line on the invoice.
- Forgetting the marketplace and threshold test. Out-of-state sellers should check the $100,000 prior-year figure every year.
Where to get help
Start with the TRD central tax page at tax.newmexico.gov. It links to the rate tools, deduction information, registration steps and sales tax pages. For the registration basics, read TRD's guidance on who must register a business at who must register a business.
If you are a first-time owner, the New Mexico Small Business Development Center offers free advising at nmsbdc.org. Bring your entity type, your location and a list of your services and products. For anything involving multi-state sales, marketplace sales, service firms, pass-through questions or deductions, consult a qualified CPA or attorney. A few hours of professional review usually costs less than correcting a filing that went wrong.
Official resources
- New Mexico Taxation and Revenue Department
- TRD: who must register a business
- New Mexico SOS Enterprise Business Filing System
- New Mexico Secretary of State business services
- New Mexico Small Business Development Center
Disclaimer: This article is informational content, not legal or tax advice. Verify current rates, location codes, thresholds and filing requirements with the Taxation and Revenue Department before you act, and consult a qualified professional for your specific situation.