New Mexico Lodgers' Tax: Rates, Who Collects It and How It Differs From GRT
New Mexico Lodgers' Tax: Rates, Who Collects It and How It Differs From GRT
If you rent rooms, a casita, or a whole house to paying guests in New Mexico, two taxes can appear on the same booking: the gross receipts tax (GRT) and, in many places, a local lodgers' tax. Most people searching for the new mexico lodging tax expect one statewide number. There isn't one. New Mexico does not collect a lodging tax at the state level. Each city, and each county for its unincorporated areas, decides by ordinance whether to charge a lodgers' tax. The rate is whatever that ordinance sets, within a cap in state law.
Disclaimer: This guide is informational content, not legal or tax advice. Lodgers' tax ordinances, rates, and filing offices change, so confirm current details with the local finance office and with the New Mexico Taxation and Revenue Department (TRD) before you start collecting. For entity choice or a tax question about a specific property, talk to a qualified attorney or CPA.
The Short Answer
- No statewide lodging tax. New Mexico has no sales tax and no state-collected lodging tax.
- A local rate, capped at 5%. A city, or a county for unincorporated areas, can impose a lodgers' tax by ordinance. State law caps the rate at 5% of gross taxable rent.
- The vendor pays and collects. The business furnishing the lodging is the taxed party, and it collects the tax from the guest.
- It is separate from GRT. Gross receipts tax still applies to lodging receipts, and you report it to TRD under your Business Tax Identification Number (BTIN).
What the Lodgers' Tax Act Allows
The Lodgers' Tax Act (NMSA 3-38-13 and following sections) lets a municipality impose a local occupancy tax by ordinance. A county can do the same for unincorporated areas. The statute caps the rate at 5% of gross taxable rent. The cap is a ceiling, not a rate. Each ordinance sets the actual percentage, which is why two neighboring towns can charge different amounts.
The act also requires that a share of the proceeds go to advertising and promoting tourist facilities. That is the practical purpose of the tax: local governments use it to fund tourism promotion. As a host, you collect the tax, but the ordinance decides what counts as taxable rent and how the money is spent. Read the ordinance itself rather than relying on a summary, including any online vendor guide.
Here is how the cap works in practice. If the ordinance applies a 5% rate to a $200 room night and treats the room charge as taxable rent, the lodgers' tax is $10 for that night. If the ordinance treats cleaning or other guest fees as taxable rent, the amount grows. The math is simple. The taxable base is the question, and only the ordinance and the finance office can answer it for your property.
Lodgers' Tax Rates: What Is Confirmed and What to Check
There is no state rate table. Treat the entries below as starting points, and confirm each one with the local finance office before you set prices.
| Place | Lodgers' tax rate | What to confirm |
|---|---|---|
| Las Cruces | 5% | Current ordinance, taxable base, and the filing office at the city finance office |
| Taos | 5% | Current ordinance, taxable base, and the filing office at the local finance office |
| Albuquerque | 5% lodgers' tax plus a 1% hospitality fee on stays of up to 29 nights | Confirm these figures with the City of Albuquerque Treasury before you set your rate. |
| All other cities and counties | Set by local ordinance, up to the 5% cap | Whether a tax applies at your address, the rate, and which office takes the return |
Albuquerque is the place where a single rate is most likely to mislead you. The hospitality fee is a separate 1% charge on top of the 5% lodgers' tax. Confirm how the 29-night breakpoint applies to your stays, because a host who rents for longer periods may be treated differently from one who rents by the night. If both charges apply to the same base, a $200 night would carry $10 in lodgers' tax and $2 in hospitality fee. Confirm that math with the city before you publish a rate.
Who Collects the Tax and Who Sends It In
The lodgers' tax applies to the business that furnishes the lodging. That covers:
- Hotels and motels
- Bed and breakfasts
- Short-term rental hosts, including people who list one room or one house on a booking platform
Booking platforms such as Airbnb may collect the tax for some cities. Do not assume that covers you. Ask two questions: which cities the platform collects in, and what it does not collect. Then confirm your own registration and filing duties with the local office. A platform's collection in one city may not settle your obligation in another, and it may not settle your reporting duty even where it does collect.
The return usually goes to a local office, but which office varies. Some cities and counties take the return at the city or county finance office, and that office may differ from the TRD office where you file GRT. Before your first booking, ask the finance office which office takes your return, what form it uses, and how often you file.
How the Lodgers' Tax Differs From Gross Receipts Tax
People mix these two taxes up because both can apply to the same check. The table lays out the differences.
| Feature | Lodgers' tax | Gross receipts tax (GRT) |
|---|---|---|
| Who sets the rate | City or county ordinance | State law sets the state rate, and local governments add their own |
| Who is taxed | The business furnishing the lodging, which collects from the guest | The seller, on gross receipts. New Mexico has no sales tax. |
| Rate | Local, capped at 5% of gross taxable rent | State rate of 4.875%. Combined state and local rates run from 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027. |
| Where it is reported | The local office the city or county names (confirm) | TRD, under your BTIN |
| Registration | Local, through the city or county (confirm) | BTIN from TRD, which is free |
Lodging receipts are subject to GRT, and the lodgers' tax is an additional local tax. Do not treat the lodgers' tax as a replacement for GRT, and do not assume one return covers both. Track the two separately from your first booking. Because the combined GRT rate depends on where the property sits, look up the rate for your address on the TRD website before you set prices.
Setting Up a Lodging Business in New Mexico
- Choose and form the entity. An LLC files Articles of Organization with the Secretary of State for $50 through the SOS Enterprise Business Filing System. An LLC files no annual or biennial report. A corporation pays a $100 filing fee, owes a $50 annual corporate franchise tax, and files a biennial report at $25, with the first report due within 30 days after the certificate of incorporation is issued. An LLC taxed as a default pass-through does not owe the corporate franchise tax.
- Check your name. An LLC name must contain "limited liability company," "limited company," or an abbreviation such as LLC or L.L.C. If you will trade under a different name, state that name in the articles of organization. New Mexico has no statewide DBA or assumed-name registration for these entities. Search existing names in the Secretary of State business search.
- Get a BTIN from TRD. The Business Tax Identification Number is free. It is a tax registration, not a business license, and it is how you report GRT. Start at the TRD business registration page.
- Register locally. New Mexico issues no statewide business license, but cities and some counties require their own local business registration, and some charge a flat annual fee. Confirm the amount and the deadline with your city or county before you open.
- Set up lodgers' tax with the right office. Ask the city or county finance office whether a lodgers' tax applies at your address, what the rate is, which return form to use, and when returns are due.
- Decide what is taxable rent. Read the ordinance to see whether cleaning fees, pet fees, or other guest charges count toward the taxable base. Price each stay with the tax in mind.
Common Mistakes to Avoid
- Assuming a statewide rate. There isn't one, and your local rate may be lower than 5%.
- Treating the lodgers' tax and GRT as the same tax, or assuming one return covers both.
- Assuming the booking platform has handled the lodgers' tax in your city.
- Sending the lodgers' tax return to the wrong office, because the office varies by place.
- Skipping local business registration because you already have a BTIN.
- Setting a nightly rate before you know what counts as taxable rent.
Questions to Confirm With the Agencies
- City or county finance office: Does a lodgers' tax apply at my address? What is the current rate and ordinance? Which office receives the return, and how often do I file?
- City of Albuquerque Treasury: If my property is in Albuquerque, how does the 1% hospitality fee apply, and how does the 29-night breakpoint apply to my stays?
- Taxation and Revenue Department: What GRT rate applies at my address, and how do I register for my BTIN? Visit tax.newmexico.gov.
- Secretary of State: Is my entity name available, and does it meet the naming rules for the articles? Visit sos.nm.gov business services.
When to Get Professional Help
A single property in a place with a clear, local ordinance is usually manageable with the agency checks above. Several properties, an LLC that holds multiple rentals, or a property where the platform collects part of the tax and you collect the rest calls for advice from a qualified attorney or CPA. The New Mexico Small Business Development Center can help you work through the business side before you open. This guide is informational content, not legal or tax advice.