A sort of tax that is levied on the purchase of products and services is sales tax. The merchant collects it at the time of sale and adds a percentage to the overall cost of the good or service. For states and municipal governments, sales tax is a vital source of funding, and New Mexico is no exception.
Depending on where the sale takes place, New Mexico has different sales tax rates. Sales taxes are levied by the state at a rate of 5.125% and by local governments at a rate of up to 4.9375%. Accordingly, the total sales tax rate in some parts of New Mexico can reach a maximum of 9.0625 percent.
New Mexico issues a Type 9 NTTC (Non-Taxable Transaction Certificate) to make things simpler for businesses. With the use of this certificate, approved enterprises can buy products tax-free for resale. Businesses must be operating a business that involves the resale of tangible personal property and have a valid New Mexico Tax ID number in order to qualify for a Type 9 NTTC.
Businesses in New Mexico must acquire a resale certificate in addition to the Type 9 NTTC. This certificate is needed for enterprises to be exempt from paying sales tax on purchases made for resale and is used to record sales of products intended for that purpose.
A tax known as the Gross Receipts Tax (GRT), which is similar to a sales tax but levied on the seller rather than the buyer, is also in place in New Mexico. The GRT rate might range from 5.125% to 8.6875%, depending on the sale’s location. The GRT is assessed against the company’s gross revenues, which are comprised of all sales, service, and other business-related revenue.
It is crucial to remember that New Mexico is an origin-based state as well. This indicates that the location of the seller, not the buyer, determines the sales tax rate. The sales tax rate will be determined by the tax rate in Albuquerque, for instance, if a company in Albuquerque sells something to a customer in Santa Fe.
In conclusion, it is critical for companies doing business in New Mexico to comprehend the state’s sales tax regulations. Businesses can prevent fines and assure compliance with state and municipal legislation by getting the required certificates and correctly collecting and remitting sales tax.
The income tax rate in New Mexico ranges from 1.7% to 4.9%, depending on the taxpayer’s income. The state also has a progressive tax system, which means that people with higher incomes pay more in taxes. Additionally, there are no local income taxes in New Mexico.