New Mexico State Taxes: A Simple Guide

🌶️New Mexico state income tax

New Mexico taxes personal income using its own brackets and definitions, separate from federal law. In general:

• •Residents above certain income thresholds must file a New Mexico income tax return.
• •Nonresidents may need to file if they earn New Mexico–source income.
• •New Mexico's taxable income, deductions, and credits differ from federal rules.

A typical resident files a federal Form 1040 plus a New Mexico return if they meet filing requirements.

🛒Gross Receipts Tax (GRT)

Instead of a traditional sales tax, New Mexico has a Gross Receipts Tax (GRT) that is imposed on businesses for the privilege of doing business in the state. It often looks like a sales tax added to customer bills.

• •GRT applies to many sales of goods and services, often with local add-ons.
• •Businesses usually pass the cost of GRT on to customers as an extra percentage on receipts.

Note: This guide focuses on individuals; if you operate a business, you'll need to understand New Mexico's GRT registration and filing rules.

🏡Property taxes

Property taxes in New Mexico are imposed by counties, municipalities, and school districts, based on assessed property values (such as homes and land).

• •Homeowners receive property tax bills from their county.
• •Property taxes help fund schools, roads, and local government services.
• •Some homeowners may qualify for exemptions or relief, often based on residency or age.

🔗Putting New Mexico taxes together

A typical New Mexico resident may see:

• •Federal income tax (Form 1040)
• •New Mexico state income tax
• •Gross Receipts Tax passed through on many purchases (instead of a traditional sales tax)
• •Local property taxes if they own a home

Once you understand how filing works, it's easier to see how New Mexico's income and GRT structure fits into your overall tax picture.