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1. What is taxable?

Generally speaking, sales and leases of goods and other property, both tangible and intangible, are taxable. Magazines and over-the-counter drugs are taxable. Unlike many other states, sales and performances of services are taxable in New Mexico.

Not Taxable

Prescription drugs are no longer taxable.

2. What is the gross receipts tax rate and how is it determined?

The gross receipts tax rate varies throughout the state from 5.375% to 8.6875%. The total rate is a combination of rates imposed by:

• The counties
• The municipalities
• The state

Process

The total gross receipts tax is paid to the state. The state keeps its portion and distributes the counties’ and municipalities’ portions to them. The state’s portion of the gross receipts tax, which is also the largest portion, is determined by state law. Changes may occur, usually in July as the result of legislative action. Changes to municipal and county increments also become effective in January and July of every year.