New Mexico

Sales Tax

  • Statewide: 5.0% (If gross receipts don't reach certain threshold, tax rate can increase to 5.125%)
  • Counties can levy an additional sales tax of no more than 8.938%.
  • Current average sales tax (with local taxes included): 7.26%
  • Common Exceptions at State Level:
    • Groceries: Exempt
    • Prescription Medicine: Exempt
    • Vehicle Tax: 4%
  • Gasoline Tax: 37.28 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 47.28 cents/gallon (Includes all state, local, and federal taxes)
  • New Mexico doesn't have a sales tax, per se; its “gross receipts tax” is imposed on businesses, but is almost always passed on the buyer.

 

Personal Income Tax

  • Personal Income Tax Rate Range: Five brackets from 1.7% to 5.9% (highest bracket on income greater than $210,000)
  • Standard deduction: Same as federal. Single filing Status: $13,850
  • Personal Exemption Allowance: $4,150 for all but one dependent
  • Itemized Deductions Allowed?: Yes, subject to limitations
  • Retirement Income
    • Social Security: Exempt but with a cap of $100,000 ($150,000 if married filing jointly)
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Taxable at ordinary income tax rates*
  • Military Pay
    • Active Duty Pay: Exempt
    • Military Retirement Pay: Up to $20,000 exempt for tax year 2023, $30,000 for tax years 2024-26.*
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Taxable at ordinary income tax rates*
Income Tax Comments: *A retirement income exemption of $8,000 is available, subject to income restrictions, for taxpayers 65 and over. Additional exemptions and credits for seniors are available based on income restrictions or high medical expenses. If a taxpayer is over 100 and not a dependent, there are no income taxes due. All taxpayers may be eligible for a tax credit equal to 10% of the federal earned income tax credit, and low- and middle-income taxpayers may receive an income exemption up to $2,500 if income less than $36,667; $55,000 if married filing jointly.

 

Property Tax

  • Local municipalities average .80% of the property's assessed value.
  • Calculation of assessed value: One-third of fair market value
  • Relief programs for:
    • Owner-occupied: Assessed value may not increase more than 3% annually.
    • Head of Family: Up to $2,000 of assessed value exempt.
    • 65 and over: If income less than $16,000, tax credit of up to $250. May be eligible for deferral based on certain requirements.
    • Veterans/Surviving Spouse: Exemption of up to $4,000 of assessed value if meet certain requirements.
    • Disabled Veterans/Surviving Spouse: 100% tax credit if 100% service-linked disability.
  • Personal Property Tax: No.

 

Inheritance & Estate Taxes: None. 

 

Department of Revenue website: www.tax.newmexico.gov

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