New Mexico Gross Receipts Tax and Invoicing Rules for 2026

TL;DR: New Mexico imposes a gross receipts tax (GRT) instead of a traditional sales tax. The state rate is 5.0% with local additions pushing combined rates to roughly 7% to 9%. Remote sellers exceeding $100,000 in sales must collect. Nearly all services are taxable, making GRT broader than a typical sales tax.

New Mexico's gross receipts tax is fundamentally different from a traditional sales tax, creating unique invoicing and compliance considerations. The tax is on the seller rather than the buyer, services are broadly taxable, and the "tax on tax" pyramiding effect means the effective rate is slightly higher than it appears. This guide covers New Mexico's GRT rates, nexus rules, invoice requirements, deductions, filing deadlines, and penalties for 2026.

State gross receipts tax rate

New Mexico does not have a traditional "sales tax." Instead, it imposes a gross receipts tax (GRT) on the seller, which is measured by gross receipts from selling property or services in the state. The state GRT rate is 5.0%, and municipalities and counties impose additional local GRT increments. Combined rates typically range from 7.0% to 9.0% depending on location. Albuquerque's combined rate is approximately 7.875%, and Santa Fe is around 8.4375%.

Importantly, GRT is legally imposed on the seller, not the buyer, though sellers routinely pass the cost to buyers. This distinction has practical implications for how the tax appears on invoices and how the "tax on tax" pyramiding effect works.

Nexus rules

Physical nexus exists if you have a place of business, employees, agents, or property in New Mexico. Storing inventory in New Mexico warehouses or fulfillment centers also creates nexus.

Economic nexus applies to remote sellers with $100,000 or more in gross receipts from sales into New Mexico. There is no separate transaction count threshold. Marketplace facilitators with economic nexus must collect and remit GRT on behalf of third-party sellers. New Mexico processes registrations through the Taxation and Revenue Department portal.

What must appear on invoices

Because GRT is imposed on the seller rather than the buyer, New Mexico does not technically require sellers to separately state the tax on invoices. However, sellers commonly pass the GRT to buyers and the state permits this practice. Invoices should include:

• Seller's name, address, and New Mexico CRS identification number
• Buyer's name and address
• Date of transaction
• Description of goods or services provided
• Price for each item or service
• GRT amount if passed through to the buyer (labeled as "gross receipts tax" or "GRT")
• Applicable combined rate for the transaction location
• Total amount due
• Nontaxable transaction certificate (NTTC) number for deductible transactions

If you pass GRT to the buyer, it should be clearly labeled. Since GRT is on the seller, the passed-through amount is itself part of gross receipts and technically also subject to GRT, creating a slight "tax on tax" pyramiding effect.

Exemptions and special cases

New Mexico calls its exemptions "deductions" from gross receipts rather than "exemptions." Key deductions include:

• Sales of groceries (food for home consumption) are deductible from GRT
• Prescription drugs and certain medical services
• Sales to federal and state government agencies
• Manufacturing consumables used in the manufacturing process
• Agricultural products sold by the producer
• Interstate commerce (goods shipped out of state are deductible)
• Receipts from certain healthcare services provided by licensed practitioners

Since GRT applies to nearly all services, New Mexico has a much broader tax base than typical sales tax states. Professional services, construction, consulting, legal, accounting, and repair services are all subject to GRT unless specifically deducted. Clothing is taxable. Digital products and SaaS are generally subject to GRT. Buyers claiming a deduction must provide a Nontaxable Transaction Certificate (NTTC) to the seller.

Filing frequency and deadlines

New Mexico requires electronic filing through Taxpayer Access Point (TAP). Businesses must also file a compensating tax return for use tax on items purchased out of state for use in New Mexico. There is no vendor discount for timely filing. Returns are required for every period even if no tax is due.

Penalties for non-compliance

A penalty of 2% per month of unpaid tax applies for late payment, up to a maximum of 20%. A $25 per return penalty applies for late filing. Interest accrues at the statutory rate set annually by the Taxation and Revenue Department. Failure to register and collect when required results in assessment of back taxes for the full period of non-compliance. Fraud penalties of 50% of the tax due may apply for willful evasion.

Frequently asked questions

What is the difference between gross receipts tax and sales tax? GRT is legally imposed on the seller based on total gross receipts, while a traditional sales tax is imposed on the buyer and collected by the seller as an agent. In practice, sellers typically pass the GRT cost to buyers, making it function similarly to a sales tax. However, because GRT is on the seller, the passed-through tax amount is itself taxable, creating a slight "pyramiding" effect that makes the effective rate marginally higher than the stated rate.

Are services taxable in New Mexico? Yes. Nearly all services are subject to GRT unless a specific statutory deduction applies. This includes professional services, consulting, construction, repair, legal, accounting, and most other service categories. New Mexico has one of the broadest service tax bases in the US, which is a key difference from most other states.

Are groceries taxable in New Mexico? No. Sales of food for home consumption are deductible from gross receipts, effectively making groceries exempt from GRT. Prepared food, restaurant meals, and catering remain fully subject to GRT at the applicable combined rate.

How do I register for a New Mexico CRS number? Register through the Taxation and Revenue Department website or by filing form ACD-31015. You will receive a Combined Reporting System (CRS) identification number that serves as your business tax ID for GRT, withholding, and other state tax purposes. Registration is free and can be completed online.