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New Mexico Consumer Tax Laws

Even if no one likes paying taxes, to have a functioning society with everything from public school teachers to police, almost everyone must pay taxes. In addition to personal income taxes and property taxes, individuals in New Mexico must pay a variety of other consumer taxes. These taxes can be general taxes to raise money, like sales or use taxes, or “vice” taxes on things like alcohol, cigarettes, and gas that raise money and also try to deter individuals from buying those times.

Who Pays Consumer Taxes?

Pretty much everyone does. One of least successful arguments against undocumented persons or “illegal aliens” in the U.S. is that they don’t pay taxes. However, as you can see form all of the taxes below, if someone is living in New Mexico, they’re probably paying taxes most days.

The following chart lists and explains the main consumer tax laws in New Mexico.

Sales Tax The state sales tax or “gross receipts” tax is 5.125%, but is as much as 8.6875% with additional county and city sales taxes in some locations. Not that online purchases may not be taxed, if the seller has no connection to the state, such as Amazon.
Use tax The state “compensating tax” covers items that would’ve been taxed under the sales or gross receipts tax, but weren’t because they were bought out of state or acquired some other way where they weren’t initially taxed. This is also called a usage tax or excise tax. The rate is 5.125% on certain property used in New Mexico and 5% on certain services used in New Mexico.
Gas Tax New Mexico’s gas tax is imposed on gas distributors, the current rate is $.17 per gallon.
Liquor Tax The liquor tax rate varies based on the type of alcohol being taxed, as follows:
  • Beer and cider is taxed at $.41 per gallon
  • Wine is taxed $.45 per liter
  • Fortified wine is taxed $1.50 per liter
  • Spirits are taxed at $1.60 per liter

New Mexico gives a tax break to smaller, local alcohol producers. Local microbrewers are taxed at $.08 per gallon for the first 10,000 barrels and $.28 per gallon for 10,000 to 15,000 barrels. Small winegrowers in the state are taxed:

  • $.10 per liter for the first 80,000 liters
  • $.20 per liter on 80,000 to 950,000 liters
  • $.30 per liter for 950,000 liters to 1,500,000 liters
Cigarette Tax Cigarettes are taxed $1.66 per pack of 5, 10, or 20 cigarettes or $2.075 for packs of 25. The cigarette tax funds go to the University of New Mexico medical school cancer center, to the finance authority for various activities including rural county cancer treatment, and to the general fund.
Gambling Tax Gaming is taxed at different rates based on whether the operator is a non-profit organization (10% tax) or other licensed operator (26%). Racetracks pay 20% of the net take to purses for the race track. For more information, see the New Mexico Gambling Laws article.

Getting Help with Taxes

Tax law is quite complicated. If you have questions about what you should be paying and whether you’re eligible for a tax exemption or credit, it’s best to talk with a tax expert, especially if you’re accused of tax evasion. To learn more, speak to your local experienced tax lawyer.

Note: State laws change regularly, so please conduct your own legal research or contact a lawyer to confirm the accuracy of these tax laws.

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