State taxes: New Mexico

New Mexico collects a state income tax across 4 brackets ranging from 1.7% to a top rate of 4.9%. More on New Mexico taxes can be found in the tabbed pages below.

Personal income tax

The Land of Enchantment uses a 4-bracket graduated rate table.

For single taxpayers, the rates are:

• 1.7% on the first $5,500 of taxable income.
• 3.2% on taxable income between $5,501 and $11,000.
• 4.7% on taxable income between $11,001 and $16,000.
• 4.9% on taxable income of $16,001 and above.

For married couples filing a joint return and heads of household, taxes are levied at:

• 1.7% on the first $8,000 of taxable income.
• 3.2% on taxable income between $8,001 and $16,000.
• 4.7% on taxable income between $16,001 and $24,000.
• 4.9% on taxable income of $24,001 and above.

New Mexico’s personal income tax “piggybacks” on federal returns, using the federal adjusted gross income as its base. New Mexico used the same dollar amounts as the IRS for personal exemptions, standard deductions and itemized deductions.

New Mexico tax returns are due April 15 or the next business day if that date falls on a weekend or holiday.

Sales taxes

New Mexico’s gross receipts tax (what most of us call sales tax) went up to 5.125%, effective July 1, 2010.

The combined gross receipts tax rate varies throughout the state, and in some jurisdictions is more than 8%. The total rate is a combination of all rates imposed by the state, counties and municipalities.

Personal and real property taxes

In general, taxes are not assessed on personal property. Personal household effects, licensed vehicles, registered aircraft, certain personal property warehoused in the state and business personal property that is not depreciated for federal income tax purposes are exempt from the property tax.

Real property tax rates vary substantially and depend on the type of property and its location.

New Mexico’s property tax division helps local governments in the administration and collection of ad valorem, or property, taxes, which constitute a large portion of the annual budgets for local governments and schools.

Residents age 65 or older as of the 1st of the year and who meet income thresholds may be eligible for a valuation limitation. This means the current assessed value of your property cannot be raised as long as you qualify for the limitation. You must file an application each year to qualify.

Inheritance and estate taxes

New Mexico has no inheritance tax, but an inheritance may be reflected in a taxpayer’s modified gross income and taxed that way.

Due to the phaseout of the state credit on federal estate taxes, New Mexico does not impose an estate tax on decedents who died after Jan. 1, 2005.

Other New Mexico tax facts

New Mexico taxpayers are able to complete a variety of tax tasks electronically.

The state maintains a public list of delinquent taxpayers. People who wish to report noncompliant taxpayers can call the New Mexico Audit and Compliance Division toll-free hotline at (866) 457-6789.

For more information, visit the New Mexico Taxation and Revenue Department website.

To download tax forms on this site, you will need to install a free copy of Adobe Acrobat Reader. Click here for instructions.