Do You Need to Get a Sales Tax Permit in New Mexico?
Quick Answer: Sales tax in New Mexico is referred to as “Gross Receipts Tax.” You will need to apply for a gross receipts tax permit in New Mexico and receive a Combined Reporting System (CRS) ID number if you meet economic or physical nexus requirements. Read on for more detailed information.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus” (called Gross Receipt Tax in New Mexico). In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, an economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have gross receipts tax nexus in New Mexico, your next step is to register for a gross receipts tax permit in the state. Check out our blog post on getting a gross receipts tax permit in New Mexico for more information about that process. If you are not interested in doing the work of getting the permit yourself, TaxValet can handle the permit registration for you with our Sales Tax Permit Registration service.
Common Ways to Have Sales Tax Nexus in New Mexico
1. Economic nexus in New Mexico
If you made $100,000 of sales in New Mexico in the previous calendar year, then you are required to register for, collect, and pay gross receipts tax to the state. If you meet this threshold, it does not matter if you have a physical presence in New Mexico. Nexus has been created based on your volume of sales.
For more information, please see New Mexico HRTC/HB6/a Section 25.
If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.
2. Physical presence nexus in New Mexico
The following creates physical presence nexus in New Mexico. If you have any of the following in New Mexico, you will need to get a gross receipts tax permit:
- A business location in New Mexico;
- Property stored in New Mexico;
- Employing any person in New Mexico;
- Contracting with a salesperson or other agent in New Mexico;
- Leasing equipment used in New Mexico;
- Performing services in New Mexico;
- Licensing the use of intangible property in New Mexico, or transporting property in New Mexico using the taxpayer’s vehicles.
For more information, please see the New Mexico Taxation & Revenue Department-Gross Receipts Tax Nexus.
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
Free State Audit Risk Guide
See which states pose the greatest risk to your business.
State-by-State Audit Risk Percentages
Do You Need a Sales Tax Permit in New Mexico If You Only Sell on Marketplaces?
New Mexico is a marketplace collection state and all sales on approved marketplace channels (Amazon, eBay, etc) will have the gross receipts tax remitted to the state by the marketplace. However, if you meet any of the economic nexus or physical nexus requirements above, you are still required to get a New Mexico gross receipts tax permit and remit returns.
For more information see HB 0579, Section 7-1-14.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, feel free to check out our Sales Tax Starter Kit service.
Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.