New Mexico Tax

FULL List to New Mexico Tax Forms

Individual Income Tax Forms

Form RPD-41071 Application for Refund

Form PIT-1 Personal Income Tax

Form PIT-X Personal Income Tax Amended Return

Corporate Income Tax Forms

Form CIT-1 Corporate Income and Franchise Tax Return

Form S-Corp S Corporate Income and Franchise Tax Return

Property Tax Forms

Form RPD-41343 Claim for Abandoned Property

Primary Concerns:

As with many states facing the current economic climate, New Mexico has been faced with a sizable budget shortfall due to falling tax revenues (valued in 2010 at around a $650 million shortfall). New Mexico is faced with a tenuous position in regards to trying to address this shortfall. If you need legal advice and assistance, contact New Mexico lawyers.

The state has the largest population of people living at or near the poverty line in the country, around 19% of the total state population. Combined with this fact is an unemployment rate that is actually below the national average, between 8 and 9%. This means that many New Mexicans are working, but working for not a great deal of money. Therefore, the government of New Mexico is well aware that adding additional personal taxes and regressive taxes directly to taxpayers would be a very bad idea.

To this end, attempts to place a food tax back into action in early 2010 (after being repealed in 2005), was vetoed at the executive level, though a $0.75 tax hike on cigarettes was implemented. To avoid further regressive taxation, the New Mexico legislature has tried to pass new surtaxes onto business and corporations.

Tax bills that have tried to be passed, but were shot down due largely to corporate lobbying, have included insurance surtaxes on certain policies and premiums. Many point out that even if these taxes do pass, that they will ultimately be passed on to the consumer anyway just as the Gross Receipts tax is (The sales tax in New Mexico itself is actually a Gross Receipts tax, which is actually placed upon businesses, who pass it on to the tax payer).

To account for current shortfalls, the government has tried to earmark and reallocate funds that were intended for particular groups and programs, many of them in the field of education. This has caused significant controversy statewide, since many school districts are already facing insolvency due to budget deficits.

The state has also implemented mandated furloughs of state employees, of up to four days a month in some situations. Though New Mexico has at present passed a new budget, there are many concerned that it is predicated precariously on tax revenue that may not be generated, and has cost too high a price for many necessary programs.

Income Taxes:

All individuals or estates drawing income from New Mexico or inside New Mexico, who are either permanent or part time residents, must pay an income tax on income earned. New Mexico income taxes work on a progressive rate over a staggered bracket.

Any income for marrying individuals filing separately under $4,000 has a tax rate of 1.7%. Over $4,000 up to $8,000, there is a flat tax of $68.00 plus 3.2% of all excess over $4,000. What this means is if the total income of a married individual filing separately is $6,000, the $68.00 represents 1.7% of $4,000, and the additional $2,000 would be taxed at a rate of 3.2%, which means it would be $64. The total taxes in this case would then be $132.

Between $8,000 and $12,000 it will be $196 plus 4.7% of excess over the base of $8,000. Over $12,000 it is $384 plus 5.7% of excess over $12,000.

For married individuals filing joint returns or widowed spouses, everything in the previous category is doubled, save for the rate of income in excess. Therefore the first bracket is $8,000 (instead of $4,000) or less but still has a tax rate of 1.7%. The next rate is between $8,000 and $16,000 and is $136 (double $68) plus 3.2% and so on.

For single individuals, estates, and trusts, anything up until $5,500 is 1.7%. Between $5,500 and $11,000 is $93.50 plus 3.2% of excess over the base of $5,500. The next bracket is between $11,000 and $16,000, which is $269.50 plus 4.7% of excess over the base. The final bracket for single individuals is over $16,000 which has a base tax of $504.50 plus 5.7% over the base.

For individuals filing as the head of household, incomes $7,000 and under are again, 1.7%. Between $7,000 and $14,000 is a flat tax of $119 plus 3.2% over the base. At the next bracket, the base is $14,000 with the ceiling of $20,000 with a flat tax of $343 plus 4.7% of excess over the base. The final bracket is over $20,000, which is a flat $625 plus 5.7% of excess over $20,000.

It may be apparent that though New Mexico has a progressive scale in terms of its income taxes, the brackets in every category tops out at the maximum of $24,000. This is because New Mexico has the highest poverty level in the nation, and is presently the 43rd state in the country in terms of average per capita income.

Corporate Income Taxes:

Corporate income taxes in New Mexico are assessed on three progressive brackets of income, which are staggered. Any income for amounts over $0 is 4.8%. Income above $500,000 is 6.4%, but only on income over $500,000 (the first $500,000 is still charged at 4.8%). Above $1 Million is charged at a 7.6%. These income taxes are applicable to all businesses operating in the state, whether incorporated or not.

Property Taxes:

All real estate in New Mexico is generally subjected to property tax, which is based on the taxable value of a property. Taxable value of property in New Mexico is generally one third of the assessed market value of a property, and can be reduced by certain deductions. The tax rate for residential property is around 2.657%, while for commercial property it is around 2.980%.

Personal items of property are not subjected to taxation, but commercial items that are claimed by businesses for depreciation can be subjected to property tax.

Sales Taxes:

New Mexico does not have a sales tax per se...what it features instead is what is called a Gross Receipts Tax. A Gross Receipts Tax is a tax placed upon the receipts of sales from vendors and service providers, which the vendor generally passes on the customer as an added sales charge. Though it appears like a sales tax to the average consumer, the responsibility to pay the tax is entirely on the vendor.

Numerous goods and products are taxable under the Gross Receipts tax, save for unprepared foods (groceries) and prescription drugs. Unlike other states, many individual services are also covered by the Gross Receipts Tax.

The tax can vary within state drastically between 5.375% and 8.675%, with the larger amounts representing a combination of state, county, and municipal taxes. All Gross Receipts Taxes are paid to the state, which then pays the counties and cities their share. The Gross Receipts Tax can be altered by the state legislature each January and July based on state budget necessity.

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