New Mexico: The Land of Enchantment

New Mexico is located in the southwest of the United States. The state owes its name to Spanish conquerors who named the area west and north of the Rio Grande. According to ehuacom, New Mexico covers a large area of ​​315,000 km² and is also home to a good two million people. This leads to a very low population density of six inhabitants per square meter. The state, with the capital Santa Fe, is also called the “Land of Enchantment”.

New Mexico exports goods worth more than $5.6 billion annually worldwide. The largest trading partner is Mexico, followed by China and Japan. At $2 billion, computer and electronics products represent the largest category of export products.

New Mexico Location Map

INVITING INFRASTRUCTURE

Over the past four years, the New Mexico Borderplex has experienced significant growth. The established logistics parks with the railroad network in and around Santa Teresa, Interstate 10 and the investments in water and road infrastructure served as catalysts. The ports of Santa Teresa and Columbus serve commercial traffic.

Santa Teresa’s recently expanded port of entry has shorter wait times than neighboring border states, generating a locational advantage. New Mexico offers direct access to the ports of Houston and Long Beach, making it the ideal location. Places deep in Mexico can be efficiently served by rail or truck.

Goods can also be transported by road to the north, as far as Canada, without any problems. Interstate 10 connects to Interstate 25 at Las Cruces, which is a direct route to the Canadian border. Construction of a $400 million intermodal facility on the Sunset Route between El Paso and Los Angeles has been completed.

In 2011, New Mexico established a 6-mile overweight zone around the ports of entry of Santa Teresa and Columbus, which was doubled to a 12-mile radius in 2015. The zone allows trucks entering New Mexico from Mexico to carry nearly 44 tons of cargo even if they have a collapsible load.

MORE THAN JUST LOGISTICS

Improvements in New Mexico’s tax climate have been recognized by Ernst & Young and the Tax Foundation, among others. The state also previously lowered the maximum corporate income tax rate to 5.9%. The adjustments in taxation are one reason why more and more companies from different industries settle in New Mexico. The Tax Foundation now ranks the “Land of Enchantment” 22nd in the national business climate ranking.

Mexico not only has a long tradition in space and aviation, but also has the world’s first commercial spaceport. Spaceport America was built specifically for this purpose and is owned by the State of New Mexico. Virgin Galactic has entered into a 20-year lease to locate its global headquarters at Spaceport America and launch its space tourism program from here.

New Mexico is also well positioned in research, particularly in the area of ​​technology. Three national laboratories, renowned research universities and many non-profit research institutions each provide companies with specialized services.

INCOME TAX IN NEW MEXICO

New Mexico charges an income tax of 1.7 – 5.9% depending on income. In addition, federal income taxes are payable.

CORPORATE INCOME TAX IN NEW MEXICO

New Mexico charges a 5.9% corporate income tax. In addition, federal corporation tax is payable.

NEW MEXICO SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales tax rate in New Mexico

The sales tax in New Mexico is 5.125% at the state level. Municipalities or districts charge an average of 2.7% sales tax. Combined, an average of 7.83% is due.

New Mexico Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date

July 1, 2019

Transactions included:

Total taxable gross receipts from sales, leases and licenses of tangible personal property and sale of licenses and services of licenses to use real estate obtained from the US government

Treatment of tax-exempt transactions:

Exempt Sales and Exempt Services are not included in the threshold

Reason:

Sale only

Sales/Transactions Threshold:

$100,000

Evaluation period:

the threshold applies to the previous calendar year

Extra information:

  • Businesses that meet the Economic Nexus Threshold will be required to collect city and county GRTstarting July 1, 2021, once destination sourcing takes effect.
  • Registration Requirements: New Mexico requires that a remote entity register for New Mexico gross receipts tax by January 1 of the year following the year in which it crossed the Economic Nexus Threshold.
  • New Mexico Tax Law Changes
  • HB6

New Mexico Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

July 1, 2019

Economic Nexus Threshold:

At least US$100,000 in aggregate gross taxable income in New Mexico in the preceding calendar year.

Remote sellers should include sales through a marketplace in the threshold calculation. Marketplace intermediaries include all sales made through the marketplace when calculating the threshold.

Registration requirements:

  • Remote Multichannel Sellers: You must register with the New Mexico Taxation and Revenue Department (TRD) and collect New Mexico Use Tax on sales that are not taxed by a Marketplace Agent once you have crossed the Economic Nexus Threshold.
    • You must report all sales, but you can deduct sales that were taxed by a marketplace intermediary.
  • Remote Marketplace Vendors: You must register with the New Mexico TRD once you have crossed the Economic Nexus Threshold.
    • You can make a deduction for sales on which the tax was collected by a marketplace intermediary.
  • In-State Multichannel Sellers: You must register with the New Mexico TRD and collect tax on sales that are not taxed by a marketplace intermediary.
    • You must report all sales, but you can deduct sales that were taxed by a marketplace intermediary.
  • State Marketplace Sellers: You must register. Contact the New Mexico TRD for more information.
    • You can make a deduction for sales on which the tax was collected by a marketplace intermediary.