New Mexico's State and Local Tax Burden Below Average

New Mexico’s state and local tax burden percentage has ranked among the nation’s lowest, currently estimated at 8.4% of income (41st nationally), below the current national average of 9.8%.

NM taxation chart


New Mexico Property Taxes: Among the Nation's Lowest

New Mexico is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. New Mexico’s localities collected $574 per capita in property taxes in fiscal year 2009, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, New Mexico collected $32 per capita in property taxes during FY 2009, making its combined state/local property taxes $606 per capita, ranking 47th lowest nationally.

Local Property Tax Rate in Mills (2012) Residential Non-Residential
City of Gallup 33.172 41.756
McKinley County 26.020 32.389

New Mexico's Corporate Income Tax System

New Mexico’s corporate tax structure consists of three brackets, with a top rate of 7.6% kicking in at $1,000,000 of net income. Among states levying corporate income taxes, this top tax rate ranks New Mexico 21st nationally. In 2010, state-level corporate tax collections (excluding local taxes) were $61 per capita, which ranked 40th highest nationally.

New Mexico's Individual Income Tax System

New Mexico’s personal income tax system consists of four brackets and a top rate of 4.9% kicking in at an income level of $16,000. Among state levying personal income taxes, New Mexico’s top rate is 38th highest nationally. New Mexico’s 2010 state-level individual income tax collections were $466 per person, which ranked 38th highest nationally.

New Mexico's Gross Receipts Tax

The gross receipts tax rate vaires throughout the state from 5.125% to 8.6875% depending on the location of the business. It varies because the total rate combines rates imposed by the state, counties, and, if applicable, municipalities where the businesses are located. Although the gross receipts tax is imposed on businesses, it is common for a business to pass the gross receipts tax on to the purchaser either by seperately stating it on the invoice or by combining the tax with the selling price.

The business pays the total gross receipts tax to the state, which is then distributes the counties' and municipalities' portions to them. The tax is on the businesses' gross receipts. Whether the receipts (net of returns and allowances) are taxable depends on whether the business can take advantage of an exemption or deduction.

Local Sales Tax  
City of Gallup 8.3125%
McKinley County 6.75%

New Mexico's Unemployment Insurance Contribution

A new employer in New Mexico starts out with UI tax rate of 2.0% kicking in at $22,400 and remains at that rate for a minimum of four years. After four years, each employer is given an experience rating which can cause a rate to increase or decrease.

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