Tax Laws in New Mexico.

Graduated rates from 1.7% to 5.9%. New Mexico partially conforms to the federal IRC.

New Mexico's distinctive gross-receipts tax replaces traditional sales tax. Imposed on gross receipts from business activity (including many services exempt in other states). 4.875% state rate (2025) + local add-ons; combined rates 5.5% to 8.9%. Passes through to consumers in most business models.

4.8% on first $500K of NM taxable income; 5.9% above. Single-sales-factor apportionment available.

Residential property assessed at one-third of market value. Relatively low effective rates by national comparison. Annual reassessment with limited valuation increases.

Major revenue sources for New Mexico given the state's substantial oil and gas production (Permian Basin in southeastern NM, San Juan Basin in northwestern NM). Severance taxes and emergency school taxes produce significant state revenue.