State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

Brought to you by:

New-Mexico (NM)

NM Sales Tax - Name of Tax and General Application:

New Mexico imposes a tax on the privilege of doing business in the state. This tax is called a "sales tax" or "excise tax". In addition there is a tax imposed on the privilege of using tangible personal property in the state. This tax is known as a "use tax" and only applies where sales tax has not already been paid.

NM Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

New Mexico imposes nexus when a business (1) has employees or agents working in the state, (2) owns real property, or tangible or intangible (including the licensing of software, trademark) personal property, (3) when it holds a license issued in New Mexico, or (4) when it advertises via direct mail, local publications, or television.

NM Local Tax - Do Localities Impose Tax?

Yes, New Mexico imposes local gross receipts tax.

NM Resale Certificate Renewal Agreements:

New Mexico uses a nontaxable transaction certificate which allows the seller to deduct resale receipts from gross receipts. The tangible personal property or services purchased for resale must be resold by the purchaser during the course of regular business.

NM Resale Certificate Renewal Periods

No expiration period is specified.

NM Statute of Limitations

Three years from the end of the calendar year in which the tax payment was due. If taxes are underreported by more than 25%, the limitation period is six years from the end of the calendar year in which the tax payment was due.