Unlike many states that require businesses to collect a tax on products sold (referred to as a sales tax), New Mexico imposes the state’s Gross Receipts Tax (GRT) that must be collected on the sale of products AND services. Sell advice or IT services, even if you don’t sell a tangible product? New Mexico’s GRT must be added to the amount your client will pay.

Compounding the confusion is “destination sourcing,” which stipulates the effective tax rate based on where the products or services are delivered, and the “compensating tax” that applies to out-of-state transactions. It’s the perfect storm of confusion for many new business owners, even those who have had companies in other states.

In 2025, New Mexico’s GRT rates range from 4.875% to 8.9375%, depending on where the product or service is delivered. Rates differ because the total rate for any location is comprised of the sum of individual rates imposed by the state, counties, municipalities, and special taxing districts. Rates can change as often as twice a year — in January and July — as mandated by state statute.

For example, GRT changed statewide in July 2022 after the legislature reduced the state rate. But a change in the Silver City municipal rate that same year meant the change was not uniform, and businesses that delivered products or services to Silver City experienced a different rate change.

In 2021, the state moved to “destination sourcing,” and most businesses are now required to charge the tax rate in effect at the location where their product or service is delivered. The result is that New Mexico businesses that deliver services or ship products to multiple locations in the state are responsible for reporting a myriad of different rates and collections — more than 100 if the business delivers to every taxing district in the state.

Organizations such as WESST and the New Mexico Small Business Development Center Network offer workshops and consulting to help business owners navigate New Mexico’s tax requirements, including those related to GRT. Other economic development organizations collaborate to bring these workshops to participants in person and online, often providing additional business resources.

New Mexico Manufacturing Extension Partnership is collaborating with the SBDC in Farmington on June 12, 2025, to offer a workshop that addresses GRT and other business taxes. Register here.

Unable to attend? Read the GRT overview on the NM Tax & Revenue website, and find a New Mexico GRT workshop or Zoom recording here. Specific questions? Schedule an appointment with the department.