The New Mexico Taxation and Revenue Department (TRD) and the New Mexico Economic Development Department (EDD) will hold a webinar on Wednesday, June 23, to assist businesses with transitioning to the new source-based gross receipts tax system and revised reporting website brought about by statutory changes that take effect on July 1, 2021. On that date, businesses will begin charging state, local, and special-district taxes based on the rates in effect where their goods or services are delivered.

Many businesses, such as retail establishments that sell and deliver tangible goods to buyers within their brick-and-mortar store, will not see a significant change in their tax collections, however, businesses that ship products to clients at many locations may find GRT has become more complicated.

The tax charged on goods that are purchased in a store and shipped to a location indicated by the buyer will reflect the combined—state, local, and special district—rate in effect at the delivery destination. For example, GRT on a garment purchased in the City of Albuquerque and shipped to Taos Ski Valley will be 9.4375 percent versus 7.875 percent if the buyer carries the purchased garment with him from the store.

Businesses that rely exclusively on shipping must become adept at managing hundreds of tax rates. Tax districts and different rates within the state can be found on the most recent tax table here. Software that has been developed for other states that use source-based taxation is also available.

GRT calculations may also be challenging for businesses that sell services rather than tangible property. If the service is “delivered” at the client’s location, the tax charged will be the rate in effect at the client’s location. Some services have been exempted from this rule, and the department has a definition that professionals and service providers can use to determine if their sales are taxable at their business location or their client’s location. The definition and new rules will be addressed during the webinar.

To help businesses accurately report GRT and other taxes, TRD will launch a new website on Tuesday, July 6, that uses different forms for different taxes—what the department calls “tailored” returns. For example, employee withholding will no longer be reported on the same form as GRT collections. Businesses will retain their assigned Combined Reporting System (CRS) number; however, because the system will no longer be combined, a company’s CRS number will be known as its Business Tax Identification Number, or BTIN.

Register for the 2:00 pm June 23 webinar.

View previous webinars on EDD YouTube and TRD YouTube pages.

Other GRT workshops can be found on the TRD website.