July 2021: New Mexico Sales Tax Collection and Reporting Update
The Taxation and Revenue Department of New Mexico implemented two changes effective July 1, 2021:
- The Gross Receipts tax rate now is calculated based on where the goods or products of services are delivered. (NM Source)
- The business tax filing system (Combined Reporting System or "CRS") has been redesigned requiring sales tax returns to be filed according to specific programs. (NM Source)
In this article:
Gross Receipts Tax Sourcing Change
Prior to July 1, 2021, the Gross Receipts Tax was calculated and collected based on where the seller was located. Out-of-state sellers, also referred to as remote sellers, collected a flat statewide rate.
The sourcing for New Mexico changes from Origin-based sourcing to Destination-based sourcing with a few exceptions.*
- Effective July 1, 2021, most businesses will collect the Gross Receipts Tax based on the rate where their goods or products of their services are delivered.
- Remote sellers will now pay both the statewide rate and local-option Gross Receipts Taxes.
- The TaxJar API has been updated to reflect destination-based sourcing effective July 1, 2021. Any calculations prior to July 1, 2021 will reflect the origin-based sourcing that was in effect.
*Please contact the state directly to learn more about these exceptions.
How does this affect my TaxJar Reports for New Mexico?
Your TaxJar Reports will be updated to reflect destination-based sourcing for sales to buyers located in New Mexico.
- The Expected Sales Tax Report will reflect destination-based sourcing for sales made on and after July 1, 2021.
- For sales made prior to July 1, 2021, the Expected Sales Tax Report will retain the origin-based sourcing that was in effect.
Combined Reporting System Redesign Project
The Taxation and Revenue Department is redesigning its Combined Reporting System (CRS) to create separate returns for withholding, gross receipts and compensating taxes.
- AutoFile will support these changes. If you're enrolled in AutoFile, you're all set and no further action is required from you!
If you manually file your New Mexico sales tax return, we will update this article with further guidance as we learn more from the state.