New Mexico lesson 5 of 6
New Mexico Gross Receipts Tax and licensing
New Mexico does not have a general state sales tax. Instead it imposes a Gross Receipts Tax on the seller for most business receipts, including many services, which is a broader base than most states use.
How the Gross Receipts Tax works
Gross Receipts Tax applies to the total money or value a business receives from selling goods, performing services, or leasing property in New Mexico, and it is commonly passed on to the customer as a separately stated charge even though the legal liability sits with the business. The statewide base rate is set by statute and adjusted semiannually, and cities and counties add their own local increments on top, so the combined rate a customer sees depends on the specific location code for where the sale is sourced.
Because the rate and location code vary, confirm the current combined rate for your business address on the Taxation and Revenue Department's rate and location code lookup before you set prices, rather than relying on a single statewide figure.
Licensing at the state and local level
New Mexico does not have a single statewide general business license. Certain professions and industries require a license from the relevant state board, for example construction contractors, real estate, and healthcare, and some cities and counties layer on their own local business registration or licensing requirement. Check with the city or county where you operate in addition to any state board that regulates your industry.
An LLC that elects C corporation tax treatment for federal purposes pays New Mexico's corporate income tax, currently a flat 4.9% on New Mexico net income. A default pass-through LLC does not pay this tax; its members instead report their share on their personal New Mexico income tax return.
Key takeaways
- Gross Receipts Tax applies broadly to services as well as goods, unlike a typical state sales tax.
- The combined rate depends on the local increment for your specific location code, so check it before pricing.
- There is no statewide general business license; check your city, county and any relevant state board.
Frequently asked questions
Does Gross Receipts Tax apply if I only sell services?
Generally yes. New Mexico's Gross Receipts Tax reaches most services performed in or sourced to New Mexico, not just sales of physical goods, which is different from most states' sales tax.
Is there a franchise tax on New Mexico LLCs?
No general franchise tax applies to a default pass-through LLC. Only an LLC that elects C corporation tax treatment pays New Mexico's corporate income tax.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team