Recover password

N.M. 16th In Sales Taxes

ALBUQUERQUE, N.M. — New Mexico has the 16th-highest tax on sales in the nation, largely because of taxes added by county and local governments to the statewide gross receipts tax rate, according to a Tax Foundation study released Tuesday.

New Mexico’s 5.125 percent gross receipts tax rate is 30th among the 45 states and the District of Columbia that have some form of sales tax. However, New Mexico’s local governments impose an additional 2.12 percent rate, based on an average that the foundation weighted by population. That makes New Mexico’s combined state and local tax rate 7.24 percent.

Gross receipts taxes are imposed on the seller of goods and services, but sellers usually pass the tax through to the buyers. Sales taxes are imposed on the buyers.

The Tax Foundation report said that the advantage of sales taxes is they are transparent to the taxpayer and easy to understand. “Less known, however, are the local sales taxes collected in 36 states,” the report said. “These rates can be substantial, so a state with a moderate state sales tax rate could actually have a very high combined state-local rate compared to other states.”

Albuquerque’s gross receipts tax rate is 7 percent, which includes both the state and local tax. Rates in New Mexico range from a low of 5.5 percent in unincorporated portions of Lea County to a high of 8.6875 percent in Taos Ski Valley.

Tennessee has the highest combined state and local sales tax rate, at 9.45 percent. Alaska, which has no statewide sales tax but allows local communities to impose one, has the lowest combined rate at 1.77 percent.

Mississippi has the lowest population-weighted local sales tax rate on average, at 0.004 percent. However, its 7 percent statewide rate is the second highest in the country. California’s is the highest statewide rate, at 7.25 percent, but its local average rate of 0.86 percent puts the state’s combined rate at 12th highest.
— This article appeared on page B1 of the Albuquerque Journal


Continue reading