New Mexico sits in the southwest of the United States. The state owes its name to Spanish conquistadors, who used it for the lands west and north of the Rio Grande. New Mexico covers a vast 315,000 km² and is home to just over two million people, which makes for a very low population density of six people per square kilometer. With Santa Fe as its capital, the state is also known as the “Land of Enchantment”.
Every year, New Mexico exports goods worth more than $5.6 billion around the world. Its biggest trading partner is Mexico, followed by China and Japan. Computer and electronic products are the largest export category, at $2 billion.
Welcoming infrastructure
Over the past four years, the New Mexico Borderplex has grown strongly. The catalysts: established logistics parks with rail connections in and around Santa Teresa, Interstate 10, and investment in water and road infrastructure. The ports of entry at Santa Teresa and Columbus handle commercial traffic.
The recently expanded Santa Teresa port of entry has shorter wait times than those in neighboring border states, a real location advantage. New Mexico also offers direct access to the ports of Houston and Long Beach, making it an ideal base. Destinations deep inside Mexico can be supplied efficiently by rail or truck.
Heading north, all the way to Canada, road freight is just as easy. In Las Cruces, Interstate 10 meets Interstate 25, a direct route to the Canadian border. A $400 million intermodal facility on the Sunset Route between El Paso and Los Angeles has been completed.
In 2011, New Mexico created a 6-mile overweight cargo zone around the Santa Teresa and Columbus ports of entry, which was doubled to a 12-mile radius in 2015. The zone allows trucks entering New Mexico from Mexico to carry almost 44 tons of freight, even with a reducible load.
More than just logistics
New Mexico's improved tax climate has been recognized by Ernst & Young and the Tax Foundation, among others. The state has also cut its top corporate tax rate to 5.9%. These tax changes are one reason more and more companies from a range of industries are setting up in New Mexico. In the Tax Foundation's state business climate ranking, the “Land of Enchantment” now sits in 22nd place.
New Mexico not only has a long tradition in aerospace, it is also home to the world's first commercial spaceport. Spaceport America was purpose-built and is owned by the State of New Mexico. Virgin Galactic signed a 20-year lease to base its global headquarters at Spaceport America and launch its space tourism program from there.
New Mexico is also strong in research, especially technology. Three national laboratories, renowned research universities and many nonprofit research institutions provide specialized services to businesses.
Income tax in New Mexico
New Mexico levies an income tax of 1.5 to 5.9% (since tax year 2025), depending on income. On top of that, federal income tax applies.
Corporate tax in New Mexico
New Mexico levies a corporate tax of 5.9%. On top of that, federal corporate tax applies.
Sales tax in New Mexico
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Sales tax rate in New Mexico
Instead of a classic sales tax, New Mexico levies a Gross Receipts Tax. The state rate is 4.875% (since July 2023); cities and counties add local surcharges, so the total rate varies by location.
New Mexico nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
July 1, 2019
Included transactions:
Total taxable gross receipts from sales, leases and licenses of tangible personal property, plus sales of licenses and services of licenses for the use of real property, sourced to the state
Treatment of exempt sales:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales only
Sales/transaction threshold:
$100,000
Evaluation period:
the threshold applies to the previous calendar year
Additional information:
- Businesses that meet the economic nexus threshold must, from July 1, 2021, when destination sourcing takes effect, collect city and county GRT.
- Registration requirements: New Mexico requires a remote business to register for New Mexico gross receipts tax by January 1 of the year following the year in which it crossed the economic nexus threshold.
- New Mexico tax law changes
- HB6
New Mexico marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
Economic nexus threshold:
At least $100,000 in total taxable gross receipts in New Mexico in the previous calendar year.
Remote sellers should include sales made through a marketplace when calculating the threshold. Marketplace facilitators include all sales made through the marketplace when calculating the threshold.
Registration requirements:
- Remote multichannel sellers: Once you cross the economic nexus threshold, you must register with the New Mexico Taxation and Revenue Department (TRD) and collect New Mexico compensating tax on sales not taxed by a marketplace facilitator.
- You must report all sales but can take a deduction for sales on which a marketplace facilitator collected tax.
- Remote marketplace sellers: You must register with the New Mexico TRD once you cross the economic nexus threshold.
- You can take a deduction for sales on which a marketplace facilitator collected the tax.
- In-state multichannel sellers: You must register with the New Mexico TRD and collect tax on sales not taxed by a marketplace facilitator.
- You must report all sales but can take a deduction for sales on which a marketplace facilitator collected tax.
- In-state marketplace sellers: You must register. Contact the New Mexico TRD for more information.
- You can take a deduction for sales on which a marketplace facilitator collected the tax.
- Learn more here.
For an overview of every state, see our directory US states at a glance. Our guide Which US state is best for your company? helps you pick the right state, and the guide to forming a US company walks you through the process. And if you want to run your US LLC tax-free without a US permanent establishment, our sister site zerotax.llc is the place to go.
How we help with New Mexico:
Planning something in New Mexico? We form your US company in one of the six states we serve. You'll find the options and fees under US Company Formation, and we'll answer your questions in a consultation.