New Mexico gross receipts tax on invoices (2026 guide)

New Mexico doesn't have a classic sales tax. Instead it has a gross receipts tax (GRT), which is imposed on the business rather than the buyer. The state portion is 4.875%, and counties and cities add their own rates on top.

Two things make GRT different for freelancers and small businesses. First, it covers most services, not just goods. Second, although the tax is legally yours, it's common to pass it on to the customer — and if you do, the Taxation and Revenue Department says it must be separately stated on the invoice.

New Mexico gross receipts tax rates

The state portion was lowered from 5% to 4.875% effective July 1, 2023, under House Bill 163 from the 2022 legislative session. Local rates are combined with the state rate in the Department's Gross Receipts Tax Rate Schedule, where every location has its own code. Rates can change twice a year, in January and July, so check the current schedule.

Which location's rate: destination sourcing

Since July 1, 2021, New Mexico uses destination-based sourcing. In general, you report your receipts — and use the rate — for the location where your goods or the product of your service is delivered, which is usually where the customer is.

There are important exceptions. According to the Department's return instructions:

• Professional services (other than construction-related services) are reported at the location of the person performing the service.
• Construction services are reported at the construction site.
• Real estate services are reported where the property is located.

If you're a consultant or other professional, check whether your work counts as a professional service before choosing the location code.

Which services are taxable in New Mexico?

Gross receipts include money received from selling property in New Mexico, leasing or licensing property used in New Mexico, performing services in New Mexico, and performing services outside New Mexico whose product is initially used in New Mexico. That means most service work — design, development, consulting, cleaning, repairs, landscaping, construction — is subject to GRT unless a specific exemption or deduction applies.

Deductions are common in business-to-business work. For example, a sale for resale can be deducted when the buyer gives you the right certificate (see below).

Registering for gross receipts tax

If you do business in New Mexico, you register with the Taxation and Revenue Department and receive a New Mexico Business Tax Identification Number (NMBTIN). You then report gross receipts by location code on Form TRD-41413, Gross Receipts Tax Return, and can file online through the Taxpayer Access Point (TAP).

Out-of-state sellers without a physical presence must register and pay GRT once they have at least $100,000 of taxable gross receipts sourced to New Mexico in the previous calendar year. New Mexico doesn't use a transaction-count threshold.

What a New Mexico invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and the invoice date,
• a description and price for each item or service,
• gross receipts tax as a separate line, with the combined rate for the location, if you pass the tax on, and
• the total due.

The Department says it's common to pass GRT on either by separately stating it or by including it in the selling price — but if you pass it on, separately stating it is required. Labeling it "NM gross receipts tax" rather than "sales tax" helps customers understand the charge. In Invoice Native, tick Tax on the lines that are subject to GRT.

Non-taxable transaction certificates (NTTCs)

New Mexico uses non-taxable transaction certificates (NTTCs) instead of resale certificates. The most common types are:

• Type 2 — purchase of tangible goods for resale,
• Type 5 — purchase of services for resale,
• Type 6 — construction materials and services, and
• Type 9 — tangible goods bought by 501(c)(3) nonprofits and government agencies.

Buyers with an NMBTIN obtain and execute NTTCs through TAP. If you accept a properly executed NTTC in good faith, it's conclusive evidence that the receipts are deductible. Buyers who aren't required to register in New Mexico may be able to give you a Multistate Tax Commission uniform certificate or a Border States Uniform Sale for Resale certificate instead. See how to invoice a tax-exempt customer.

A worked example

Suppose you run a cleaning business and invoice a client $1,000 for a month of office cleaning, delivered at the client's office in a location with a combined GRT rate of 7.5% (a hypothetical rate for this example — look up the real one in the rate schedule).

GRT at that location is $1,000 × 7.5% = $75.00. If you pass it on, the invoice shows $1,000 for cleaning, a separate $75.00 gross receipts tax line, and a total of $1,075.00. Either way, you report the $1,000 under that location's code on your TRD-41413 return.

Selling to customers in other states

Goods shipped out of state and professional services for out-of-state locations are reported under special out-of-state codes, and other states' rules may apply instead. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check each state's thresholds and use its rate on those invoices. Our sales tax calculator has each state's rate.

Common mistakes on New Mexico invoices

• Assuming services aren't taxed. GRT covers most services.
• Using your own location's rate for goods or services delivered elsewhere in the state (destination sourcing since July 2021).
• Using the customer's location for professional services, which are reported where the performer is.
• Passing on GRT without stating it separately on the invoice.
• Not collecting NTTCs for resale and other deductible sales.

Quick checklist for New Mexico invoices

• ✅ Registered with Taxation and Revenue (NMBTIN) before you start
• ✅ 4.875% state rate plus the local rate from the current schedule
• ✅ Right location code: delivery location, or yours for professional services
• ✅ GRT shown separately whenever you pass it on
• ✅ NTTCs on file for every deducted sale