My business is located outside of New Mexico, but I have customers in NM. Are those sales subject to gross receipts tax?

The answer can involve a complicated analysis of specific facts surrounding the way you interact with your customers and an analysis whether you are “engaging in business” in New Mexico. (That term is in quotation marks because it is defined in New Mexico state law.)

In general, if you sell products to customers located in New Mexico or provide services that are initially used in New Mexico, and the total of those sales was over $100,000 in the prior calendar year, you are required to register and file reports with the N.M. Taxation & Revenue Dept. All of your sales to New Mexico customers must be reported, although some may not be subject to gross receipts tax if they qualify for certain deductions. The tax rate you pay is usually based on your customer’s location.