New Mexico State Taxes
Quick Tax Facts
Income Tax: 1.5% – 5.9%
State Sales Tax: 5.125%
Median Property Tax: $1,588
Overview
New Mexico is known for its warm, dry climate and delicious southwestern cuisine. If you’re looking for natural scenery and endless sunshine, New Mexico has it in droves. In terms of taxes, however, it’s a mixed bag. Income taxes are fairly steep for those earning more than $210,000. Property taxes, on the other hand, are pretty low compared to the rest of the country. If you over 100 years old, there’s an added bonus – you’re exempt from paying any state income taxes.
New Mexico Income Tax
New Mexico has a progressive income tax rate that increases with income and varies based on filing status. The state income tax rates currently range between 1.5% and 5.9%. Legislation was introduced in 2025 to eliminate the state income tax, but it did not pass.
| New Mexico Income Tax Rates – Single |
|---|
| If your taxable income is: | Your tax rate is: |
|---|---|
| Less than $5,500 | 1.5% |
| $5,501 – $16,500 | $82.50 plus 3.2% of excess over $5,500 |
| $16,501 – $33,500 | $434.50 plus 4.3% of excess over $16,500 |
| $33,501 – $66,500 | $1,165.50 plus 4.7% of excess over $33,500 |
| $66,501 – $210,000 | $2,716.50 plus 4.9% of excess over $66,500 |
| Over $210,000 | $9,748 plus 5.9% of excess over $210,000 |
| New Mexico Income Tax Rates – Head of Household or Married Filing Jointly |
|---|
| If your taxable income is: | Your tax rate is: |
|---|---|
| $0 – $8,000 | 1.5% |
| $8,001 – $25,000 | $120 plus 3.2% of excess over $8,000 |
| $25,001 – $50,000 | $664 plus 4.3% of excess over $25,000 |
| $50,001 – $100,000 | $1,739 plus 4.7% of excess over $50,000 |
| $100,001 – $315,000 | $4,089 plus 4.9% of excess over $100,000 |
| Over $315,000 | $14,624 plus 5.9% of excess over $315,000 |
| New Mexico Income Tax Rates – Married Filing Separately |
|---|
| If your taxable income is: | Your tax rate is: |
|---|---|
| $0 – $4,000 | 1.5% |
| $4,001 – $12,500 | $60 plus 3.2% of excess over $4,000 |
| $12,501 – $25,000 | $332 plus 4.3% of excess over $12,500 |
| $25,001 – $50,000 | $869.50 plus 4.7% of excess over $25,000 |
| $50,001- $157,500 | $2,044.50 plus 4.9% of excess over $50,000 |
| Over $157,500 | $7,312 plus 5.9% of excess over $157,500 |
Who Must File?
New Mexico residents must file a state income tax return (PIT-1) if they meet any of the following conditions:
- They are required to file a federal income tax return;
- Want to claim a refund of any New Mexico state income tax withheld from their pay; or
- Plan to claim any New Mexico tax credits or rebates.
Non-residents, including those who live in a state without income taxes, must file a New Mexico income tax return if both of the following are true:
- They are required to file a federal income tax return; and
- They have income from any New Mexico source.
Members of Indian Nations, Tribes, or Pueblos
Indians who work or live on lands outside the Indian nations, tribes, or pueblos of which they are members are subject to New Mexico personal income tax unless both of the following apply:
- They are an enrolled member of an Indian nation, tribe, or pueblo who lived on the lands where they are a member; and
- Their entire income was earned from work on those lands.
New Mexico Sales Tax
New Mexico does not have a sales tax. Instead, it imposes a gross receipts tax. The state gross receipts tax rate is currently 5.125%, but local governments may also levy additional taxes. The gross receipts tax rate varies throughout the state, ranging from 5.25% to 8.4875%.
New Mexico Property Taxes
New Mexico property taxes are administered and collected by local governments. Property taxes are based on the assessed value of the property and the state requires that it be at 1/3 of the market value. For example, a home with a market value of $240,000 would have an assessed value of $80,000 ($240,000 x 1/3). The state also limits increases in property values to 3% annually.
The median property tax bill in New Mexico is $1,588. Bernalillo County has the highest average tax bill at $2,459. The lowest average property tax bill in the state is $290 in Harding County.
| Highest | $2459 |
|---|---|
| Median | $1588 |
| Lowest | $290 |
Yearly Cost Per Resident
New Mexico Tax Holidays
New Mexico hosts an annual Gross Receipts Tax Holiday the first weekend in August from 12:01 AM on the first Friday to midnight the following Sunday. The following items are exempt from sales tax during that period:
- Clothing and shoes sold for less than $100
- Computers and tablets sold for $1,000 or less
- Computer accessories (keyboards, monitors, speakers, etc.) valued at $500 or less
- School supplies used for standard classroom purposes (backpacks, calculators, art supplies, paper, writing instruments, etc.)
New Mexico Tax Relief
An unpaid New Mexico income tax balance can become more difficult to manage as penalties and interest continue to accumulate. When taxes remain unresolved, the New Mexico Taxation and Revenue Department (TRD) may take steps to collect the amount owed. Whether your tax issue stems from unfiled returns, an unexpected financial setback, or outstanding business taxes, addressing the problem early may help prevent collection activity from becoming more serious.
If paying your entire New Mexico tax bill at once isn’t an option, you may be able to set up a short-term payment plan or an installment agreement. Working toward a resolution may also help you avoid or address collection measures such as tax liens, wage garnishments, and levies.
Understanding New Mexico’s collection process and the options available for resolving delinquent taxes can help you determine an appropriate next step. Taking action on your outstanding balance can put you on the path toward resolving your tax debt and bringing your New Mexico tax account back into good standing.
Common New Mexico State Tax Problems
Back Taxes
If you owe unpaid New Mexico taxes, addressing your balance early may help you avoid additional penalties and collection actions.
Unfiled Tax Returns
Filing past-due New Mexico tax returns is often the first step toward resolving your state tax issues.
Tax Notices
Notices from the NM Department of Revenue shouldn’t be ignored, as they often require prompt action to prevent further collections.
Liens & Levies
Unresolved tax debt may lead to liens against your property or levies on your assets as the state works to collect what is owed.
Garnishment
New Mexico may garnish your wages to collect unpaid taxes, reducing the amount of each paycheck you receive.
Tax Penalties
Unpaid taxes can continue to accrue penalties and interest until your balance is resolved.
How New Mexico Collects Tax Debt
If you owe New Mexico income taxes and don’t pay, the state will use three methods to collect the debt:
- Notices – You may receive a Notice of Assessment or Statement of Account notifying you of an unpaid tax balance.
- Telephone Calls – If you do not respond to the notices and pay your tax debt, the Call Center Bureau (CCB) will reach out by phone to discuss your delinquent bill and your payment options. If an agreement cannot be reached, a lien may be filed.
- Field Visits – Failure to resolve your balance through phone calls will result in a revenue agent making an in-person visit. If you still refuse to pay the debt, the state will move to levy your wages and/or assets.
Notice of Assessment sent to taxpayer
CCB telephone calls
Field visit and collections begin
New Mexico State Tax Relief Options
New Mexico offers only one relief option:
- Payment Plans – If you’re unable to pay your tax bill on time, you may be eligible to pay over several months (up to 72) through a payment plan.
The state is known as a non-settlement state and will not reduce or settle state tax debts through programs such as an Offer in Compromise or penalty abatement.
When to Seek Tax Relief Help
If you’re experiencing any of the following, it may be time to explore your tax relief options:
You’re Receiving Collection Notices
Ignoring New Mexico tax notices can lead to more serious collection actions, so it’s often best to address the issue early.
You Can’t Afford to Pay Your Taxes
If paying your New Mexico state tax bill in full isn’t realistic, there may be payment options available.
Collection Actions Have Started
If you’re facing wage garnishments, bank levies, or tax liens, professional guidance may help you understand your options.
The sooner you address your tax debt, the more options you may have available to resolve your balance and minimize additional collection actions.
New Mexico Tax Relief FAQs
New Mexico Tax Resources
If you need assistance preparing your New Mexico state taxes, you can speak with a tax professional from Tax Defense Network by calling 855-476-6920.
You can also visit the New Mexico Taxation & Revenue website for additional resources.
- Make a Payment
- Individual Income Tax Forms
- Where’s My Refund?
- Customer Service: 866-285-2996
