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Relocating to New Mexico? Here's What You Should Know About Its Taxes













Taxes, while unpleasant, are a must, and everyone should comply with them.
This is why, whenever you move to a different country/state, you should get familiar with how their tax system works as soon as possible.
This is because some countries, especially the American states, require citizens/residents to fill in tax forms and such.
If you don't, you may be fined and end up paying more than just the income tax, for example.
If moving to New Mexico, you may want to know more about its taxes and, if you're a businessman, about its legal practices.
To ensure that you won't be labeled as a criminal in the future, it is recommended to check the laws and regulations surrounding this matter with a reputed New Mexico criminal law firm.
Let's now see how New Mexico deals with its taxes!

The Overview

New Mexico is known, within the US, as a tax-friendly state.
This is mainly because the state offers its citizens tax breaks on corporate and personal income and economic incentives.
It is also worth mentioning that New Mexico is void of franchise, inheritance, and estate tax.
At the same time, it opted for a gross receipts tax instead of a sales one, which is enforced by businesses.

Income Tax

The same income tax applies to both residents and non-residents.
In short, just working in New Mexico will have you pay the same tax as a resident - namely a minimum of 1.7% and a maximum of 4.9%, depending on income.
This particular tax is also split into four variable income brackets.
Income brackets are different for married people who file for tax separately, estates, trusts, singles, and heads of households (married persons).
Keep in mind that corporate tax is not the same as income tax.
While an income of half a million dollars is taxed at 4.8%, anything higher will be taxed at 6.4%.
Moreover, if the income exceeds the first million, then it will be taxed at 7.6%.

Property Tax

First of all, personal property that is used personally (by the owner) is not subject to property tax.
Basically, if you buy a house in New Mexico and live in it, you may not have to pay taxes for it at all.
Naturally, personal property used for business is subject to tax.
In most cases, the effective tax rate for such property is around 1%.
If you're a household head, you may be subject to property tax reductions.

Gross Receipts Tax

Last but not least, let's talk about gross receipts tax.
As mentioned, New Mexico doesn't come with a sales tax on business transactions.
As such, most transactions (of goods and services) are taxed at roughly 5.125%.
However, cities may levy the gross receipt tax. The lowest GRT in New Mexico can be found in Lea County - 5.5%.
The highest, of 8.6%, is in Taos Ski Valley.
Governments also come with a GRT of 5% for the various services they offer to citizens, such as the collection and disposal of trash, water distribution, sewer services, sale of various personal property, and fees for docking and parking.

The Bottom Line

No matter the state or country you move in, it is essential to know how its tax system works.
Otherwise, you may end up paying more than you should or even less.
In the latter case, you may also have to face some local authorities, depending on the scenario.
Overall, New Mexico is a tax-friendly state, which is why many people decide to relocate there - mainly those who want to start a business!





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