All states rely on some form of taxation to support their budget and New Mexico is no different. State government has steadily worked to make New Mexico more attractive for business location and expansion by reducing many taxes. As a net power exporter with vast mineral resources, New Mexico has been able to maintain a budget surplus while reducing many taxes. Taxes in New Mexico include gross receipts, income (personal and corporate), property (real and personal), un-employment, and workers compensation. 

Property tax rates in the State of New Mexico are among the lowest in the nation. Effective rates in Dona Ana County are just over 1% of appraised value, depending on use and location. Unlike many states, inventory is not considered personal property and therefore not taxed. Likewise, autos are not considered personal property for property tax purposes and are only subject to annual license renewals in years following purchase.

New Mexico gross receipts (sales) tax rates vary by county and municipality. Gross receipts on the purchase of food and certain medical purchases are exempt. The state-portion rate is 5%. To this rate, Dona Ana County adds .525% and the City of Las Cruces adds 1.60%. Other municipalities in the county are within this general range.

New Mexico’s unemployment tax rate is 2% with a taxable wage base of $18,600. Workers’ compensation rates are $2.56 per $100 of payroll.

Although New Mexico has both personal and corporate income taxes, the rates are being reduced and are more than offset by the lower property taxes.

More detail is available from the respective taxing authorities. See the “Open for Business” and “Business Resources” tabs. Information on incentive programs available to new and expanding operations is available on the “Incentives” tab.