What are the New Mexico Economic Nexus Details?

Sovos
April 9, 2021

New Mexico is one of many states that updated its economic nexus following the South Dakota v. Wayfair, Inc. decision. With the passing of New Mexico House Bill (H.B.) 6, the Land of Enchantment adopted a sales tax collection requirement for out-of-state sellers and marketplace facilitators. The below outlines several of the major points in the New Mexico economic nexus requirements.

Enforcement date:
July 1, 2019.

Sales/transactions threshold:
$100,000.

Measurement period:
Threshold applies to the previous calendar year.

Included transactions/sales:
Gross receipts from sales, leases and licenses of tangible personal property, sales of licenses and sales of services and licenses for use of real property.

When You Need to Register Once You Exceed the Threshold:
Next transaction.

Summary: Remote sellers are required to collect gross receipts tax when their total gross receipts from sales sourced to New Mexico are $100,000 or more in the previous calendar year. Marketplace providers with sales into New Mexico over $100,000 must collect tax on behalf of their marketplace sellers. New Mexico permits marketplace sellers to deduct receipts for sales that are facilitated through a marketplace provider, so long as the seller obtains documentation from the provider indicating that the provider is registered with the department and has remitted or will remit taxes due on gross receipts from applicable transactions.

New Mexico H.B. 6 also extended the gross receipts tax to digital products, which includes “digital product delivered electronically, including software, music, photography, video, reading material, an application and a ringtone.”

Working with the right partner can help clarify changes in New Mexico’s economic nexus and ensure that your business stays compliant.

New Mexico Sales Tax Resources: Reach out to our team of experts for more information on New Mexico’s economic nexus. Also be sure to check out our interactive sales tax nexus map for real-time updates on every state.

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Author

Sovos

Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
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