Last week, the New Mexico Department of Revenue issued a news release reminding taxpayers of big changes to gross receipts tax collection and reporting coming in July. Pursuant to House Bill No. 6 of the 2019 legislative session, sales and leases of tangible personal property in New Mexico will be subject to local tax at the customer’s location rather than the sellers location.
This change comes with the simultaneous imposition of local compensating (use) taxes assessed at the same rate as the gross receipts (sales) tax. Currently, local jurisdictions only impose gross receipts tax, not compensating tax. We expect that these modifications will also impact the manner in which tax is reported in New Mexico.
In short, these changes are intended to simplify and streamline taxation in New Mexico and allow local jurisdictions to realize tax revenue from remote sales