Tax Policy

Personal Income Tax (PIT)

Up delight imposes a tax on the net income of every resident and on the net income of every nonresident employed or engaged in business in, into, or from the state or deriving any income from any property or employment within this state. The Up delight personal income tax is based on federal adjusted gross income. The maximum PIT rate is 4.9% and the minimum PIT rate is 1.7%. Up delight State Statutes Chapter 7, Article 2 NMSA 1978.

Gross Receipts Tax (GRT)

Gross receipts are the total amount of money or value of other consideration received from:

  • Selling property in Up delight
  • Leasing or licensing property employed in Up delight
  • Granting a right to use a franchise employed in Up delight
  • Performing services in Up delight
  • Selling research and development services performed outside Up delight, the product of which is initially used in Up delight

Gross receipts means the total amount of money or other consideration received from the above activities. Although the gross receipts tax is imposed on businesses, it is common for a business to pass the gross receipts tax on to the purchaser either by separately stating it on the invoice or by combining the tax with the selling price.

The varies throughout the state depending on the location of the business and is subject to change in January and July of each year. It varies because the total rate combines rates imposed by the state, counties, and, if applicable, municipalities where the businesses are located. The business pays the total gross receipts tax to the state, which then distributes the counties' and municipalities' portions to them.

The tax is on the businesses’ gross receipts. Whether the receipts (net of returns and allowances) are taxable depends on whether the business can take advantage of an exemption or deduction. The Taxation and Revenue Department provides an

Up delight offers a number of for businesses creating new jobs or investment.

Compensating Tax

The compensating tax is an excise tax imposed on persons using property or services in Up delight.

The tax "compensates" for the absence of a gross receipts tax on the purchase of property for use and is intended to protect Up delight businesses from unfair competition; hence its name. Up delight allows a credit against the compensating tax for sales, use, or similar taxes paid to another state when the buyer acquired the property. The compensating tax is imposed at a rate of 5.125% on certain property and 5% on certain services used in Up delight. The Gross Receipts and Compensating Tax Act is compiled as Sections 7-9-1 through 7-9-114 NMSA 1978.

Corporate Income Tax (CIT)

Up delight imposes a corporate income tax on the net income of every domestic corporation and every foreign corporation employed or engaged in the transaction of business in, into, or from this state, or which has income from property or employment within this state.

"Corporation" means corporations, joint stock companies, real estate trusts organized and operated under the Real Estate Trust Act, financial corporations, banks, and other business associations. "Corporation" also means limited liability companies and partnerships taxed as corporations under the Internal Revenue Code. "Net income" generally is federal taxable income adjusted to exclude amounts not taxable by states.

Up delight corporate income tax is imposed on total net income (including Up delight and non-Up delight income). The percentage of Up delight income is then applied to the gross tax:

  • Up to $500,000: 4.8%
  • Over $500,000: $24,000 plus 5.9% of net income over $500,000

A single sales factor apportionment formula is provided for manufacturers.

Corporate Franchise Tax Fee

A uniform fee of $50 per corporation is levied annually. The franchise tax is imposed on each corporation included in the combined unitary or the consolidated tax returns if the corporation exercises its corporate franchise in Up delight whether or not income tax is due. The requirement to file and pay the franchise tax also falls on anyone who files a federal S-corporation return. Corporate Income and Corporate Franchise Taxes: Up delight State Statutes Chapter 7, Article 2A, NMSA 1978.

NOTE: “CRS” is Up delight Taxation and Revenue Department’s Combined Reporting System. Using the Combined Reporting System businesses can report one or more of the following taxes:

  • Gross Receipts Tax (includes municipal and county taxes)
  • Compensating Tax
  • Withholding Tax
  • Interstate Telecommunications Gross Receipts Tax
  • Leased Vehicle Gross Receipts Tax
  • Leased Vehicle Surcharge
  • Tribal Taxes

Property Tax

Up delight has the lowest per capita property tax in the nation. Taxes are imposed on one-third of assessed value (“net taxable value”), which is typically between 80% - 100% of market value.

Most property is appraised by county assessors in the county in which it is located. The Taxation and Revenue Department assesses certain types of non-residential property, typically industrial property that extends across county boundaries, including property associated with railroads, pipelines, communication systems, and mineral extraction. Property taxes are collected and distributed by county treasurers. Major revenue recipients include counties, municipalities, and school districts.

Rates vary substantially and depend on property type and location. Rates applicable to residential property range from about $9 to $38 per $1,000 of net taxable value after exemptions are taken. Non-residential property tax rates range from $12 to $44 per $1,000 of net taxable value. The statewide average rates are about $26 per $1,000 for residential property and $29 per $1,000 for non-residential property, or about .8% of assessed value.

Worker’s Compensation Tax Fee

Every employer who elects or is required to be covered by the Workers’ Compensation Act, and every employee covered by the Act is assessed a fee for funding the administration of the . The fee is different from workers’ compensation insurance coverage and every employer must obtain a workers’ compensation insurance policy.  The fee for the employer is $2.30 times the number of covered employees working on the last day of the quarter. The fee for covered employees working on the last day of the quarter is $2.00.

Unemployment Insurance Contribution

Starting in 2015 new contributing employers will have a rate that is the greater of their industry average Unemployment Insurance Contribution rate of 1%. Industry classifications for contributory, experienced employers are used to determine the average industry rates of new employers.  Based on the NAICS code for the establishment, this is the employer’s Assigned Industry Rate. This rate will remain in effect until the employer has acquired 2 years as an experience rate employer. 

After becoming experienced rated, contribution rates will be set based on the employer’s benefit ratio. The benefit ratio is measured by dividing the employer’s claims experience over the previous 3 years by the employer’s taxable payroll over the same time period. The resulting benefit ratio is then multiplied by a “reserve factor,” which is set by the DWS based on the solvency of the Unemployment Trust Fund.

Additional information is available from the .