New Mexico: Sales Tax Handbook
What purchases are taxable in New Mexico?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the New Mexico sales tax.
Contents1.) Taxability of Goods and Services
- General New Mexico taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in New Mexico?
Are services subject to sales tax in New Mexico?
In New Mexico, services are taxable unless they are specifically exempted from taxation.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in New Mexico?
Are drop shipments subject to sales tax in New Mexico?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In New Mexico, drop shipments are generally subject to state sales taxes.
Section 2: Taxability of Various Items in New Mexico
This table shows the taxability of various goods and services in New Mexico. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||EXEMPT|
|Food and Meals|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||TAXABLE|
|Medical Goods and Services|
|Medical Devices||TAXABLE *|
|Medical Services||TAXABLE *|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Motor Vehicles||EXEMPT *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||TAXABLE|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||EXEMPT|
|Pollution Control Equipment|
|General Pollution Control Equipment||EXEMPT|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||TAXABLE|
|Custom Software - Downloaded||TAXABLE|
|Customization of Canned Software||TAXABLE|
|General Trade-Ins||EXEMPT *|
|Vending Machine Sales|
* See notes in category taxability page for details
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