NEW MEXICO INCOME TAX BRACKETS 2021 LICENSE

NEW MEXICO INCOME TAX BRACKETS 2021 LICENSE

To qualify as a marketplace provider, one must list or advertise items for sale, lease, or license and, directly or indirectly, collect and transmit the payment from the end customer to the marketplace seller. Under these new rules, a marketplace provider is responsible for GRT on its receipts derived from facilitating New Mexico sales, leases, and licenses, regardless of whether the marketplace seller is 'engaged in business' in New Mexico. 6, however, a remote seller or a marketplace provider lacking a physical presence in New Mexico is now considered to be engaged in business in the state and will incur a GRT obligation if, during the previous calendar year, it had at least $100,000 in total taxable gross receipts from New Mexico consumers. Prior to July 1, 2019, a business was subject to the GRT only if it had a physical presence in New Mexico. 6 will require a shift in sourcing the GRT on July 1, 2021. Because the GRT is currently origin- based rather than destination- based, many in- state sellers are subject to the GRT at only one rate that applies at their business location. The rate includes a combination of state and local GRTs, if applicable. In addition, the GRT rate is based on the seller's business location rather than the buyer's location.

Nearly all sales are subject to the GRT, meaning taxability determinations are likely less complicated than under an RST. Similar to states with an RST, New Mexico also imposes a complementary compensating tax, which is an excise tax imposed on persons using property or services in New Mexico as with a use tax, it is intended to protect New Mexico businesses from out- of- state businesses that are not subject to the GRT.įor in- state businesses, the GRT can be seen as easier to apply than an RST. The tax base for the GRT is generally broader than an RST and applies to the sale of tangible personal property as well as generally to all receipts from services performed in New Mexico, the leasing or licensing of property in New Mexico, and the granting of a right to use a franchise employed in New Mexico.īusinesses subject to the GRT are not required to collect GRT from their customers, but in practice, they nearly always do. While an RST is a transaction tax imposed on the sale of tangible personal property and certain enumerated services, the GRT is imposed on the privilege of doing business in New Mexico. New Mexico's GRT is a unique state tax that resembles the retail sales tax (RST) imposed by most other states, but it differs from the RST in several ways. Basic structure of New Mexico's GRT and compensating tax

This discussion summarizes both sets of changes to New Mexico's GRT and compensating tax regime, including economic nexus for remote sellers and marketplace facilitators, a comprehensive system of local compensating taxes, changes in the state's sourcing rules, and expansion of the tax base to include services performed out of state and certain digital goods. Any sellers that transact business with New Mexico consumers should take note of these changes and understand the impact to their New Mexico tax obligations. Potentially affecting more businesses than the nexus provisions, this second set of changes implements a regime of substantially uniform GRT and compensating taxes for both in- state and out- of- state businesses. 6 also contained a second set of significant GRT changes that will go into effect on July 1, 2021. 6, New Mexico's own economic nexus threshold for the GRT took effect on July 1, 2019. This paved the way for states to enact economic nexus laws requiring out- of- state businesses to collect sales and use tax from in- state customers even if the businesses have no physical presence in the state. 2080 (2018), in which the Court overturned its decades- old physical- presence nexus rule. Supreme Court decision in South Dakota v. The changes to the GRT came primarily in response to the U.S.

Michelle Lujan Grisham signed House Bill (H.B.) 6, enacting major changes in the state's corporate income tax and gross receipts tax (GRT) regimes.

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