Beginning July 1, 2019, out-of-state and online retailers who lack physical presence in New Mexico may be required to collect and remit New Mexico gross receipts tax. Out-of-state businesses will be required to register with the New Mexico Taxation and Revenue Department and begin remitting gross receipts tax if in the previous calendar year they have total taxable gross receipts of at least $100,000 from:
- The sale, lease, or licenses of tangible personal property sourced to New Mexico customers
- The sale of licenses and licenses for use of real property sourced to New Mexico customers
- The sale of services sourced to New Mexico customers
Marketplace providers will also be required to remit New Mexico gross receipts tax if they exceed the $100,000 taxable gross receipts threshold. Those who sell, lease or license tangible personal property or services or who license the use of real property through a marketplace provider are considered marketplace sellers.
Marketplace sellers are eligible for a deduction of those sales as long as they obtain documentation that indicates that the marketplace provider is registered with the New Mexico Taxation and Revenue Department and has remitted or will remit the taxes due on the gross receipts from those transactions.
This legislation is the result of a 2018 ruling by the U.S. Supreme Court in the South Dakota v. Wayfair case. The decision allows states to require out-of-state online businesses without a physical presence to collect and remit taxes from transactions in their state.
REDW’s State and Local Tax specialists closely monitor developments resulting from the Wayfair decision. Please contact James Ortiz, Senior Tax Manager, 505.998.3468, if you wish to discuss your individual state and local tax needs.
