Do I use the GRT rate where my business is located?

Beginning July 1, 2021, most businesses will use the gross receipts tax rate for where their customers are located. But (there's always a "but" in taxes) this is not quite as simple as it might seem. The following is an overview of the general rules.

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The concept is that the applicable GRT rate is determined by where goods or services are delivered. It is simple when products or services are delivered to customers at the seller's location - as happens at a retail store - the rate to use is the one for the seller's location. On the other hand, when businesses ship products, sell over the internet or deliver their services to customers who are located somewhere else, the applicable rate is the one for the customer's location. Businesses located outside of New Mexico who sell or deliver to customers in the state will pay the state rate, 4.875%.

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Exceptions

 

Marketplace sellers - If you sell through websites such as Etsy, eBay or Amazon you will be able to deduct those sales from total gross receipts if you obtain documentation for the marketplace provider that the provider is registered with the N.M. Taxation & Revenue Dept. and has remitted or will remit the taxes due.

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Unchanged - There will be no changes from the way some services have been reported by  professional services that either require a license from the state or a master's degree or higher., construction and construction-related services and transportation services such as Uber and Lyft. 

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There are many fine points that might affect your business. For more details read N.M. Taxation & Revenue Dept. Publication FYI-200.

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Bookkeeping requirements

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Your bookkeeping system must be able to determine the amount of sales for each location you sell into within New Mexico plus one total for all out-of-state sales.  You'll need this information to report multiple gross receipts locations.

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