New Mexico · NM · Money & taxes
New Mexico: Are groceries taxed?
Groceries exempt
New Mexico lets grocery stores deduct food sales from gross receipts, so groceries aren't subject to its gross receipts tax.
New Mexico has a gross receipts tax instead of a classic sales tax. Retail food stores may deduct receipts from selling food for home use, defined by reference to what federal SNAP benefits can buy. The deduction also lowers city gross receipts taxes, and the state pays cities a distribution to make up the lost revenue.
What the law says
Receipts from the sale of food by a retail food store that are not exempt from gross receipts taxation and are not deductible pursuant to another provision of the Gross Receipts and Compensating Tax Act may be deducted from gross receipts.
Sources
- NMSA 1978 § 7-9-92 (FindLaw) Mirror of official text · codes.findlaw.com
- NMSA 1978 § 7-1-6.46 (FindLaw) Mirror of official text · codes.findlaw.com
Confirm with the state
- Agency
- New Mexico Taxation and Revenue Department
- Phone
- 1-866-285-2996
- Website
- tax.newmexico.gov
How bordering states compare
- Arizona Groceries exemptArizona exempts groceries from its state transaction privilege (sales) tax, but cities and towns may tax food.
- Colorado Groceries exemptColorado exempts food for home consumption from its state sales tax, but cities and counties may still tax groceries.
- Oklahoma Groceries exemptOklahoma ended its 4.5% state sales tax on groceries on August 29, 2024, though local sales taxes still apply.
- Texas Groceries exemptTexas exempts most groceries from its 6.25% state sales tax. Soft drinks, candy and prepared food are taxed.
- Utah Taxed at a lower rateUtah taxes groceries at a 1.75% state rate instead of its 4.85% general state rate; with local taxes, groceries pay 3%.
All 50 states for this question · Other topics in New Mexico