State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

New Mexico State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

New Mexico

Add to State Compare List | View List
(0) selected | Compare up to 5

The Bottom Line
Flag of New Mexico

Tax-Friendly

New Mexico avoids some of the extremes of its neighbors. Unlike Texas, for example, it has an income tax with a top rate of 5.9%. But if you can hang in there until you're 100, your income taxes are waived altogether. Residents of the Land of Enchantment face fairly high sales taxes, countered by modest property taxes.

Income Tax Range

Low: 1.7% (on up to $5,500 of taxable income for single filers and $8,000 for joint filers)

High: 4.9% (on taxable income over $16,000 for single filers and over $24,000 for married couples filing jointly)

Beginning with the 2021 tax year, the top rate will be 5.9% on taxable income over $210,000 for single filers and over $315,000 for joint filers.

Sales Tax

5.125% state levy. Localities can add as much as 4.313%, and the average combined rate is 7.84%, according to the Tax Foundation. New Mexico's tax is a gross receipts tax that covers most services.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 4% excise tax
Prescription Drugs: Exempt

Real Property Taxes

In New Mexico, the median property tax rate is $776 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 18.88¢ per gallon.
Diesel: 22.88¢ per gallon.

Sin Taxes

Cigarettes: $1.66 per pack
Other tobacco products: 12.5% of wholesale price
Vapor products: $0.50 per cartridge for closed systems, 12.5% of wholesale price for nicotine liquid

Beer: $0.41 per gallon
Wine: $1.70 per gallon
Liquor: $6.06 per gallon

Marijuana: 12% excise tax (rate gradually increased to 18% beginning July 1, 2025)

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.


Advertisement