Overview of New Mexico Taxes: New Mexico has a progressive income tax with rates that rank among the bottom half of the country. The state’s effective property tax rate is also on the lower side. The state does not collect a sales tax, but rather a gross receipts tax on businesses that often gets passed to consumers.
Your 2025 Estimated State Income Tax:
Breakdown of Your Income Taxes
Your Annual Take-Home Pay
About This Calculator
Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions.
How Income Taxes Are Calculated
-
First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
-
Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer.
-
Based on your filing status, your taxable income is then applied to the tax brackets to calculate your federal income taxes owed for the year.
-
Your location will determine whether you owe local and / or state taxes.
When Do We Update? - We check for any updates to the latest tax rates and regulations annually.
Customer Service - If you would like to leave any feedback, feel free to email info@smartasset.com.
Assumptions
Deductions
- "Other Pre-Tax Deductions" are not used to calculate state taxable income.
Credits
- The only federal credit automatically calculated is the Savers Credit, depending on your eligibility.
- We do not apply any refundable credits, like the Child Tax Credit or Earned Income Tax Credit (EITC).
- We do not apply state credits in our calculations.
Itemized Deductions
- If itemizing at the federal level, you may need to itemize at the state level too. Some states don't allow itemized deductions, which is accounted for in our calculations.
- When calculating the SALT deduction for itemized deductions, we use state and local taxes, and we assume your MAGI.
- We assume that there is no cap to itemized deductions, if a state allows them.
- We do not categorize itemized deductions (such as medical expenses or mortgage interest), which could be subject to specific caps per state.
Local Tax
- Depending on the state, we calculate local taxes at the city level or county level. We do not include local taxes on school districts, metro areas or combine county and city taxes.
- With the exception of NYC, Yonkers, and Portland/Multnomah County, we assume local taxes are a flat tax on either state taxable income or gross income.
Actual results may vary based on individual circumstances and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee income tax amounts or rates. Past performance is not indicative of future results.
SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.
Find a high-yield deposit account that works for you
Taxes can really put a dent in your paycheck. But with an interest-bearing account, you can let your money work for you. Save more with these rates that beat the National Average*:
The National Average is based on the APY average for high-yield savings accounts with a minimum balance of $2,500, using data available from Bankrate.*
Taxes in New Mexico
New Mexico State Tax Quick Facts
- Income tax: 1.5% – 5.9%
- Sales tax: 4.875% – 13.687%
- Property tax: 0.63% median effective rate
- Gas tax: 18.88 cents per gallon of regular gasoline
Taxpayers in the Land of Enchantment pay three primary forms of state and local taxes: a state income tax, local property taxes and state and local gross receipts taxes.
Of course, the impact of these taxes varies depending on the financial circumstance of each taxpayer. Below we will take a closer look at the rules and exceptions for each of these taxes individually, as well as a few others such as the gas and cigarette taxes.
A financial advisor can help you understand how taxes fit into your overall financial goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
New Mexico Income Taxes
New Mexico’s income tax system is modeled after the federal income tax, though it has fewer income tax brackets and significantly lower rates. As shown in the table below, there are four income brackets, with higher tax rates applying to higher earnings.
Income Tax Brackets
| Rate | Single Filers | Married, Filing Jointly | Married, Filing Separately | Head of Household |
|---|---|---|---|---|
| 1.500% | $0 – $5,500 | $0 – $8,000 | $0 – $4,000 | $0 – $8,000 |
| 3.200% | $5,500 – $16,500 | $8,000 – $25,000 | $4,000 – $12,500 | $8,000 – $25,000 |
| 4.300% | $16,500 – $33,500 | $25,000 – $50,000 | $12,500 – $25,000 | $25,000 – $50,000 |
| 4.700% | $33,500 – $66,500 | $50,000 – $100,000 | $25,000 – $50,000 | $50,000 – $100,000 |
| 4.900% | $66,500 – $210,000 | $100,000 – $315,000 | $50,000 – $157,500 | $100,000 – $315,000 |
| 5.900% | $210,000+ | $315,000+ | $157,500+ | $315,000+ |
Rules for filing taxes in New Mexico are very similar to the federal tax rules. Deductions, both itemized and standard, match the federal deductions. For tax year 2025, that means single filers can claim a standard deduction of $15,750 and joint filers can claim a standard deduction of $31,500. State and local taxes are not deductible in New Mexico, so any filers claiming that itemized deduction on their federal tax return must add it back to their state taxable income.
Low- and middle-income earners may claim a $2,500 exemption. Using those rules for exemptions and deductions, New Mexico taxpayers can determine their taxable income and calculate their New Mexico income tax based on the rates above. After an initial tax amount is determined, there are certain rebates and credits that can be claimed to reduce the amount of taxes owed.
The available rebates and credits include the low-income comprehensive tax rebate (available to earners making less than $36,000 per year), the child day care credit, the refundable medical care credit (for taxpayers age 65 or older), the special needs adopted child tax credit and the working families tax credit.
New Mexico Capital Gains Tax
While capital gains are taxable as personal income in New Mexico, the state allows taxpayers with income from capital gains to claim a special tax deduction. That deduction is equal to up to 40% of the total income from net capital gains or $1,000 of the net capital gains reported, whichever is larger.
New Mexico Sales Tax
New Mexico doesn’t technically have a sales tax. Businesses are charged a gross receipts tax, which is collected at the state, county and city levels. This is often passed on to consumers by either adding it to the price or explicitly spelling it out on the invoice. The statewide gross receipts tax rate is 4.875%, while city and county taxes can add up to another 8.812%. The table below shows state, county and city rates in every county in New Mexico.
Gross Receipts Tax Rates (Updated December 2025)
| County | Maximum Tax Rate |
|---|---|
| Bernalillo County | 8.075% |
| Catron County | 7.75% |
| Chaves County | 8.2708% |
| Cibola County | 10.875% |
| Colfax County | 8.2583% |
| Curry County | 7.9375% |
| De Baca County | 7.8125% |
| Dona Ana County | 8.39% |
| Eddy County | 7.6458% |
| Grant County | 8.1125% |
| Guadalupe County | 8.4875% |
| Harding County | 7.1458% |
| Hidalgo County | 7.75% |
| La Plata County | 6.5% |
| Lea County | 7.1875% |
| Lincoln County | 8.1875% |
| Los Alamos County | 7.0625% |
| Luna County | 8.25% |
| Mckinley County | 10.875% |
| Mora County | 7.5208% |
| Otero County | 8.1875% |
| Quay County | 8.125% |
| Rio Arriba County | 8.8125% |
| Roosevelt County | 8.55% |
| San Juan County | 10.875% |
| San Miguel County | 8.1458% |
| Sandoval County | 8.0625% |
| Santa Fe County | 8.8125% |
| Sierra County | 8.375% |
| Socorro County | 7.5625% |
| Taos County | 9.4375% |
| Torrance County | 7.9375% |
| Union County | 7.875% |
| Valencia County | 8.425% |
The gross receipts tax applies to goods and services, with some exceptions. The most significant is the exemption for food. Food that is intended for immediate consumption (e.g. food ordered at a restaurant) is not exempt, however. Prescription drugs are also not exempt from gross receipts taxes in New Mexico.
New Mexico Property Tax
Property taxes in New Mexico go to support local governments and schools. The state’s average effective property tax rate (annual tax payments as a percentage of home value) is 0.63%, which is the 17th-lowest rate in the country. If you are thinking about buying a property in New Mexico or refinancing a mortgage, take a look at our New Mexico mortgage guide. It has everything you need to know about New Mexico’s mortgage rates and other mortgage-related details.
New Mexico Cigarette Tax
New Mexico’s cigarette tax stands at $2.00 per pack. That’s about average for cigarette taxes in the U.S. In addition to the cigarette tax, New Mexico also imposes the Tobacco Products Tax, which applies to the manufacture or purchase of other types of tobacco products. It is equal to 25% of the value of any tobacco product.
New Mexico Alcohol Tax
Excise taxes on alcohol in New Mexico vary depending on the type of beverage being sold. Hard liquor (vodka, whiskey, etc.) is taxed at a rate of $6.06 per gallon. Beer is taxed at a rate of 41 cents per gallon, or about 3.8 cents per 12 ounce beer. Wine is taxed at a rate of $1.70 per gallon.
New Mexico Estate Tax
New Mexico’s estate tax has been phased out as of Jan. 1, 2005. There is no estate or inheritance tax in New Mexico.