Jul 30th, 2007 by New Mexico Real Estate
1. What is the property tax rate in New Mexico?
Rates vary substantially and depend on property type and location. The statewide weighted average rates, i.e., total obligations/total net taxable value, are about $26.47 per $1,000 for residential property and $29.80 per $1,000 for non-residential property. Taxable value is one-third of assessed value (see below). NOTE: These property tax rates are for the 2005 tax year.
2. How is taxable value of property determined?
New Mexico assesses residences at market value. Assessors usually determine market value by the salescomparison approach which matches a property’s value to that of similar properties. One-third of that amount is the taxable value, but taxable value may be further reduced by exemptions of $2,000 each for heads of household. The exemption for veterans is $4,000 for the 2006 tax year. Veterans who are totally and permanently disabled and who have remodeled their residences may qualify for a total exemption from property tax. Beginning in 2001, the assessed value of a residence that did not change hands in the prior year may not increase by more than 3% annually (excluding any increase due to physical changes to the property). This covers rental properties as well as owner-occupied residences.
3. Is personal property taxed?
In general, no. Personal household effects, licensed vehicles, registered aircraft, certain personal property warehoused in the state, and business personal property not depreciated for federal income tax purposes are exempt from the property tax. Business personal property for which the owner has claimed depreciation is taxable.
4. Is there a property tax break for older taxpayers?
Yes. This rebate may be claimed annually on the personal income tax return. To qualify for the Property Tax Rebate, you must:
* be age 65 or older;
* have been a resident of New Mexico on the last day of the tax year;
* have been physically present in New Mexico for at least six months during the tax year;
* have had a modified gross income of $16,000 or less for the tax year;
* not have been claimed as a dependent of another taxpayer for that year, and
• not have been an inmate of a penal institution for more than six months during the previous tax year.
The property tax rebate may be claimed on form PIT-1-RC for the property tax billed or rent paid during thetax year on the claimant’s principal place of residence in New Mexico. The rebate may not exceed $250 for married taxpayers filing jointly ($125 for married taxpayers filing separately or single taxpayers). Beginning with the 2001 property tax year the valuation of a single-family, owner-occupied residence whose owner is 65 years of age or older and who has a modified gross income of $18,000 or less cannot climb higher than its year 2001 valuation or its valuation in the year the owner reached his or her 65th birthday.
For more informationwww.tax.state.nm.us
Gross Receipts Taxes
1. What is New Mexico’s sales tax rate?
New Mexico does not have a sales tax. It has a gross receipts tax instead. This tax is imposed on persons engaged in business in New Mexico. The person engaged in business usually recovers the tax cost from the consumer by adding the tax as a separate charge.
2. What is the gross receipts tax rate?
The statewide rate is 5%, but county and municipal governments can and do impose local gross receipts taxes over the state rate of 5% to pay for police and fire protection and other services that benefit the business. The tax rate therefore varies by location and currently ranges from 5.125% to 7.1875%. To determine a specific tax rate please request the semi-annual Gross Receipts Tax Rate Schedule at any of the local tax offices. The rate schedule is also available on our web site at http://www.tax.state.nm.us.
3.What is taxable?
Generally speaking, sales and leases of goods and other tangible property are taxable. Groceries, magazines and clothing are taxable, but sales of prescription drugs are not. New Mexico also taxes sales of services performed in New Mexico. All transactions are presumed taxable to the business unless a specific exemption or deduction applies.
Income Taxes and Related Taxes
1. Does New Mexico have a personal income tax?
Yes. New Mexico imposes a tax on the net income of every resident. Residents are taxed on the net income from employment, unearned income, gambling, pensions, annuities, and income from real or personal property in this state or from businesses located in this state. Non-residents are taxed on the net income from property, employment or business in New Mexico.
New Mexico%uFFFDs personal income tax “piggybacks” on the federal return and uses the federal adjusted gross income figure as its base. Net income usually equals federal taxable income, although some special deductions are available. New Mexico uses the same dollar amounts as the federal government for personal exemptions, standard deductions and itemized deductions.
2. What is New Mexico’s personal income tax rate?
New Mexico has a graduated rate table with seven brackets ranging from 1.7% to 8.2% of taxable income. The following income tax rates are valid through the 2000 tax year:
A. For married individuals filing separate returns:
If the taxable income is: The tax shall be:
Not over $4,000
1.7% of taxable income
Over $ 4,000 but not over $ 8,000
$ 68.00 plus 3.2% of excess over $ 4,000
Over $ 8,000 but not over $12,000
$ 196 plus 4.7% of excess over $ 8,000
Over $12,000 but not over $20,000
$ 384 plus 6.0% of excess over $ 12,000
Over $20,000 but not over $32,000
$ 864 plus 7.1% of excess over $ 20,000
Over $32,000 but not over $50,000
$ 1,716 plus 7.9% of excess over $ 32,000
Over $50,000
$ 3,138 plus 8.2% of excess over $ 50,000.
B. For surviving spouses and married individuals filing joint returns:
If the taxable income is: The tax shall be:
Not over $ 8,000
1.7% of taxable income
Over $ 8,000 but not over
$16,000 $ 136 plus 3.2% of excess over $ 8,000
Over $16,000 but not over $24,000
$ 392 plus 4.7% of excess over $ 16,000
Over $24,000 but not over $40,000
$ 768 plus 6.0% of excess over $ 24,000
Over $40,000 but not over $64,000
$ 1,728 plus 7.1% of excess over $ 40,000
Over $64,000 but not over $100,000
$ 3,432 plus 7.9% of excess over $ 64,000
Over $100,000
C. For single individuals and for estates and trusts:
If the taxable income is: The tax shall be:
Not over $5,500
1.7% of taxable income
Over $ 5,500 but not over $11,000
$ 93.50 plus 3.2% of excess over $ 5,500
Over $11,000 but not over $16,000
$ 269.50 plus 4.7% of excess over $ 11,000
Over $16,000 but not over $26,000
$ 504.50 plus 6.0% of excess over $ 16,000
Over $26,000 but not over $42,000
$ 1,104.50 plus 7.1% of excess over $ 26,000
Over $42,000 but not over $65,000
$ 2,240.50 plus 7.9% of excess over $ 42,000
Over $65,000
$ 4,057.50 plus 8.2% of excess over $ 65,000.
D. For heads of household filing returns:
If the taxable income is: The tax shall be:
Not over $7,000
1.7% of taxable income
Over $ 7,000 but not over $14,000
$ 119 plus 3.2% of excess over $ 7,000
Over $14,000 but not over $20,000
$ 343 plus 4.7% of excess over $ 14,000
Over $20,000 but not over $33,000
$ 625 plus 6.0% of excess over $ 20,000
Over $33,000 but not over $53,000
$ 1,405 plus 7.1% of excess over $ 33,000
Over $53,000 but not over $83,000
$ 2,825 plus 7.9% of excess over $ 53,000
Over $83,000
$ 5,195 plus 8.2% of excess over $ 83,000.
Who is required to file?
Two situations require you to file personal income tax returns in New Mexico:
1) If you are required to file a federal tax return with the IRS and you are a New Mexico resident, or
2) If you are required to file a federal income tax return with the IRS and you are a nonresident with income or loss from New Mexico sources.
How do I determine if I’m a resident or a nonresident?
In general your domicile is the place you intend to be your permanent home or the state where your permanent home is located. It is the home to which you intend to return when you are away on vacation, business, educational leave, military assignment, Peace Corps service or some other temporary absence. A resident is an individual domiciled in New Mexico at the end of the tax year, whether or not the individual was physically present. Residents include:
* military personnel who were residents of New Mexico at the time they entered military service or who established New Mexico residence by choice, no matter where they were stationed during the tax year;
* anyone married to a New Mexico resident but who lives in another state, provided the couple intends to make New Mexico its place of residence;
* any person registered to vote in New Mexico who has not subsequently registered to vote elsewhere, and
* any person holding a currently valid New Mexico driver’s license.
* A nonresident is an individual who was not domiciled in New Mexico at the end of the tax year or who moved out of New Mexico on or before the last day of the tax year intending to reside permanently outside New Mexico. Nonresidents are:
* military personnel and other individuals who are not New Mexico residents but who are temporarily in New Mexico, and
* any person married to a nonresident but who is living temporarily in New Mexico.
