The New Mexico (NM) state sales tax rate is currently 5.125%, ranking 32nd-highest in the U.S. Depending on local municipalities, the total tax rate can be as high as 9.0625%. The average local rate is 2.65%. The average combined tax rate is 7.775%, ranking 15th in the US.

New Mexico has gross receipts and compensating taxes which are equivalent to sales and use taxes. Although the gross receipts tax is imposed on businesses, it is common for a business to pass the gross receipts tax on to the purchaser either by separately stating it on the invoice or by combining the tax with the selling price. The gross receipts tax rate is a combination of the rates imposed by state/counties/municipalities. Changes to the tax rates may occur twice a year in January or July.

Compensating tax is due for purchases from out-of-state business not subject to gross receipts tax.

Local taxes do not apply to inter-state transactions.

In New Mexico, qualifying food sales at retail food stores are not taxed. Sale of prescription drugs and oxygen and oxygen services are considered to be exempt.

New Mexico has two tax holidays: Annual Back to School Tax Free Holiday (Aug 3-5, 2018) during which period clothing or shoes under $100, computers or tablets under $1000, computer hardware under $500, and school supplies under $30 per unit are tax free; Small Business Tax Holiday which runs for 24 hours on the first Saturday after Thanksgiving. During this period small businesses will not be liable for tax on retail sales of certain merchandise priced at less than $500.