New Mexico

The Facts on New Mexico's Tax Climate

Here are some basic facts on New Mexico's tax system and how it compares to other states:

Tax Freedom Day Arrives on March 31 in New Mexico
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, New Mexico taxpayers work until March 31, ranking it 45th highest in the nation. That is 12 days earlier than the national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states are: Utah, April 10 (ranked 19th), Arizona, April 2 (ranked 29th), Texas, April 7 (ranked 25th) Oklahoma, April 2nd (ranked 41st) and Colorado, April 8 (ranked 24th).
Full study of Tax Freedom Day, nationwide and in each state

New Mexico's State and Local Tax Burden Below Average
New Mexico's state and local tax burden percentage has ranked among the nation's lowest, currently estimated at 8.4% of income (41st nationally), below the current national average of 9.8%. Compared to the 1977 data, New Mexico had a rate of 8.8% (41st nationally), decreasing 0.4% overall. Currently residents pay $2,997 per capita in state and local taxes.
New Mexico's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009

New Mexico's 2012 Business Tax Climate Ranks 38th
New Mexico ranks 38th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: Utah (10th), Arizona (27th), Texas (9th), Oklahoma (33rd) and Colorado (16th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study)

New Mexico's Individual Income Tax System
New Mexico's personal income tax system consists of four brackets and a top rate of 4.9%, kicking in at an income level of $16,000. Among states levying personal income taxes, New Mexico's top rate is 36th highest nationally. New Mexico's 2008 state-level individual income tax collections were $614 per person, which ranked 38th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

New Mexico's Corporate Income Tax System
New Mexico's corporate tax structure consists of three brackets, with a top rate of 7.6% kicking in at $1,000,000 of net income. Among states levying corporate income taxes, this top tax rate ranks New Mexico 20th highest nationally. In 2008, state-level corporate tax collections (excluding local taxes) were $179 per capita, which ranked 13th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

New Mexico Sales and Excise Taxes
New Mexico levies a 5.375% general sales or use tax on consumers, which is below the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $1,789 per person, ranking 8th highest nationally. New Mexico's gasoline tax stands at 18.8 cents per gallon and ranks 42nd highest nationally. New Mexico's cigarette tax stands at $0.91 per pack of twenty, which ranks 30th highest nationally. The sales tax was adopted in 1933, the gasoline tax in 1919 and the cigarette tax in 1943.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita

New Mexico Property Taxes: Among the Nation's Lowest
New Mexico is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. New Mexico's localities collected $465.86 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, New Mexico collected $28.66 per capita in property taxes during FY 2006, making its combined state/local property taxes $494.52 per capita, ranking 48th highest nationally..
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: New Mexico Benefits More Than Any Other State
New Mexico taxpayers receive more federal funding per dollar of federal taxes paid than any other state. Per dollar of Federal tax collected in 2005, New Mexico citizens received approximately $2.03 in the way of federal spending. This represents an increase from 1995, when New Mexico received $1.85 per dollar of taxes in federal spending (also ranked highest). Neighboring states and the amount of federal spending received per dollar of federal taxes collected were: of Utah ($1.07), Arizona ($1.19), Texas ($0.94), Oklahoma ($1.36), and Colorado ($0.81).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

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