Taxes

Summary of Business Taxes:

Corporate Income Tax
Low Rate 4.8%, Top Rate 7.6% (over $1 million of taxable income)

Franchise Tax
$50 each year (corporation included in a return and engaging in business in New Mexico)

Real Property Tax
Property assessed at 33.3% market value. Local mil rate then applied (range from 17 mils to 39 mils for nonresidential property)

Personal Property Tax
Same as Real Property

Gross Receipts (Sales) Tax
State rate 5%. Also, local government may assess an additional 1.9375% tax. This tax applied to most sales including services.

Unemployment Compensation
Initial rate 2.7% rate of 1st $12,600 of employee’s pay. Rates reduced by experience factor.

Workers Compensation
1995 calculated loss ratio, 28.8% (lowest in the nation)

Inventory
Not taxed for property purposes

Motor Vehicles
Vehicles with a gross weight of over 26,000 lbs. Pay a weight distance (ton-mile) tax of 3 cents per mile.

Industrial Fuels and Raw Materials Used in Manufacturing
Exempt from gross receipts tax

1999 Property Tax Mil Rate in Gallup and McKinley County

Gallup residential:
30.172 – generated $3,516,449.29 in ’98

Gallup nonresidential:
39.223 – generated $3,955,549.54 in ’98

McKinley County residential:
23.565 – generated $690,008.17 in ’98

McKinley County nonresidential:
30.315 – generated $9,553,010.98 in ’98

Zuni residential:
17.388

Zuni nonresidential:
24.250

New Mexico creates a favorable tax environment for business by providing a number of tax exemptions, credits, and incentives for corporations moving into the state.

Sales and Use Taxes

Gallup 1999 Gross Tax Receipts Tax rate: 6.1875
McKinley County 1999 Gross Receipts Tax rate: 5.625

For more information regarding state taxes, contact:

Taxation and Revenue Department
P.O. Box 630
Santa Fe, New Mexico 87504

or for specific tax information contact a New Mexico accountant.