One of the states in the union without a state tax on food products is New Mexico. This means that in New Mexico, food items, including groceries, are exempt from the state sales tax. Local taxes, however, can still be applicable in some places.
The majority of products and services, including meals at restaurants, are subject to New Mexico’s gross receipts tax, which is comparable to a sales tax. Location-specific tax rates range from 5.125% to 9.375% depending on the municipality and county. As a result, New Mexico’s gross receipts tax applies to prepared food items such meals at restaurants or fast food businesses.
In addition to food items, New Mexico additionally exempts certain medical supplies, agricultural goods, and prescription pharmaceuticals from the gross receipts tax. Prosthetic devices, hearing aids, and other medical equipment are all exempt from taxation. Tax exemptions also apply to agricultural products like insecticides and fertilizers. Additionally, New Mexico does not impose taxes on prescription medications.
Certain categories of clothes and footwear priced under $100, as well as specific categories of school supplies, are also exempt from tax in New Mexico. In addition, New Mexico exempts some manufacturing-related apparatus and equipment from the gross receipts tax.
On the other hand, practically all goods and services that are not expressly exempt from gross receipts tax are taxable items in New Mexico. The majority of tangible personal property kinds are included in this, including electronics, furniture, and vehicles. In New Mexico, there is also a gross receipts tax on additional services like utilities, transportation, and construction.
In conclusion, New Mexico does not impose a state sales tax on purchases of food, while local taxes can still be imposed. Restaurant prepared food items are subject to the gross receipts tax, however other things including prescription drugs, agricultural products, and medical supplies are excluded from the tax. Certain articles of clothes, footwear, and school supplies, as well as machinery and equipment for manufacture, are tax-free in New Mexico. On the other hand, the majority of tangible personal goods and services that are not expressly exempt from gross receipts tax are taxed in New Mexico.
According to the Tax Foundation, New Mexico has the 23rd highest state tax burden in the union. However, tax rates and laws range between other tax types, including sales tax, income tax, property tax, and others. Therefore, while assessing the total tax burden in New Mexico, it is crucial to take into account the particular tax in question.