The city or county where the purchase is made determines the tax rate that applies to food in New Mexico. The gross receipts tax rate is 5.125% in the majority of cities and counties, however it is 7.875% in Albuquerque. There are a few exceptions to the norm, though. For instance, the New Mexico Department of Taxation and Revenue has approved grocery stores or supermarkets, so purchases made there are taxed at a lower rate of 1.75%. What Goods in New Mexico Are Exempt from Sales Tax?
Some goods are free from sales tax in New Mexico. These products include prescription medicines, medical equipment, and food bought using WIC or food stamps. Additionally, some services like medical, legal, and educational services are exempt from sales tax. Which States Tax Groceries and Which Don’t?
Five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not impose a sales tax on food. Customers can buy food products tax-free in these states since there is no sales tax on groceries. What Does Tax-Free Mean in New Mexico? Throughout the year, New Mexico has a few days that are tax-free. Back-to-school supplies, computers, and energy-efficient appliances are among the things that are free from the gross receipts tax over these holidays. Additionally, some organizations—such as nonprofits, churches, and philanthropic organizations—are free from the gross receipts tax.
In conclusion, one of the few states that tax food is New Mexico. Most food goods purchased for consumption off-premises are subject to a gross receipts tax by the state, with different tax rates applied depending on where the transaction was made. The New Mexico Department of Taxation and Revenue-approved supermarkets and grocery stores are a few of the exceptions to the general rule. In addition to a few tax-free holidays throughout the year, New Mexico exempts some goods and services from sales tax.