It’s crucial to take into account the sales tax that will be added to the purchase price when purchasing an automobile in New Mexico. In New Mexico, the sales tax rate for an automobile is 4.0625%. State and local taxes are included in this price. There are a few exceptions to this rule, though. For instance, the tax will only be charged on the difference between the trade-in value and the purchase price of the new car if you trade in your old vehicle. Additionally, even if you buy a car outside of New Mexico and bring it there, you still have to pay the vehicle’s sales tax.
You might be wondering what products are tax-free in New Mexico except the sales tax on automobiles. Generally speaking, groceries, meat, dairy, and vegetables are all excluded from sales tax. Medical supplies and prescription medications are also free from sales tax. Additionally, the majority of services, including consulting, accounting, and legal services, are exempt from sales tax.
In New Mexico, not all goods are free from paying sales tax. Clothing items costing $100 or more, tobacco products, and alcoholic beverages are a few items that are subject to sales tax. In addition, some services, like telephones and hotel stays, are subject to sales tax.
The state of New Mexico is regarded as having a rather high tax burden overall. The personal income tax rate in New Mexico ranges from 4.9% to 5.9%, depending on income level, in addition to the sales tax. County-specific property taxes are also imposed by the state. However, there is neither an estate tax nor an inheritance tax in New Mexico.
New Mexico does offer certain tax benefits despite being regarded as a high tax state. For instance, the state’s 8.4375% relatively low excise tax rate is lower than those of several other states. A tax credit is also available in New Mexico for people and businesses who invest in specific kinds of businesses.
Overall, even though New Mexico’s car sales tax may seem excessive, it’s crucial to take into account the numerous tax benefits and exemptions the state provides. It’s crucial to do your homework and comprehend the tax repercussions in New Mexico before making a transaction.