New Mexico has a graduated state individual income tax, with rates ranging from 1.50 percent to 5.90 percent. New Mexico has a flat 5.90 percent corporate income tax rate, a 4.88 percent state gross receipts tax rate, and an average combined state and local rate of 7.67 percent. New Mexico has a 0.63 percent effective property tax rate on owner-occupied housing value. New Mexico does not have an estate tax or inheritance tax. New Mexico’s gas tax is 18.88 cents per gallon, and its cigarette excise tax is $2.00 per pack of 20 cigarettes.
New Mexico raises tax revenue primarily through other taxes (37.4 percent of total state and local tax revenue), general sales taxes (32.5 percent), and individual income taxes (14.0 percent). New Mexico collects $8,953 in state and local tax collections per capita, carries $6,281 in state and local debt per capita, and has a 68 percent funded ratio of public pension plans. New Mexico’s tax system ranks 28th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and New Mexico is no exception. Use the tabs below to compare New Mexico taxes with other states and to see how New Mexico raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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As a rule, an individual’s income can be taxed both by the state in which the taxpayer resides and by the state in which the taxpayer’s income is earned.
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Forty-four states levy corporate income tax. Top rates range from a 2.25 percent flat rate in North Carolina to a 11.5 percent top marginal rate in New Jersey.
4 min read
Americans were on the move in 2024, and many chose low-tax states over high-tax ones.
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Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
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Tax avoidance is a natural consequence of tax policy. Policymakers should consider the unintended consequences, both to public health and public coffers, of the excise taxes and regulatory regimes for cigarettes and other nicotine products.
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Consumers legally wagered more than $100 billion on sporting contests in 2023, creating more than $1.8 billion in state revenue. Sports betting is now legal in 38 states and DC, and the landscape is rapidly evolving.
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Recent data suggest that tax competitiveness plays a significant role in residents’ relocation decisions.
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Growing cigarette tax levels and differentials have made cigarette smuggling both a national problem and a lucrative criminal enterprise.
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Over 500 million premium cigars were sold in the United States in 2023. With each sale comes a complex tax landscape.
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Policymakers can and should address taxpayers’ legitimate grievances about out-of-control property tax bills, but they should do so without upending a system of taxation that is more efficient, fair, and pro-growth, and better suited to municipal finance, than any of the alternatives.
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