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The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity.
How does New Mexico’s tax code compare? New Mexico has a graduated individual income tax, with rates ranging from 1.70 percent to 5.90 percent. New Mexico also has a 4.8 percent to 5.9 percent corporate income tax rate. New Mexico has a 5.0 percent state sales tax rate, a max local sales tax rate of 4.313 percent, and an average combined state and local sales tax rate of 7.84 percent. New Mexico’s tax system ranks 28th overall on our 2022 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and New Mexico is no exception. The first step towards understanding New Mexico’s tax code is knowing the basics. How does New Mexico collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?