Distilled Spirits Taxes by State, 2026
The significant disparity in tax rates across states underscores the complex tax and regulatory environment governing distilled spirits.
9 min read
New Mexico | #28 Overall
New Mexico has a graduated state individual income tax with a top rate of 5.9 percent. A new lower-rate bracket was created in 2025, though the top rate was left untouched. Also in 2025, New Mexico replaced its graduated-rate corporate income tax with a top rate of 5.9 percent to a single-rate tax of 5.9 percent on all income, a relatively rare case of a corporate income tax rate increase in recent years.
New Mexico also has a 4.875 percent tax on sales, with an average combined state and local rate of 7.67 percent. As a hybrid between an ordinary sales tax and a gross receipts tax, this tax does not apply to all intermediate transactions like a pure gross receipts tax but does apply to many more business inputs than are included in a typical sales tax, including manufacturing machinery and research and development (R&D) equipment. When this gross receipts-like tax applies to business-to-business transactions, it causes tax pyramiding throughout the supply chain, hampers investment, and negatively affects low-margin businesses.
The state’s corporate income tax also features a throwback rule, which exposes in-state businesses to additional tax when they sell into other states with which they do not have nexus, discouraging some businesses from locating operations in New Mexico. The state conforms to the federal treatment of capital investment under its corporate income tax.
| Category | Rank | Rank Change | Score |
|---|---|---|---|
| Overall | 28 | -2 | 5.09 |
| Corporate Taxes | 23 | 1 | 5.38 |
| Individual Income Taxes | 37 | -1 | 4.75 |
| Sales Taxes | 38 | 1 | 4.14 |
| Property Taxes | 1 | 1 | 6.56 |
| Unemployment Insurance Taxes | 17 | -1 | 5.38 |
- Learn more about New Mexico Taxes
-
Share your state results
Compare Neighboring States
Tax Data by State
Get facts about taxes in your state and around the US
More on New Mexico
State and Local Tax Collections Per Capita by State, 2026
Tax collections vary widely by state, making per capita collections figures—a measure of collections per person—especially useful, as they allow comparisons across differences in tax rates and bases, economic capacities, and policy decisions that impact the size and scope of government.
5 min read
Renting a Car? Half Your Bill May Be Taxes and Fees
Rental cars are some of the most heavily taxed transactions in the US. Rather than levying additional taxes on rental cars by trying to export the tax burden to nonresidents, municipalities should enact principled, neutral transportation tax policy that is unlikely to discourage visitors, tourists, and other economic activity.
5 min read