According to a recent report from the Tax Foundation, New Mexico has the 16th highest combined state and federal “sales” tax. I use the parentheses advisedly knowing full well that New Mexico does not have a sales tax, but has a much more onerous gross receipts tax.
So, to say that New Mexico has the 16th-highest sales tax rate is accurate insofar as it goes, but our state taxes a lot of inputs that other states don’t tax. Gov. Martinez and the Legislature adopted some carve-outs this session, but as I wrote in this article, the gross receipts tax is a tricky tax to reform.
Instead, we’d like to see the tax restored to the low, flat, fair, “tax everything,” philosophy that could see rates as low as 3% and focus instead on reducing and/or eliminating the personal and corporate income taxes.