Competitive Business Climate
Improvements to New Mexico’s tax climate have been recognized by Kiplinger, Ernst & Young, and the Tax Foundation. The state recently phased down its maximum corporate income tax rate to 5.9% and enacted a single sales factor apportionment methodology for manufacturers.
- New Mexico does not tax property-in-transit through the state or warehoused for delivery out-of-state
- No inventory tax
- No gross receipts tax on consumables used in manufacturing, including electricity and natural gas
- No intangible property tax
- No tax on real estate transactions
- Lowest property tax in the nation
- Single sales factor apportionment methodology for manufacturers
- No estate, inheritance or gift taxes
A comparison of regional states from the 2020 State Business Tax Climate, published by the Tax Foundation, is shown below.
| Overall State Business Climate Ranking | Maximum CIT Rate | Maximum PIT Rate | |
|---|---|---|---|
| New Mexico | 22 | 5.9% | 4.9% |
| Arizona | 20 | 4.9% | 4.54% |
| California | 48 | 8.84% | 13.3% |
| Colorado | 17 | 4.63% | 4.63% |
| Oklahoma | 27 | 6% | 5% |
| Nevada | 7 | None | None |
| Texas | 13 | None | None |
| Utah | 9 | 4.95% | 4.95% |
| State Sales Tax Rate | Property Tax - Collections Per Capita | |
| New Mexico | 5.125% | $768 |
| Arizona | 5.6% | $1,062 |
| California | 7.25% | $1,559 |
| Colorado | 2.9% | $1,425 |
| Oklahoma | 4.5% | $699 |
| Nevada | 6.85% | $994 |
| Texas | 6.25% | $1,762 |
| Utah | 6.1% | $1,019 |