![]() A business with no physical location in New Mexico but with a resident representative considers the in-state location as the business headquarters. Businesses pay the applicable taxes via the online combined reporting system (CRS) portal, and TRD disburses local portions to each local entity.Ī business based in a municipality pays the municipality’s rate a business outside an incorporated municipality pays the county rate. TRD publishes site-specific GRT rates that itemize all state, local and special taxes being assessed (such as those for water districts or improvement districts). In most cases, the tax revenue benefits the municipality in which the business is physically based. In some municipalities, GRT revenues represent 70 to 85 percent of the budget in counties, it can account for 30 percent of revenue.Ī business ordinarily bases its GRT on the rate that applies to its physical base of operations, but many companies transact business online or in multiple places and thus register each site separately and pay different GRT rates. The state takes the bulk of GRT proceeds - 5.125 percent - to provide services the balance consists of “local options” taxes that counties, municipalities and special districts assess to underwrite public services such as police, fire, water and jails. A detailed explanation is available from the state Taxation and Revenue Department (TRD) ask for “Gross Receipts and Compensating Taxes: An Overview” (FYI-105). Some transactions are tax exempt, and some are deductible. GRT applies to the gross receipts of businesses or people who sell property, perform services, lease or license a property or franchise in New Mexico, and sell certain services delivered outside New Mexico when the resulting product is initially used here. Until lawmakers agree on an alternative system, businesses should know how to comply with the status quo. The combined tax rate in some towns is now - or is about to go over - 9 percent. Over the years, though, cities and counties have responded to reductions in local revenues caused by state-allowed exemptions and deductions by loading on their own assessments. GRT was intended to widen the tax base by taxing more items at a lower rate than would be typical in states with a sales tax. In New Mexico, the seller pays the tax on the sales price of a product or service even if the seller doesn’t collect it from the buyer - and even if the buyer lives out of state. In a nutshell, GRT is a substitute for the traditional sales tax that shoppers in other states pay when they make a purchase. If the number is 0.25 or greater, then your business can demonstrate a 25% decrease in revenue.New Mexico’s gross receipts tax is admittedly confusing, but the state still expects businesses to follow the law and pay what they owe from the sale of property or services. ![]() Subtract the gross receipts of any quarter of 2020 from gross receipts from the same quarter of 2019, and divide that amount by the gross receipts of your chosen quarter of 2019. Percentage decrease 25% OPTION 2 Compare quarterly gross receipts If the number is 0.25 or greater, then your business can demonstrate a 25% decrease in annual revenue. Subtract your 2020 gross receipts from your 2019 gross receipts, and divide that amount by your 2019 gross receipts. Gross receipts is the total amount of revenue your business has received or accrued in a given period. You should account for all gross receipts or revenue in whatever form received or accrued. Here’s how you can see if your business meets this requirement. OPTION 1 Compare annual gross receipts OPTION 2 Compare quarterly gross receipts FREQUENTLY ASKED QUESTIONSĪccording to SBA guidance, your business qualifies for a second PPP loan if it had at least a 25% decrease in revenue in a quarter in 2020 relative to a quarter in 2019 (or in the year 2020 as compared to 2019).
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