New Mexico

New Mexico's personal income tax schedule has seven brackets ranging from 1.7% (up to $5,500 of taxable income) to 8.2% (above $65,000). The corporate tax rate has three brackets, ranging from 4.8% on the first $500,000 of net income to 7.6% on net income above $1 million. The same rates apply to financial institutions. The state of New Mexico levies a gross receipts tax on goods and a broad range of services of 5%, with additional local rates ranging from 0.125% to 2.25%. The state also imposes a full array of excise taxes covering motor fuels, tobacco products, insurance premiums, public utilities, alcoholic beverages, amusements, pari-mutuels, and other selected items. New Mexico's estate tax is tied to the federal exemption for state death taxes, and is therefore set to be phased out in tandem with the phasing out of the federal estate tax credit by 2007 unless the state takes positive action to preserve an estate tax. New Mexico's revenue losses from the phasing out of its inheritance tax are estimated at -$7.5 million for 2002/03, -$12 million for 2003/04 and -$20 million for 2006/07. Death and gift taxes accounted for 0.5% of state collections in 2002. A larger source of state revenues is severance and conservation taxes imposed on oil and gas production, and at various rates on other substances. Other state taxes include license and franchise fees, and state property taxes. There are local property and sales taxes, but tax collection is highly centralized in New Mexico with three-quarters of total non-federal tax revenue collected at the state level.

The state collected $3.638 billion in taxes in 2002 (down from $4 billion in 2001), of which 36.9% came from the general sales tax, 27.1% from individual income taxes, 13.4% from selective sales taxes, 12.5% from severance taxes, 4.7% from license fees, 3.4% from corporate income taxes, and 1.4% from state property taxes. In 2003, New Mexico ranked 21st among the states in terms of combined state and local tax burden, which amounted to about 9.7% of income.

The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.