How does New Mexico’s tax code compare? New Mexico has a graduated state individual income tax, with rates ranging from 1.50 percent to 5.90 percent. New Mexico has a 5.9 percent corporate income tax rate. New Mexico also has a 4.75 percent state sales tax rate and an average combined state and local sales tax rate of 7.67 percent. New Mexico has a 0.61 percent effective property tax rate on owner-occupied housing value.
New Mexico does not have an estate tax or inheritance tax. New Mexico has an 18.88 cents per gallon gas tax rate and a $2.00 cigarette excise tax rate (per pack of 20 cigarettes). The State of New Mexico collects $7,752 in state and local tax collections per capita. New Mexico has $6,002 in state and local debt per capita and a 68 percent funded ratio of public pension plans. New Mexico’s tax system ranks 28th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and New Mexico is no exception. The first step toward understanding New Mexico’s tax code is knowing the basics. How does New Mexico collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2025: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
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Forty-four states levy a corporate income tax, with top rates ranging from a 2.25 percent flat rate in North Carolina to a 11.5 percent top marginal rate in New Jersey.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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In the spirit of change and improvement, it’s worth looking back to see which states have truly embraced tax competitiveness since 2020, and which ones have lagged behind.
6 min read
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122 min read
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The past four years have brought significant focus on state income tax reform and relief, and with that, something of a flat tax revolution.
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Wireless consumers continue to be burdened with high taxes, fees, and government surcharges in many states and localities throughout the country.
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