New Mexico Gross Receipts Tax for Service Businesses and Remote Sellers: CRS Registration, Destination Sourcing and the TRD-41413 Return

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New Mexico gross receipts tax for service businesses and remote sellers: CRS registration, destination sourcing, and how to file the TRD-41413 return.

Most states tax the sale of goods and leave most services alone. New Mexico does it the other way around. Its gross receipts tax (GRT) applies to selling property, leasing it, and performing services, and the tax is imposed on the business, not the buyer. That's why consultants, contractors, designers, cleaners and software sellers who've never collected sales tax anywhere else end up owing it in New Mexico.

This guide explains who owes GRT, how to register, how to pick the right location and rate (the part most businesses get wrong), how professional services are treated, and what to watch if you sell into New Mexico from another state. We use examples from Albuquerque, Santa Fe and Las Cruces, NM, because the rate changes from one to the next.

The sources are the New Mexico Taxation and Revenue Department's Gross Receipts Tax Overview and its publication FYI-200, Gross Receipts Reporting Location and the Appropriate Tax Rate (revised July 2025).

What the gross receipts tax covers

The Department says gross receipts are the total money or other value a business receives from:

  • selling property in New Mexico,
  • leasing or licensing property used in New Mexico,
  • granting a right to use a franchise used in New Mexico,
  • performing services in New Mexico, and performing services outside New Mexico whose product is initially used in New Mexico, and
  • selling research and development services performed outside the state whose product is initially used in New Mexico.

Three points follow from that list.

It's a tax on the business. GRT is imposed on the seller. It's common to pass it on to the customer, but if you do, the Department requires it to be separately stated on the invoice.

Services are in. A web designer in Albuquerque, a plumber in Rio Rancho, an IT contractor in Santa Fe and a marketing consultant working for a Las Cruces client are all in the base unless a specific exemption or deduction applies.

Business expenses don't reduce it. The Department's FAQ is direct about this: there are no deductions for business expenses. GRT is figured on receipts, not profit. Deductions that do exist are for specific kinds of receipts (for example, certain sales for resale), and some of them require a non-taxable transaction certificate (NTTC) from the buyer, though not all.

Remote sellers and the $100,000 threshold

You don't need an office in New Mexico to owe GRT. Businesses without a physical presence, including marketplace providers and sellers, are subject to GRT if they had at least $100,000 of taxable gross receipts in New Mexico in the previous calendar year.

FYI-200 says that test has applied since July 1, 2019, and that it counts receipts from sales, leases and licenses of tangible property, sales of licenses, and sales of services and licenses for use of real property sourced to New Mexico. Once a business meets it, it reports GRT under the same location rules as a business with a physical presence.

That matters for service firms outside the state. A Denver agency or an Austin bookkeeping firm with New Mexico clients counts the receipts from services whose product is delivered there, and once those pass $100,000 for a calendar year, it has a New Mexico filing obligation for the next year.

Registering: TAP and your CRS ID

Businesses register with the Taxation and Revenue Department, usually online through the Taxpayer Access Point (TAP). Registration gives you a Combined Reporting System (CRS) identification number, which is the account number you'll use on GRT returns and for withholding. The Department points new businesses to FYI-102, Information for New Businesses, which is worth reading before your first return.

Register before you start taxable activity. If you've already been doing business in New Mexico without filing, see the section on fixing past returns below.

The return: TRD-41413

GRT is reported on the Gross Receipts Tax Return, Form TRD-41413, and the Department recommends filing it electronically through TAP. The return is due by the 25th of the month after the end of the reporting period. The Department sets each account's filing frequency (monthly, quarterly or semiannual), so check yours in TAP rather than guessing.

On the return, each line is one reporting location. FYI-200 describes the layout: you enter the location code, the gross receipts, the deductible receipts, the taxable gross receipts, and the tax rate in effect at that location, and the return computes the tax due for that line. A business that serves customers in several cities can have several lines on every return.

Location codes and rates: destination sourcing

This is where GRT differs from a simple sales tax, and where most filing mistakes happen.

The total GRT rate combines the state rate with county and municipal increments. The state portion is 4.875%, and combined rates in different locations run from that up to 10.8125%, according to the Department's FYI-105 (revised August 2025). Each location has its own code and rate in the Department's rate schedule and on its location code and tax rate map, where you can enter an address.

For filing periods starting on or after July 1, 2021, New Mexico uses destination sourcing. With important exceptions, FYI-200 says the reporting location is generally not where the seller is, but where the property is delivered, where the services are performed, or where the product of the service is delivered.

The main rules from FYI-200:

  • Goods picked up at your location: sourced to your location.
  • Goods delivered elsewhere: sourced to the delivery location the buyer gives you. If you don't have delivery instructions, use the buyer's address from your records, then the address from the sale (such as a payment address), and only as a last resort the location you shipped from.
  • Real property: sourced to where the property is.
  • Leased equipment and vehicles: sourced to where the property is primarily used.
  • Most services: sourced to where the product of the service is delivered.
  • Construction services: sourced to the construction site.

One warning in FYI-200 is easy to miss: a seller isn't treated as lacking information if it had access to the buyer's location and simply didn't keep it. So the "shipped from" fallback isn't a safe default. Keep customer addresses in your invoicing system.

Rate changes. Before July 1, 2025, rates could change in January and July. Under 2025 House Bill 218, rates now change only on July 1, except in limited cases such as a declared emergency. That means one rate schedule per year to update in your billing software, each July.

Professional services follow a different rule

FYI-200 carves out "professional services." For these, the reporting location is where the service is performed, not where the product is delivered. That applies whether the work is done in New Mexico or done outside the state with the product initially used in New Mexico. Professional services performed outside New Mexico but taxable there are reported using the out-of-state rate.

A professional service, under the statute FYI-200 cites, is one that requires an advanced degree (a master's degree or higher) or a state license to perform, other than in-person and construction-related services. Two details:

  • Having a master's degree isn't enough. If the degree wasn't required for the work, it isn't a professional service.
  • If the work requires a state license, it's a professional service whether or not the person has a degree.

FYI-200 lists accounting, auditing and tax preparation, legal services, and real estate appraisal as examples that generally aren't in-person services. Architecture and engineering are usually professional services too, but when billed to a construction project they become construction-related and are sourced to the site.

In-person services are the other exception. Healthcare, mental health services usually provided in person, physical therapy, barbering and cosmetology, and home healthcare are sourced to where the customer is served. A telehealth visit is still an in-person service and is sourced to the patient's location.

Online services follow the same rules as offline ones. The type of service decides the location, not the fact that it's delivered over the internet.

Worked examples

A Santa Fe, NM marketing consultant. The consultant has no advanced-degree or license requirement for the work, so it isn't a professional service. For a client in Albuquerque, the product of the service (the campaign, the strategy deck) is delivered in Albuquerque, so the receipts go on the Albuquerque location line at that rate, not the Santa Fe rate.

A licensed engineer in Albuquerque, NM. Engineering requires a state license, so ordinary engineering consulting is a professional service, reported at the location where the engineer performs the work. If the same engineer's fees are billed to a construction project in Las Cruces, they become construction-related services and go on the Las Cruces construction-site line.

An out-of-state software and services firm. A company in Phoenix sells implementation services to New Mexico businesses. In 2025 its New Mexico-sourced receipts reached $140,000. Because that's over $100,000 in the prior calendar year, it registers for 2026, gets a CRS ID, and reports each client's receipts at the client's location code. Its non-New Mexico receipts aren't on the return at all.

Fixing past returns

If you're new to GRT and think you filed incorrectly, or never filed, the Department's FAQ points to two paths. You can file amended returns and pay the extra tax (and request a refund where you overpaid). Or you may qualify for a managed audit, a Department program where the business reviews its own records under an agreement with the Department. The Department suggests it as an option when you owe more than you thought or want to be sure about your liability going forward.

Sorting out the right location code for each past sale is usually the slow part, which is another reason to fix your invoicing records first.

Setup checklist for a New Mexico service business

  1. Register in TAP and get your CRS ID before your first taxable sale.
  2. Decide, for each service you sell, whether it's a professional service, an in-person service, a construction service, or other. Write it down; it controls the location code.
  3. Store every customer's delivery or service address in your invoicing system.
  4. Add the location codes and rates for your usual customer locations, and update them every July 1.
  5. If you pass GRT on, show it as a separate line on the invoice.
  6. Book GRT collected in a liability account, reconcile it each period, and file TRD-41413 by the 25th of the month after the period.
  7. Collect NTTCs where a deduction requires one, and keep them with the sale.
  8. For remote sellers, track New Mexico-sourced receipts monthly so you know when the $100,000 test is met.

Where to check the rules

This guide is general information about New Mexico's gross receipts tax as of October 2026, for tax year 2026 filing periods, and it isn't tax advice for your situation. Rates change every July 1, and deductions depend on specific facts, so check the current Filer's Kit before you file.

How RKube can help

We do bookkeeping and tax prep for small businesses across the US, including New Mexico service firms and out-of-state companies with New Mexico customers. We set up location codes in your invoicing, reconcile GRT each period, and prepare the TRD-41413 returns on time. If you'd like a review of how you're sourcing your New Mexico receipts, book a free scoping call and ask about our free 30-day trial, or call us at (984) 234-7030.

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