Personal Income Tax in New Mexico

April 13, 2006

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If you are a resident or nonresident of New Mexico and receive taxable income individually from property owned or business transacted in New Mexico, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to a personal income tax on your business income that passes through to you.

The following rates apply for the 2006 and 2007 tax years to the amount of income over the exempted amount:

Single Individuals, Estates and Trusts
Taxable Income	Amount of Tax
Not over $5,500	1.7% of taxable income
Over $5,500, but not over $11,000	$93.50 plus 3.2% of excess over $5,500
Over $11,000, but not over $16,000	$269.50 plus 4.7% of excess over $11,000
Over $16,000	$504.50 plus 5.3% of excess over $16,000

Heads of Household, Surviving Spouses and Married Individuals Filing Jointly
Taxable Income	Amount of Tax
Not over $8,000	1.7% of taxable income
Over $8,000, but not over $16,000	$136 plus 3.2% of excess over $8,000
Over $16,000, but not over $24,000	$392 plus 4.7% of excess over $16,000
Over $24,000	$768 plus 5.3% of excess over $24,000

Married Individuals Filing Separately
Taxable Income	Amount of Tax
Not over $4,000	1.7% of taxable income
Over $4,000, but not over $8,000	$68 plus 3.2% of excess over $4,000
Over $8,000, but not over $12,000	$196 plus 4.7% of excess over $8,000
Over $12,000	$384 plus 5.3% of excess over $12,000

If your only activity in New Mexico is making sales and you do not own or rent real estate in the state you may be eligible to pay an alternative tax. Your sales in New Mexico must not exceed $100,000 to be eligible for the alternative tax. Your alternative tax (instead of the regular personal income tax) is 0.75 percent of gross receipts from sales in or into the state.