Home New mexico tax New Mexico’s tax holiday compared to other states

New Mexico’s tax holiday compared to other states

0

ALBUQUERQUE, NM (KRQE) – New Mexico is ready to help students get back to school with a tax-free weekend. It’s an event the State Department of Taxation and Revenue calls “nothing less than a windfall,” but not everything is tax-exempt. So how do our tax rebates compare to other states?

The Institute on Taxation and Economic Policy (ITEP), a nonprofit, nonpartisan organization that studies tax policy, has compiled a list of each state’s tax exemptions. And it shows that some states offer much more generous tax-free offers.

In New Mexico, the tax-free weekend runs from August 5, 2022 at 12:01 a.m. to August 7, 2022 at midnight. During this period, clothing and footwear priced under $100, computers priced under or equal to $1,000, and general school supplies priced under $30 are all exempt from tax. gross receipts tax, according to the Department of Taxes and Revenue.

Gross receipts tax is the tax that businesses must pay (i.e. it is not the sales tax that consumers pay). New Mexico uses a gross receipts tax exemption because the state does not have a sales tax. But the idea is that the companies will pass the savings on to you.

But there are clearly limits in New Mexico. For example, a $2,000 computer does not qualify because it exceeds the $1,000 limit.

Some states, however, have much higher limits. New Jersey, for example, exempts sales tax on computers up to $3,000 according to the ITEP. Arkansas does not have a limit on the price of computers exempt from sales tax while on vacation.

But New Mexico’s offerings are generally better than Ohio’s. Their clothes must be under $75 to be exempt from sales tax. And computers, at all costs, are not exempt. Similarly, Texas does not offer tax relief on computer purchases. Some states, like Colorado, don’t have tax-exempt weekends at all.

Overall, New Mexico’s exemptions offer consumers across the state a chance to save money on major purchases. The state’s Department of Taxation and Revenue estimates that consumers will save about $4 million from this year’s holiday.