Compensating Tax 

Compensating tax (Section 7-9-7 NMSA 1978) is an excise tax imposed on persons using property or services in New Mexico. This tax is also called “use tax,” or “buyer pays.” Compensating tax helps to protect New Mexico businesses from unfair competition from out-of-state businesses that are not subject to gross receipts tax.


The compensating tax is imposed at a rate of 5.125% on certain property used in New Mexico and 5% on certain services used in New Mexico.

Compensating tax is reported on a Combined Reporting System (CRS) form and is due on or before the 25th day of the month following the report period in which the taxable transaction occurs.


This tax is deposited in the tax administration suspense fund at the state treasury. After necessary refunds and interest are paid, the state distributes 10% of receipts to the small cities assistance fund and 10% to the small counties assistance fund. The remainder goes to the general fund.


Contact Information

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FYI-102, Information for New Businesses

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E-File for accurate returns and faster refunds.
Federal automatic extensions also extend New Mexico income tax returns.
E-File and E-Pay and extend your income tax due date.
Get your refund faster when you E-File.
Low-income residents may qualify for income tax credits.
You may qualify for the Working Family Income Tax Credit.
You may qualify for the Earned Income Tax credits.
Estimated tax payments may be required if you withhold too little.
Manage your account online using Taxpayer Access Point.
Business closed? Update your CRS account online.
Gross receipts tax rates are subject to change in January and July.
NTTCs may be required to support tax-deductible sales.
Changing your address? Update your tax records online.
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Keep up with recent tax changes. See the instructions.
Keep accurate tax records for up to 10 years.
Double-check your figures. Errors will delay your return.
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Tax Fraud in New Mexico, call 1-800-457-6789.
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Find out who is managing your county government.
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April property tax valuation determines your November tax bill.
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Make sure you use correct tax ID numbers.
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Generally, both spouses are responsible for liability on a joint return.
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Tax fraud is the responsibility of the taxpayer
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