Compensating tax helps to eliminate unfair competition from out-of-state businesses. It levels the playing field when New Mexico buyers buy property, services, or some combination of property and services from out-of-state sellers who otherwise have no gross receipts...
No, New Mexico’s compensating tax is our form of “use tax,” a term used in most other states.
Under certain circumstances, persons selling property or a combination of property and service to someone engaged in business in New Mexico may be required to collect compensating tax. The seller must not owe gross receipts tax on the sales, and the buyer must use the...
Report compensating tax on Line 2 of the CRS-1 Form. Multiply the value of the taxable property or service by the appropriate compensating tax rate.
Amend the CRS-1 Form for that period. Send the amended CRS-1 Form to the Department with the additional tax due. Amended CRS-1 Forms should be sent to the same address as monthly CRS-1 Forms.
The use of property by a government agency is exempt from compensating tax (Section 7-9-14(A) NMSA 1978) with two exceptions: The use of property by a New Mexico political subdivision that is or will be incorporated into a project created under the Metropolitan...