New Mexico Tax Overview
New Mexico has a five-bracket progressive income tax with a top rate of 5.9% on income exceeding $210,000. The state fully exempts Social Security benefits from income tax and has been reducing taxes on lower-income residents in recent years. New Mexico has a gross receipts tax instead of a traditional sales tax, which applies to a broader base of transactions.
New Mexico Tax Quick Facts (2026)
| Income Tax | progressive (top rate: 5.9%) |
| Sales Tax (State) | 5.13% |
| Property Tax (Avg Effective) | 0.67% |
| Median Household Income | $58,722 |
| Capital | Santa Fe |
| Population | 2.1 million |
New Mexico Income Tax Brackets (2026)
| Income Range | Tax Rate |
|---|---|
| $0 — $5,500 | 1.70% |
| $5,500 — $11,000 | 3.20% |
| $11,000 — $16,000 | 4.70% |
| $16,000 — $210,000 | 4.90% |
| $210,000+ | 5.90% |
Frequently Asked Questions About New Mexico Taxes
Does New Mexico have a state income tax?+
Yes, New Mexico has a progressive income tax system with a top marginal rate of 5.9%.
What is the property tax rate in New Mexico?+
The average effective property tax rate in New Mexico is approximately 0.67% of assessed home value. On a $300,000 home, that is about $2,010 per year.
What is the sales tax rate in New Mexico?+
The state sales tax rate in New Mexico is 5.13%. Local jurisdictions may add additional sales tax.
What is the median household income in New Mexico?+
The median household income in New Mexico is approximately $58,722 per year.
How does New Mexico's tax burden compare to other states?+
New Mexico's total tax burden depends on income tax, property tax, and sales tax combined. Use the calculator above to compare your specific situation.
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James Whitfield, CPA, MST
James Whitfield is a Certified Public Accountant with a Master of Science in Taxation. He specializes in US federal and state tax calculations and ensures all tax-related tools meet current IRS guidelines. Last updated: April 2026. Uses 2026 tax year data from state revenue departments and IRS publications.