New Mexico Sales Tax Guide
Chapter 2: How to determine if you have sales tax nexus in New Mexico
The need to collect sales tax in New Mexico is predicated upon having a physical connection with the state. This is a concept known as nexus. Nexus is a latin word that means "to bind or tie" and it stands as the deciding factor for whether the New Mexico Taxation and Revenue Department has the legal authority to require your business to collect, file, and remit gross receipts tax. The two main principles most closely linked to nexus and taxes (especially multistate sales tax) are the Due Process Clause of the 14th Amendment to the U.S. Constitution and the Commerce Clause, Article 1, Section 8 of the U.S. Constitution.What activities or situations may trigger nexus in New Mexico?
Gross receipts tax nexus in New Mexico can be triggered by a number of factors. The most common include having a physical location (office, warehouse, plant, etc.) within the state, having employees within the state, or conducting marketing activities within the state.
More recently, internet commerce has sparked debate over what activities can trigger nexus and where gross receipts tax should be collected. For example, Fulfillment by Amazon merchants may find their products stored in Amazon warehouses across the country. This presence of physical goods in a state may trigger nexus and expands the complexity of managing gross receipts tax compliance.Does Amazon have Fulfillment Centers in New Mexico?
At this time, there are no active Fulfillment by Amazon (FBA) warehouses in New Mexico.Does New Mexico have click-through nexus?
Click-through nexus in New Mexico constitutes a situation in which a seller outside New Mexico makes a sale to a resident of the state that is initiated through online contact with a 3rd party. Working with an affiliate marketer is a common example of a way in which click-through nexus may be triggered.
At this time, the New Mexico Taxation and Revenue Department has not enacted a click-through nexus law.