![]() ![]() ![]() As a consequence the IRS will expect you to file a Schedule C, Profit or Loss from Business, with your Federal Individual Income Tax Return. Important: A business that employs the services of an independent contractor will usually be required to send you a Form 1099-NEC and file a copy with the IRS as well. A discrepancy will cause the TRD to audit the business's gross receipts and propose a tax plus a penalty and interest. The TRD then compares gross receipts (aka sales) on the federal income tax return and 1099s to gross receipts reported to the state. That's because the department receives information from the IRS about anyone living in New Mexico who files Schedule C or receives a 1099-NEC. Those businesses that do not report their gross receipts to the TRD are almost certain to be audited. (TRD), report your gross receipts and pay Gross Receipts Tax. If you live in New Mexico and receive income from your services (unless you receive a Form W-2) you are required to register your business with the N.M. Gross Receipts Tax even though those organizations do not have to pay tax on the merchandise they purchase. The New Mexico Taxation and Revenue Department is redesigning its Combined Reporting System (CRS) to create separate returns for withholding, gross receipts. Note: Gross receipts from the sale of services to non-profit organizations and government entities are subject to N.M. This is different from sales tax in most other states that apply only to the sale of tangible property. This includes income from self-employment and independent contractor income. The governor also detailed "record exports" a 4% overall growth in the last two years during her address at the economic event.Businesses in New Mexico receiving income from services provided to buyers located within New Mexico are subject to N.M. The statewide gross receipts tax rate last changed in July 2010 when the rate increased from 5% to 5.125%. 1 Effective July 1, 2021, the new law revises and expands recently enacted destination-based sourcing rules with respect to the gross receipts tax. The New Mexico Taxation and Revenue Department June 20 released the July to December 2023 edition of its Gross Receipts Tax filer’s kit. That new revenue source paves the way to lower the gross receipts tax rate for the prosperity of all New Mexicans.”Īccording to the state’s Taxation and Revenue Department, the statewide rate was last decreased in 1981. Michelle Lujan Grisham signed legislation amending certain provisions of the New Mexico gross receipts tax. “New Mexico recently expanded its gross receipts tax to include internet sales. “Reducing the gross receipts tax rate will provide valuable tax relief to New Mexico families and businesses while adding a competitive advantage for New Mexico businesses,” Taxation and Revenue Cabinet Secretary Stephanie Schardin Clarke said. The cut would reduce the gross receipts tax rate from 5.125% to 4.875%, which the governor claims would be a $145 million annual tax cut, totaling to be around $1.5 billion over 10 years. ![]() The governor announced the plan during an address at the Albuquerque Economic Forum where she outlined a 0.25% cut in the gross receipts tax rate. Michelle Lujan Grisham announced Wednesday she plans to cut gross receipts taxes statewide for the first time in 40 years.
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