What Is the Tax Rate in Albuquerque, New Mexico?
Discover the essential tax rates and financial responsibilities in Albuquerque, New Mexico. A comprehensive guide to understanding your local tax burden.
Albuquerque, New Mexico, presents a multi-layered tax structure influenced by state, county, and municipal authorities. Understanding the various taxes is essential for residents and businesses operating within the city. Taxation in Albuquerque is not a single, unified rate but rather a combination of different levies, each with its own calculation and application.
Gross Receipts Tax Application
New Mexico utilizes a Gross Receipts Tax (GRT) system, which functions similarly to a sales tax but is applied to the gross income of businesses rather than being solely collected at the point of sale from consumers. Businesses are responsible for remitting this tax to the state, though it is commonly passed on to the customer as part of the total price of goods or services. The combined GRT rate in Albuquerque is 7.875% as of 2025.
This combined rate comprises a state GRT of 5.125% and a local GRT component of 2.75% for the city and county. The state base rate throughout New Mexico is 5.125%, with local rates varying by county, municipality, and special district, leading to combined rates ranging from 5.125% to 9.0625% across the state. The GRT applies broadly to sales and leases of tangible property, as well as the performance of many services. This includes professional services like consulting, legal fees, and repairs, alongside personal services such as haircuts.
New Mexico operates on an origin-based sourcing system for GRT, meaning the tax rate is determined by the business’s location or the “ship-from” address for sales. Businesses must register with the New Mexico Taxation & Revenue Department (TRD) to collect and remit the tax. Failure to comply can result in penalties and interest charges.
Property Tax Assessment
Property taxes in Albuquerque are determined by the Bernalillo County Assessor’s Office, which values properties annually. Property values are assessed as of January 1 each tax year. The tax is based on the property’s market value.
In New Mexico, the taxable value of residential real estate is one-third (33.33%) of its appraised market value. For example, a home with a market value of $180,000 would have a taxable value of $60,000, before any exemptions. The “mill levy” is then applied to this net taxable value to determine the final tax bill, with one mill equaling $1 of tax per $1,000 of taxable value.
Property tax rates are a composite of various mill levies, including those for the county, city, school district, and other special districts. For instance, the non-residential mill levy rate in the City of Albuquerque is approximately 47.983 mills. A common exemption is the “head of family” exemption, which reduces taxable value by $2,000 for homeowners providing the majority of financial support for their household. New Mexico also has a valuation cap that limits annual increases in appraised value to 3%, though this cap is lifted when a property is sold or improved. Property tax bills are typically issued by the county treasurer around November 1.
New Mexico Income Tax Considerations
Residents of Albuquerque are subject to New Mexico’s state income tax, as Albuquerque itself does not impose a city income tax. The state employs a progressive income tax system, meaning higher income levels are taxed at higher rates. For the 2024 tax year, which will be filed in 2025, the state income tax rates range from 1.7% to 5.9%.
New Mexico’s progressive structure includes five tax brackets. The highest rate of 5.9% applies to taxable income exceeding certain thresholds, such as $210,500 for single filers, $157,500 for married filing separately, and $315,000 for married filing jointly.
Taxpayers can reduce their taxable income through various deductions and credits. New Mexico generally aligns with federal standard deduction amounts for state returns. For 2024, the standard deduction is $29,200 for married couples filing jointly, $14,600 for single filers and married filing separately, and $21,900 for heads of household. The state also offers specific credits, such as a credit for qualifying children, which can be up to $622 per child based on income. Additionally, there are deductions for certain medical care expenses, particularly for taxpayers aged 65 or older with significant unreimbursed costs.