Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for New Mexico.
March 26, 2026
New Mexico Tax Conformity Update Under OBBBA
Authored by: Kiana McGowan, CPA and Katie Nguyen, CPA
On March 11, 2026, New Mexico enacted Senate Bill 151, which revised the state’s compliance with certain federal tax provisions introduced under the One Big Beautiful Bill Act. While many federal changes continue to flow through to New Mexico, the state has chosen to selectively decouple from several business-related provisions effective January 1, 2027.
Key changes taxpayers should be aware of include:
- Bonus depreciation decoupling. New Mexico will no longer fully conform to the federal 100 percent bonus depreciation or expensing for qualified production property. Excess federal depreciation must be added back for state purposes.
- Interest expense limitation. The state will calculate the business interest deduction using EBIT rather than EBITDA, which may reduce allowable interest deductions at the New Mexico level.
- Foreign income inclusion. Net CFC tested income will be included in the New Mexico corporate income tax base, potentially increasing state taxable income for multinational groups.
Multi-state taxpayers should evaluate New Mexico-specific impacts separately from federal rules. Planning is recommended as state and federal requirements continue to diverge beginning in 2027.
The full text of the bill can be accessed here.
If you have questions about state conformity to the IRC, please reach out to a member of the Withum SALT Team.
November 5, 2025
New Mexico Rules Legal Services Fees for Out-of-State Clients Deductible
Authored by: Bonnie Susmano, JD, MBA and Joe Petrucci
The New Mexico Taxation and Revenue Department confirmed that legal service fees earned by a New Mexico firm for work performed in-state on behalf of an out-of-state client qualify for the gross receipts deduction for services sold to nonresidents. Because the services’ benefits are received outside New Mexico, the receipts are treated as out-of-state sales and are therefore not subject to gross receipts tax. The ruling reinforces the importance of analyzing the location of the customer’s use and benefit, rather than where the services are performed. Professional service providers with nonresident client bases may be able to reduce gross receipts tax liability by properly documenting where their services are used and received.
If you have questions about sourcing receipts for sales taxes, please reach out to a member of the Withum SALT Team.
June 20, 2025
New Mexico Court Reverses Gross Receipts Tax (GRT) Liability for Out-of-State Staffing Firm
Authored by: Kiana McGowan, CPA, MBA and Penny Sweeting, CPA
On May 30, 2025, the New Mexico Court of Appeals reversed a prior ruling and found that Vista Staffing Solutions, Inc., a Utah-based medical staffing agency, was not liable for New Mexico gross receipts tax (GRT) on income earned from placing healthcare professionals in the state. The court concluded that Vista’s services, including recruiting and referring medical professionals, were performed entirely outside New Mexico and, therefore, qualified for the out-of-state exemption.
The ruling makes clear that for gross receipts tax in New Mexico, what matters is where a company’s own activities take place, not where the final service is delivered. While the healthcare professionals worked in New Mexico, Vista’s role was limited to staffing and administrative work done entirely out of state. This case reminds businesses and tax preparers to consider where a company’s operations occur and how a state may source those services.
For more details, please refer to the full ruling of this case here.
If you have questions about multistate income tax, please reach out to a member of the Withum SALT Team.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
Have Questions or Need Guidance?
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