Coming soon to a retail store near you is the annual New Mexico Gross Receipts Tax Holiday.

For those families with school-age children, it’s nothing short of a bonanza. For that weekend, the state suspends collection of gross receipts tax on sales of qualifying items so you can buy the items tax free. Because many merchants also absorb the tax on a number of non-qualifying items, you are the beneficiary all around.

The tax holiday begins at 12:01 a.m. on Friday, Aug. 4, and concludes on Sunday, Aug. 6 at midnight.

During that time, the law provides a deduction from gross receipts for retail sales of qualifying tangible personal property; in effect, allowing the retailer to sell the items “tax-free.”

Publication FYI-203, Gross Receipts Tax Holiday, contains list divided into categories, but please note that within some categories there is a set dollar maximum. To qualify for the deduction, clothing or shoes must be priced at less than $100 per unit.

The price limit for desktop, laptop, tablets or notebook computers is $1,000, and for related computer hardware, it is $500.

School supplies for use in standard, general-education classrooms must be under $30 per unit.

There are items specifically excluded by statute in all categories. Those items are always taxable.

Examples of taxable items during the tax holiday are watches, radios, music players, headphones, sporting equipment, portable desktop telephones, copiers, office equipment, furniture or fixtures, everyday clothing priced at $100 or more, clothing designed for special athletic activity or protective use, swimwear, games and gaming devices, e-readers, software, textiles and sewing supplies, cameras, briefcases and luggage, and specialized footwear such as ski boots.

Source: tax.newmexico.gov.

Chieftain Staff Report