The online mega-retailer Amazon doesn't have to pay gross receipts taxes on sales of goods that New Mexicans order from its website, according to a spokesman for the New Mexico Taxation & Revenue Department.
And the Land of Enchantment is not alone. More than half the United States, or 27 state governments, don't require Amazon to pay taxes on online sales.
In New Mexico, the tax charged on most goods and services is called a gross receipts tax (GRT). The rate varies throughout the state from 5.1 percent to 8.7 percent, depending on local rates that stack onto the statewide rate.
If a seller who has a presence in New Mexico—known as "nexus"—has receipts from a transaction that meet the definition of gross receipts and has no exemptions or deductions, online retailers may be liable to pay gross receipts taxes, writes SU Mahesh, spokesman for the Taxation and Revenue Department. But, he adds, "There is not a specific statute that says online sales retailers are subject to gross receipts tax."
Retailers often pass on the cost of the GRT to consumers, [Cover, Oct. 1: "On the Hook"] and Amazon's ability to avoid paying it has given the corporation an edge over competitors. In January 2013, the state Supreme Court ruled that Barnes & Noble must pay GRT because its activities in the state were associated with bn.com's ability to maintain a market here.
"Transactions need to be looked at individually to determine if the tax applies," Mahesh writes. "To the best of our knowledge, Amazon does not have nexus in New Mexico and is therefore not subject to gross receipts tax on their sales to New Mexico."