New Mexico Vehicle Sales Tax & Fees [+Calculator]
If you are ready to purchase a car in the state of New Mexico, then you will have to be aware of the associated car sales tax which is 4%.
The state sales tax can affect the final purchasing price of your vehicle. Because of this potential expense, many people want to know if tax exemptions or if buying a car out of state can help. Our expert editors have done the heavy lifting for you and compiled their findings here.
Let’s take a look at the current sales tax rate and rules surrounding New Mexico vehicle purchases.
How Much Is the Car Sales Tax in New Mexico?
The current Motor Vehicle Excise Tax for vehicle purchases in New Mexico is 4%.
Motor vehicles are taxed at a different rate in New Mexico, and there is no extra local tax for car sales.
How to Calculate New Mexico Sales Tax on a Car
To calculate the sales tax on your vehicle, find the total sales tax fee for the city and/or county. In New Mexico, this will always be 4%. Multiply the vehicle price (after trade-ins but before incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $50,000 with the state sales tax of 4%. You trade-in a vehicle for $5,000 and get an incentive for $1,000. New Mexico does not charge tax on trade-ins but they do on incentives/rebates, so you would subtract $5,000 from the car cost, to get $45,000, which is the taxable amount.
In this example, multiply $45,000 by .04 to get $1,800. The total purchase price of the vehicle would be $45,800 (account for the incentive).
Calculate Sales Tax in New Mexico Example
- Initial Car Price: $50,000
- Sales Tax Rate: 4%
- Trade-In Amount: $5,000
- Rebate/Incentive Amount: $1,000
Sales Tax = ($50,000 – $5,000) * .04
Sales Tax = $1,800
New Mexico Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, just like with new car purchases, there is a 4% tax on used car sales in New Mexico.
Which County Has the Highest Tax? Which Has the Lowest?
The county with the highest sales tax is Taos County with a sales tax rate of 9.4375%. The county with the lowest sales tax is Harding County with a sales tax rate of 7.3958%
However, cars are taxed differently than other goods and services. New Mexico has a flat 4% tax for vehicle sales.
Car Sales Tax for Trade-Ins in New Mexico
You do not have to pay a sale tax on the trade-in on your vehicle in the state of New Mexico.
In other words, when calculating sales tax, be sure to subtract the trade-in amount from the car price.
Let’s say that you’re purchasing a new car for $60,000 and your trade-in is valued at $20,000. This would put your new vehicle purchase price at $40,000, which is the taxable amount.
Car Sales Tax on Private Sales in New Mexico
Private vehicle sales are taxed at 4% in New Mexico.
As an example, if you purchase a $25,000 car from a private part, then you will have to pay $1,000 for the Motor Vehicle Excise Tax.
Understanding MVET for Out-of-State Vehicle Purchases in New Mexico
When a NM resident makes an out-of-state vehicle purchase and still needs to registration in New Mexico, they’re subject to a 4% Motor Vehicle Excise Tax (MVET) on the purchase price, minus any trade-in. If you’ve paid sales tax in another state, that amount may be credited against the MVET due.
A notarized Affidavit of Gift is required for tax exemption on gifted vehicles. The tax is due when applying for a New Mexico title. A significant late penalty applies if the title application is delayed beyond 90 days after bringing the vehicle into New Mexico, increasing the effective tax rate to 6%.
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Tax on Rebates & Dealer Incentives
The state of New Mexico does tax rebates and dealer incentives. In other words, be sure to use the purchase price (after any trade-ins) when calculating the sales tax amount.
As an example, let’s say you want to purchase a new truck for $65,000 and the dealer provides a $4,000 rebate. You have to pay a sales tax on the $4,000 rebate. Therefore, the taxable amount is still $65,000.
New Mexico DMV & State Fees
New Mexico DMV charges the following fees:
- Car Registration for 1-Year: $27-$62
- Car Registration for 2-Years: $54-$124
New Mexico Dealership Fees
The average dealership fee for a vehicle purchase will be about $330, with no statewide limit. This is also known as the documentation fee or doc fee. This is the fee that is charged to handle the paperwork which needs to be sent to the state DMV.
When Sales Tax Is Exempt in New Mexico
You don’t have to pay sales tax in New Mexico if you receive the vehicle as a gift.
Also, if you register the vehicle in another state within 30 days of the sale, then you do not have to pay the sales tax.
New Mexico EV Rebates & Incentives
Yes, New Mexico does offer state incentives for purchasing new electric vehicles, including:
- New EVs: Up to $3,000 for new EVs purchased from a licensed dealer in New Mexico
- Pre-owned EVs: Up to $1,500 for previously owned EVs purchased from a licensed dealer in New Mexico
- Plug-in hybrid electric and fuel cell vehicles: Up to $2,000 for new and pre-owned vehicles
They also offer up to $2,500 in rebates for home charging hardware from utilities like El Paso Electric and Powering New Mexico.
Federal incentives for all-electric models, new and used, are also accessible, like the federal $7,500 rebate on an electric vehicle purchase.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
