Two-step sales tax (gross receipts tax) rate reduction with growing dependency of energy taxes
The US state of New Mexico has reduced its sales tax (termed gross receipts tax) rate from 5.125% to 5%. It will be cut again by the same amount to 4.875% in July 2023. This is expected to cost almost $100m in annual revenues.
The reduction comes as revenues from oil and gas sector have grown with inflationary rises in the prices.
This reduction comes with a contingency plan: if the revenue from the gross receipts tax in any single fiscal year from 2026 to 2029 is less than the 95 percent of the previous year’s revenue, then the rate will return to 5.125 percent on the following July 1.
US Sales Tax rates and selling thresholds
| State | State sales tax rate | Remote seller annual thresholds | Digital services taxable? | |||||
| $ threshold | Transactions threshold | |||||||
| Alabama | 4.0% | 1 Oct 2018 | $250,000 | Yes | ||||
| Alaska | 0% | - | n/a | No state-wide tax | ||||
| Arizona | 5.6% | 1 Oct 2019 | $100,000 | - | Yes | |||
| Arkansas | 6.5% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| California | 6.0% | 1 April 2019 | $500,000 | - | No | |||
| Colorado | 2.9% | 1 Dec 2018 | $100,000 | - | Yes | |||
| Connecticut | 6.35% | 1 Dec 2018 | $100,000 | 200 transactions | Yes | |||
| Delaware | 0.0% | - | n/a | No state sales tax | ||||
| Florida | 6.0% | 1 July 2021 | $100,000 | - | No | Communications Tax. E-books exempt | ||
| Georgia | 4.0% | 1 Jan 2019 | $100,000 | 200 transactions | No | |||
| Hawaii | 4.0% | 1 July 2018 | $100,000 | 200 transactions | Yes | General Excise Tax | ||
| Idaho | 6.0% | 1 June 2019 | $100,000 | Yes | Software exempt | |||
| Illinois | 6.25% | 1 Oct 2018 | $100,000 | 200 transactions | No | |||
| Indiana | 7.0% | 1 Oct 2018 | $100,000 | - (since Jan 2024) | Yes | |||
| Iowa | 6.0% | 1 Jan 2019 | $100,000 | - | Yes | |||
| Kansas | 6.5% | 1 July 2021 | $100,000 | - | No | |||
| Kentucky | 6.0% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Louisiana | 4.45% | 1 July 2020 | $100,000 | - (since Aug 2023) | Yes | |||
| Maine | 5.5% | 1 July 2018 | $100,000 | - (since 2022) | Yes | |||
| Maryland | 6.0% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Massachusetts | 5.6% | 1 Oct 2018 | $100,000 | No | ||||
| Michigan | 6.0% | 30 Sep 2018 | $100,000 | 200 transactions | No | |||
| Minnesota | 6.875% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Mississippi | 7.0% | 1 Sep 2018 | $250,000 | - | Yes | |||
| Missouri | 4.225% | 1 Jan 2023 | $100,000 | - | No | |||
| Montana | 0.0% | - | n/a | No state sales tax | ||||
| Nebraska | 5.5% | 1 April 2019 | $100,000 | 200 transactions | Yes | |||
| Nevada | 4.6% | 1 Oct 2018 | $100,000 | 200 transactions | No | |||
| New Hampshire | 0.0% | - | n/a | |||||
| New Jersey | 6.625% | 1 Nov 2018 | $100,000 | 200 transactions | Yes | |||
| New Mexico | 5.0% | 1 July 2019 | $100,000 | - | Yes | |||
| New York | 4.0% | 21 July 2018 | $500,000 | 100 transactions | No | |||
| North Carolina | 4.75% | 1 Nov 2018 | $100,000 | - (since 2024) | Yes | |||
| North Dakota | 5.0% | 1 Oct 2018 | $100,000 | - | No | |||
| Ohio | 5.75% | 1 Aug 2019 | $100,000 | 200 transactions | Yes | |||
| Oklahoma | 4.5% | 1 Nov 2019 | $100,000 | - | No | |||
| Oregon | 0.0% | - | n/a | No state sales tax | ||||
| Pennsylvania | 6.0% | 1 July 2019 | $100,000 | Yes | ||||
| Puerto Rico | 10.5% | 1 Jan 2021 | $100,000 | 200 transactions | Yes | |||
| Rhode Island | 7.0% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| South Carolina | 6.0% | 1 Nov 2018 | $100,000 | - | No | |||
| South Dakota | 4.5% | 1 Nov 2018 | $100,000 | - (since Jul 2023) | Yes | |||
| Tennessee | 7.0% | 1 July 2019 | $100,000 | - | Yes | |||
| Texas | 6.25% | 1 Oct 2019 | $500,000 | - | Yes | Only if physcial equivilaent is taxable (e.g. books) | ||
| Utah | 4.7% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | |||
| Vermont | 6.0% | 1 July 2018 | $100,000 | 200 transactions | Yes | |||
| Virginia | 4.3% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| Washington | 6.5% | 1 Oct 2018 | $100,000 | - | Yes | |||
| Washington, DC | 6.0% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | |||
| West Virginia | 6.0% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | Streaming services only | ||
| Wisconsin | 5.0% | 1 Oct 2018 | $100,000 | - (since 2021) | Yes | |||
| Wyoming | 4.0% | 1 Feb 2019 | $100,000 | - (since 2024) | Yes | |||
