What: NM Gross Receipts Tax Holiday
When: Friday, Aug. 7 to Sunday Aug. 9
Where: Throughout the state
Get ready to go back to school with the tax-free holiday
By Marissa Bond
The Las Cruces Bulletin
Taxes – what are they good for? Well, a lot, actually, but on an already strained budget they can be a burden, especially in families with children preparing to go back to school.
Enter the tax-free weekend.
During the New Mexico Gross Receipts Tax Holiday, held from 12:01 a.m. Friday, Aug. 7 through midnight Sunday, Aug. 9, the state suspends collection of gross receipts tax on sales of qualifying items – in short, you purchase those items tax-free.
The 2005 New Mexico Legislature established a deduction from gross receipts for retail sales of tangible personal property during the first full weekend in August. When gross receipts are deductable, retailers have no need to recover tax costs from some customers.
New Mexico’s tax-free weekend coincides with Texas’, so if you can enjoy the same tax exemption in the Outlet Shoppes at El Paso or stores in the Sun City.
Internet, mail order and telephone sales are only deductible if the item is both delivered to and paid for by the customer during the tax holiday period or the customer orders and pays for the item and the retailer accepts the order during the tax holiday.
The exempt items dovetail with the needs of students returning to school – clothing and shoes, computers and computer-related items and school supplies.
However, the tax-free weekend is not a carte blanche exemption. Not everything you can purchase qualifies as a nontaxable purchase. While many merchants also absorb the tax on non-qualifying items, not all will do so. In order to keep from being surprised at the register, ask an employee about the store’s policy and familiarize yourself with the items that are taxable or nontaxable.
Taxable and nontaxable items are divided by categories, and some categories have a set dollar maximum. Clothing or shoes must be priced at less than $100 per unit – no discount on those Manolo Blahniks (also, where did you get Manolo Blahniks in Las Cruces?). Computers must be priced at less than $1000 to qualify for the discount, and related computer hardware must be less than $500. School supplies for use in standard, general-education classrooms must be less than $30 per unit – Junior’s Mont Blanc pens will be fully taxed.
There are also very specific restrictions in place within the categories – sometimes comically specific.
Blank CDs are nontaxable, but pre-recorded CDs are still taxable. Computers and computer hard drives, ink cartridges, microphones, modems, printers and paper are all nontaxable, but computer scanners are taxable. Occupational, military, scouting and school uniforms are all nontaxable, but sport uniforms? Nope. Vests? Yes, unless they are hunting or water vests. Athletic socks are nontaxable, but athletic supporters are.
E –readers are nontaxable if the model has computing functions, such as word processing or spreadsheets, but if you want an e-reader just to read, expect to pay taxes on it.
And sorry, Donald – toupees are still taxable.
For a more comprehensive list of taxable and nontaxable items as well as specific information on the legislation, definitions, types of sales, (rain checks, exchanges, refunds, gift cards, layaways, Internet, mail order and telephone sales), visit www.tax.newmexico.gov/tax-holiday.aspx.
Marissa Bond can be reached at firstname.lastname@example.org.