It is that time of year again for the New Mexico Annual Tax Holiday.
This year it starts at 12:01 a.m. Aug. 3, and goes through Aug. 5 at midnight.
This is a great time to purchase school supplies and clothing without paying tax.
The New Mexico Legislature established a deduction from gross receipts tax for retail sales of tangible personal property in 2005 and has continued it each year the first weekend in August.
This is possible because the retailers can deduct the gross receipts tax during this period and therefore can pass the savings onto you for a weekend of tax-free shopping.
The tax rate for Los Alamos is 7.3125% while Santa Fe City has a tax rate of 8.1875 percent.
Let’s say you spend $1,000; this is a savings between $73 and $81 depending on where you are shopping.
It is important to understand that only certain items are tax-free. Clothing or shoes sold for less than $100 are tax-free, while athletic equipment will still be taxable.
The biggest savings might come from purchasing a desktop, laptop, notebook, or tablet computers that cost under $1,000 and any related monitor, speakers, printer, keyboard, microphone, or mouse sold for no more than $500.
General school supplies that are used in standard classroom for educational purposes are tax free.
These include notebooks, paper, writing instruments, crayons, art supplies, and rulers; as long as it is under $30 per item.
Bookbags, backpacks, maps and globes are tax free if under $100 and handheld calculators if under $200.
This tax free holiday does not apply to watches, radios, CD players, headphones, sporting equipment, copiers, office equipment, furniture or fixtures.
This is a great opportunity for savings if you are planning on purchasing Back to School clothes and supplies.
For more information or a complete list of tax free items visit the New Mexico Tax and Revenue Department Website at www.tax.newmexico.gov.
Katie Stavert is a business advisor with UNM-LA Small Business Development Center. Ms. Stavert has a Bachelors of Science in Accounting from Colorado Mesa University. UNM-LA Small Business Development Center is a part of the New Mexico SBDC network. We provide small business assistance with business planning, marketing, business financing, small business start up, entrepreneur training, and other specialized areas to help grow and strengthen businesses in the communities of northern New Mexico. Call us at (505) 661-4803 or email at firstname.lastname@example.org for more information.