This year’s Small Business Saturday New Mexico Gross Receipts Tax Holiday is Saturday, Nov. 28.
For this one day, the state suspends collection of gross receipts tax on sales of qualifying items at certain small businesses.
The tax holiday begins at 12:01 a.m. Saturday, Nov. 28 and concludes at midnight Saturday, Nov. 28.
During that time the law provides a deduction from gross receipts for retail sales of qualifying tangible personal property; in effect allowing the retailer to sell the items “tax free”.
B-200.31 Small Business Saturday Gross Receipts Tax Holiday contains a list of qualifying items, but note the sales price of the item must be less than $500.
Types of items that qualify are clothing, accessories, sporting goods, tools, books, art, cosmetics, musical instruments, cookware, bedding, furniture, toys, games and electronics.
In order for a business to qualify for the deduction, it must maintain its primary place of business in New Mexico, and employ no more than 10 employees at any point during the year.
Businesses that operate under a franchise agreement do not qualify to deduct their receipts under this tax holiday.
For more specific information for small businesses on how to take the deduction on tax returns, visit CRS-1 Filers Kit, For Reporting Gross Receipts, Withholding and Compensating Taxes, July through December 2020.
This deduction is a separately stated deduction that should be placed on its own line and use a special deduction code D0-020.