Sales, Use and International Tax Activity Update - August 2010

Get Back-to-School in Style and Tax Free - New Mexico

The New Mexico Gross Receipts Tax Holiday this year is from August 6-8, if you have school-age children. For that weekend the state suspends collection of gross receipts tax on sales of qualifying items so you can buy the items tax free. Because many merchants also absorb the tax on a number of non-qualifying items, you are the beneficiary all around. Please see our publication FYI-203, Gross Receipts Tax Holiday, for the scoop on this popular program that has been in effect since 2005.

The law limits the tax-holiday deduction to receipts of retailers from sales of the following types of items:

1. Clothing or shoes sold for less than $100; however, accessories and special clothing or footwear primarily designed for athletic activity or protective use and not normally worn beyond the scope of the athletic activity or protective use remain taxable;
2. Desktop, laptop or notebook computers sold for no more than $1,000, and any associated monitor, speaker or set of speakers, printer, keyboard, microphone or mouse sold for no more than $500, and
3. School supplies students normally use in a standard classroom for educational purposes. The law specifically lists notebooks, paper, writing instruments, crayons, art supplies, rulers, bookbags, backpacks, handheld calculators, maps and globes as deductible during the tax holiday. It specifically excludes watches, radios, compact disc players, headphones, sporting equipment, portable desktop telephones, copiers, office equipment, furniture or fixtures. The law does not consider such items to be school supplies that students normally use in a standard classroom. Sales of those items are taxable during the three-day period.

Sales and Use Tax Holiday information, New Mexico FYI-293, July 1, 2010.

The Sales and Use Tax Holiday information can be viewed on the New Mexico Taxation and Revenue Department Web site.

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