Today is Small Business Saturday, a charge card marketing initiative that has become an accepted nationwide effort to celebrate small, independent retail operations.
It's also an official tax holiday in the Land of Enchantment.
New Mexico's Small Business Gross Receipts Tax Holiday falls each year on the Saturday after Thanksgiving. The tax holiday began at 12:01 a.m. today and ends at midnight tonight.
For this one day, the state allows a gross receipts tax break on sales of qualifying items at certain small businesses. For the eligible companies, New Mexico provides a deduction from gross receipts for retail sales of qualifying tangible personal property.
While a gross receipts tax isn't a consumer sales tax — a gross receipts tax is levied on the seller rather than the consumer, as is the case with a general sales tax — the New Mexico one-day waiver in effect allows retailers to sell items tax free.
Small biz shopping benefits: The nationwide Small Business Saturday event was started in 2010 by credit card company American Express. The U.S. Small Business Administration has officially cosponsored Small Business Saturday since 2011, noting that it has become an important part of U.S. small businesses' busiest shopping season.
Historically, reported projected spending among U.S. consumers who shopped at independent retailers and restaurants on Small Business Saturday reached an estimated $17.9 billion according to the 2022 Small Business Saturday Consumer Insights Survey commissioned by American Express.
And once again, New Mexico consumers who today Shop Small, as the national motto urges, can save some money.
NM tax holiday benefits: As with other tax holidays that tend to occur in late summer, New Mexico's Small Business one-day tax break has a dollar limit on the eligible purchase. Qualifying items must cost less than $500.
Among the products that get no-tax treatment are clothing, accessories, sporting goods, tools, books, art, cosmetics, musical instruments, cookware, bedding, furniture, toys, games, and electronics.
If you're like most holiday shoppers, which is the focus of all the post-Thanksgiving retail events aka Black Friday, Small Business Saturday, and Cyber Monday, those last three items in the New Mexico tax holiday list probably caught your eye.
Here's the specific legislative language as to what is tax-free today:
- A toy or game that is clearly intended and designed to be used by children or families in play;
- A video game or video game console and any associated accessories for the video game console; or
- Home electronics such as computers, phones, tablets, stereo equipment, and related electronics accessories.
You can check out the full list of eligible tax-free items in the New Mexico Department of Taxation and Revenue's official B-200.31 publication.
Business qualifications: And since the focus today is on small businesses, shoppers also need to be aware of where they shop.
Again, the New Mexico Small Business Gross Receipts Tax Holiday applies only to products sold by a business that maintains its primary place of business within the state and employs no more than 10 employees at any point during the year.
Businesses that operate as franchises, even ones with 10 or fewer employees, are not eligible to offer shoppers the tax savings.
So attention New Mexico and other southwestern shoppers who head to the state today. Check out retailers before you buy. It shouldn't be too difficult to spot participating tax holiday shops. I suspect their storefronts — and web pages — will be filled with signs touting tax savings.
And for this savvy coordination of sales and tax incentives, the entire Land of Enchantment earns this weekend's Saturday Shout Out. For the ol' blog's purpose, I'm recommending the New Mexico Tax & Revenue web page with more details and links about the Small Business Saturday Tax Holiday.
You also might find these items of interest:
- Sales tax jurisdictions across the United States
- City and other local taxes add to overall sales tax takes
- 6 shopping tips to maximize sales tax holiday savings
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