Hotel Tax and Occupancy Tax Laws in New Mexico

1. What is the current hotel tax rate in New Mexico?

The current hotel tax rate in New Mexico varies by location within the state, as different cities and counties can impose their own separate lodging taxes on top of the state’s rate. Generally, the baseline state hotel tax rate in New Mexico is 5.125%. However, additional local occupancy taxes can range anywhere from 5% to 8%, depending on the specific jurisdiction. It is important for hotels and lodging establishments to carefully track and comply with both state and local occupancy tax rates to avoid any penalties or fines for non-compliance.

2. Are there any exemptions or exclusions from the hotel tax in New Mexico?

Yes, there are exemptions and exclusions from the hotel tax in New Mexico. Some common exemptions include:

1. Long-term stays: Hotels may be exempt from charging the hotel tax for guests who stay for a certain number of consecutive nights, typically 30 days or longer.

2. Government employees: Guests who are on official government business and can provide documentation may be exempt from paying the hotel tax.

3. Nonprofit organizations: Some nonprofit organizations may qualify for exemptions from the hotel tax if they can provide proof of their tax-exempt status.

4. Educational institutions: Guests staying at a hotel for educational purposes, such as attending a conference or workshop hosted by an educational institution, may be exempt from the hotel tax.

5. Religious organizations: Guests staying at a hotel for religious purposes, such as attending a retreat or conference organized by a religious organization, may also be exempt from the hotel tax.

It’s essential for hoteliers in New Mexico to be aware of these exemptions and exclusions to ensure compliance with the state’s hotel tax laws.

3. How is the hotel tax collected and remitted to the state in New Mexico?

In New Mexico, the hotel tax, also known as the lodging tax or occupancy tax, is collected by hotels or lodging establishments from guests at the time of payment for their stay. This tax is typically a percentage of the room rate and other charges related to the accommodation. Here is how the hotel tax is collected and remitted to the state in New Mexico:

1. Collection: Hotels are responsible for collecting the hotel tax from guests at the time of check-out. This tax is added to the guest’s bill and collected along with the payment for the accommodation.

2. Record-Keeping: Hotels must keep detailed records of the hotel tax collected for each guest stay. This includes the amount collected, the dates of the stay, and other relevant information.

3. Remittance: The hotel tax collected must be remitted to the state of New Mexico on a regular basis, typically either monthly or quarterly. Hotels are required to file hotel tax returns and make payments to the appropriate state agency, usually the Department of Revenue or Taxation and Revenue Department.

4. Reporting: Along with remitting the hotel tax, hotels are also required to report the amount of tax collected and provide any necessary documentation to the state agency. This helps ensure compliance with tax laws and regulations.

Overall, the process of collecting and remitting hotel tax in New Mexico is crucial for funding tourism-related activities and infrastructure in the state. Hotels must comply with these requirements to avoid penalties and maintain good standing with the state authorities.

4. What is the occupancy tax rate in New Mexico for short-term rentals such as Airbnb?

The occupancy tax rate in New Mexico for short-term rentals such as Airbnb varies by location, as rates are typically determined at the local level. In general, municipalities in New Mexico have the authority to levy an occupancy tax on lodging establishments, including short-term rentals. These taxes are often applied to the rental amount per night or per stay and are collected by the host or property manager on behalf of the municipality. The tax rates can range from around 5% to 15% of the rental amount, depending on the location of the property.

It is important for hosts and guests to be aware of the specific occupancy tax rate applicable to their location in New Mexico in order to comply with local tax laws and regulations. Hosts should ensure that they are accurately collecting and remitting the occupancy tax to the appropriate authorities to avoid potential penalties or fines for non-compliance. Additionally, guests should be informed of any applicable occupancy taxes when booking a short-term rental in New Mexico to avoid any surprises or misunderstandings regarding the total cost of their stay.

5. Are there any local option occupancy taxes that apply in certain cities or counties in New Mexico?

Yes, there are local option occupancy taxes that apply in certain cities or counties in New Mexico. These taxes are typically imposed on accommodations such as hotels, motels, and bed and breakfast establishments within specific jurisdictions. Some cities and counties in New Mexico have the authority to levy their own local option occupancy tax on top of the state’s lodging tax. The revenue generated from these taxes is often used to fund local tourism initiatives, economic development projects, or general municipal services. It is important for hotel operators and tourists alike to be aware of these local taxes in order to comply with the law and avoid any potential penalties.

1. For example, the city of Santa Fe has a local option lodging tax that applies to accommodations within the city limits. This tax is in addition to the state’s lodging tax and is collected by the lodging establishments on behalf of the city.
2. Similarly, Bernalillo County, where Albuquerque is located, also has a local option lodging tax that is assessed on accommodations within the county. This tax is collected by the lodging establishments and remitted to the county government.
3. Other cities and counties in New Mexico may have their own local option occupancy taxes as well, so it is important to check with the specific jurisdiction where the hotel is located to determine if any additional taxes apply.

6. What are the penalties for non-compliance with hotel tax and occupancy tax laws in New Mexico?

In New Mexico, the penalties for non-compliance with hotel tax and occupancy tax laws can vary depending on the specific violation and circumstances involved. Here are some potential penalties for non-compliance with these laws in the state:

1. Failure to collect and remit the required hotel occupancy tax can result in fines and penalties, which may include interest on the unpaid taxes.

2. Non-compliance with occupancy tax laws can lead to penalties imposed by state authorities, such as the New Mexico Taxation and Revenue Department.

3. Business owners who fail to properly register with the state for tax purposes or who intentionally evade collecting or remitting hotel taxes may face legal action, including civil and criminal penalties.

4. Penalties for non-compliance may also include suspension or revocation of business licenses or permits related to operating a hotel or lodging establishment.

5. Additionally, businesses found to be in violation of hotel tax and occupancy tax laws may be subject to audits, which can result in further penalties and assessments of unpaid taxes.

It is essential for businesses operating in the hospitality industry in New Mexico to understand and comply with all applicable tax laws to avoid these penalties and maintain good standing with state authorities.

7. Are there any specific requirements for record-keeping related to hotel and occupancy taxes in New Mexico?

Yes, in New Mexico, there are specific requirements for record-keeping related to hotel and occupancy taxes that must be followed. These requirements ensure compliance with the state’s tax laws and help authorities track and enforce the collection of taxes from hotels and lodging establishments. Some key record-keeping requirements related to hotel and occupancy taxes in New Mexico include:

1. Maintaining accurate records of room rentals: Hotels and lodging establishments are required to keep detailed records of all room rentals, including the dates of stay, room rates, taxes collected, and any discounts or promotions applied.

2. Retaining documentation of tax collected: It is important for hotels to keep documentation of the occupancy taxes collected from guests, such as receipts, invoices, and other relevant paperwork.

3. Record of exemptions: Hotels must maintain records of any exemptions or tax waivers claimed by guests, along with supporting documentation to verify the validity of such exemptions.

4. Documentation of guest information: Hotels are often required to keep guest information on file, including names, contact details, and payment information, to assist with tax reporting and audit trails.

5. Retaining electronic records: In today’s digital age, electronic record-keeping is becoming increasingly common and accepted. Hotels should ensure they have systems in place to securely store electronic records of all tax-related transactions.

Failure to comply with these record-keeping requirements could result in penalties and fines for hotels and lodging establishments in New Mexico. It is essential for businesses in the hospitality industry to stay organized and maintain accurate records to meet their tax obligations and avoid legal complications.

8. Can hotels or short-term rental hosts pass on the hotel tax or occupancy tax to guests?

1. Yes, hotels and short-term rental hosts can pass on the hotel tax or occupancy tax to guests. This tax is typically collected directly from guests at the time of check-out or payment for the rental.
2. The amount of tax passed on to guests is usually a percentage of the total room rate or rental amount. The tax rates vary by location and are set by local or state governments.
3. It is important for hotels and short-term rental hosts to clearly communicate the tax amount to guests upfront so that there are no surprises at the time of check-out or payment.
4. The collected tax must then be remitted to the appropriate tax authority by the hotel or rental host within the required timeframe. Failure to do so can result in penalties and fines.
5. Some jurisdictions also require hotels and rental hosts to provide detailed records of tax collection and remittance as part of their compliance obligations.
6. Overall, passing on hotel tax or occupancy tax to guests is a common practice and an important source of revenue for local governments to support tourism and other public services.

9. Are online booking platforms responsible for collecting and remitting hotel and occupancy taxes in New Mexico?

Yes, online booking platforms are responsible for collecting and remitting hotel and occupancy taxes in New Mexico. The state requires these platforms to collect and remit taxes on behalf of hotels and other lodging establishments for reservations made through their platforms. This responsibility is outlined in New Mexico’s tax laws and is meant to ensure that all lodging stays, whether booked directly or through online platforms, are subject to the appropriate taxes. By requiring online booking platforms to handle tax collection and remittance, the state aims to streamline the process and ensure compliance with tax requirements.

1. Online booking platforms must register with the state tax authority and obtain the necessary permits to collect and remit hotel and occupancy taxes.
2. They are required to add the applicable taxes to the total cost of the reservation and clearly display the tax breakdown to customers.
3. Online booking platforms are responsible for submitting the collected taxes to the state on a regular basis, usually monthly or quarterly, depending on the volume of transactions.

Overall, holding online booking platforms accountable for collecting and remitting hotel and occupancy taxes in New Mexico helps to facilitate tax compliance, level the playing field for all lodging providers, and ensure that the state receives the revenue it is owed from these transactions.

10. How are long-term rentals treated in terms of hotel and occupancy taxes in New Mexico?

In New Mexico, long-term rentals are generally not subject to hotel and occupancy taxes. Hotel and occupancy taxes typically apply to short-term stays in hotels, motels, and other similar accommodations. These taxes are intended to generate revenue from tourists and visitors who are temporarily staying in the state. Long-term rentals, on the other hand, are usually considered residential in nature and are not subject to the same tax regulations as short-term lodging.

However, there are some exceptions and variations in tax laws that may apply to long-term rentals in certain situations. It is recommended to consult with a tax professional or the New Mexico Department of Taxation and Revenue for specific guidance on the tax treatment of long-term rentals in the state.

1. Some jurisdictions in New Mexico may have additional local taxes or regulations that could impact long-term rentals differently.
2. Owners of long-term rental properties should be aware of any applicable tax laws and requirements to ensure compliance with the law.

11. Are there any special provisions or incentives for certain types of lodging establishments in New Mexico?

In New Mexico, there are indeed special provisions and incentives for certain types of lodging establishments. Some of these include:

1. Exemptions for certain types of accommodations: Some lodging establishments, such as bed and breakfast inns and cabins, may be eligible for special exemptions or reduced tax rates under certain circumstances.

2. Tourism Development Act incentives: The state of New Mexico offers incentives through the Tourism Development Act to help promote tourism-related investment, including lodging facilities. These incentives can include tax rebates, reimbursements, and other financial assistance.

3. Local incentives: Some municipalities in New Mexico may offer additional incentives or tax breaks for lodging establishments in order to attract more visitors and boost local tourism.

Overall, these special provisions and incentives aim to support and grow the hospitality industry in New Mexico, ultimately benefiting both the businesses and the state’s economy.

12. What is the process for registering for hotel and occupancy tax in New Mexico?

In New Mexico, the process for registering for hotel and occupancy tax involves several steps:

1. Determine Your Tax Obligations: First, you need to determine if your business meets the criteria for collecting and remitting hotel and occupancy taxes in New Mexico. This typically involves collecting taxes on room rentals in hotels, motels, bed and breakfasts, vacation rentals, and other lodging establishments.

2. Obtain a CRS Identification Number: Before registering for hotel and occupancy tax, you need to obtain a Combined Reporting System (CRS) identification number from the New Mexico Taxation and Revenue Department (TRD). This number serves as your business’s tax account number in the state.

3. Register Online: Once you have your CRS identification number, you can register for hotel and occupancy tax online through the TRD’s Taxpayer Access Point (TAP) portal. You will need to provide information about your business, including its legal name, address, contact information, and federal employer identification number (FEIN).

4. Submit Required Documents: Along with your registration application, you may be required to submit additional documents, such as a copy of your business license, lease agreement, or other supporting documentation.

5. Await Approval: After submitting your registration application and any required documents, the TRD will review your information and process your registration. Once approved, you will receive a Certificate of Registration for lodging tax purposes.

6. Collect and Remit Taxes: Upon receiving your Certificate of Registration, you are legally obligated to collect and remit hotel and occupancy taxes on a regular basis as per the state’s requirements. This includes filing tax returns, reporting your taxable sales, and submitting payment to the TRD.

By following these steps and fulfilling your tax obligations, you can ensure compliance with New Mexico’s hotel and occupancy tax laws and avoid potential penalties or fines for non-compliance.

13. Are there any recent changes or updates to hotel and occupancy tax laws in New Mexico?

Yes, there have been recent changes to hotel and occupancy tax laws in New Mexico. In 2019, the state legislature passed Senate Bill 106, which made significant amendments to the Lodgers’ Tax Act. These changes include the requirement for online platforms such as Airbnb and VRBO to collect and remit taxes on behalf of hosts, as well as the expansion of the tax to include short-term rentals that are not listed on online platforms. Additionally, there have been updates to the reporting requirements for hotels and lodging establishments to ensure compliance with the new legislation. It is essential for hoteliers and rental property owners in New Mexico to stay informed about these changes and ensure they are in compliance with the updated tax laws to avoid potential penalties or fines.

14. Are there any deductions or credits available for hotel or lodging establishments in New Mexico?

In New Mexico, there are no specific deductions or credits available for hotel or lodging establishments related to hotel or lodging taxes. Hotel taxes, also known as occupancy taxes, are imposed on guests who stay in a lodging facility for a certain period of time. These taxes are typically collected by the lodging establishment on behalf of the state or local government. However, lodging establishments may be eligible for other general business deductions and credits available to all businesses in New Mexico, such as deductions for operating expenses or credits for job creation or renewable energy investments. It’s essential for lodging establishment owners to consult with a tax professional or accountant to fully understand the tax implications and potential deductions or credits available to them.

15. Are there any specific rules regarding the use of hotel tax revenue in New Mexico?

In New Mexico, there are specific rules regarding the use of hotel tax revenue. These rules are outlined in the state statutes and regulations that govern how municipalities and localities can allocate and utilize the revenue generated from hotel taxes. Some of the key regulations regarding the use of hotel tax revenue in New Mexico include:

1. Allocation to tourism promotion: A portion of the hotel tax revenue collected must be allocated to fund tourism promotion and marketing efforts to attract visitors to the state.

2. Infrastructure improvements: Some of the revenue may be used for improving infrastructure that directly benefits the tourism industry, such as funding for convention centers, visitor’s centers, and other facilities that enhance the visitor experience.

3. Economic development: Hotel tax revenue may also be invested in projects and initiatives that promote economic development in communities reliant on tourism, such as supporting local small businesses and cultural attractions.

4. Compliance and reporting: Municipalities and localities are required to report on how they allocate and spend hotel tax revenue to ensure transparency and accountability in the use of these funds.

Overall, the specific rules regarding the use of hotel tax revenue in New Mexico are designed to support and grow the tourism industry, boost economic development, and enhance the visitor experience in the state.

16. How does New Mexico enforce compliance with hotel and occupancy tax laws?

New Mexico enforces compliance with hotel and occupancy tax laws through several methods:

1. Registration Requirements: Hotel and lodging operators in New Mexico are required to register with the state’s Taxation and Revenue Department and collect the appropriate taxes from guests. This registration helps the state track compliance with tax laws.

2. Audits: The state may conduct audits of hotels and lodging establishments to ensure they are accurately collecting and remitting the required hotel occupancy taxes. These audits help identify any non-compliance issues and ensure that the proper taxes are being collected.

3. Penalties and Fines: Non-compliance with hotel tax laws in New Mexico can result in penalties and fines imposed on the hotel or lodging operator. These penalties serve as a deterrent and encourage compliance with tax laws.

4. Education and Outreach: The state may provide educational resources and outreach programs to help hotels understand their tax obligations and ensure compliance. This can include training sessions, informational materials, and guidance on tax reporting requirements.

Overall, New Mexico takes compliance with hotel and occupancy tax laws seriously and employs a variety of methods to ensure that hotels and lodging establishments are fulfilling their tax obligations.

17. Are there any specific requirements for disclosing hotel taxes to guests in New Mexico?

Yes, in New Mexico, there are specific requirements for disclosing hotel taxes to guests. Here are some of the key points to keep in mind:

1. Transparency: Hotels must clearly disclose the total amount of taxes and fees charged to guests on their bills or invoices.

2. Breakdown: The breakdown should include the state, local, and any other applicable taxes that are being levied on the accommodation charges.

3. Separate Line Item: It is a requirement to show these taxes as a separate line item from the base room rate to ensure transparency for guests.

4. Informing Guests: Hotels should provide information to guests about the taxes and fees at the time of booking, either on their website or through other communication channels.

5. Compliance: Ensuring compliance with these disclosure requirements is essential to avoid any potential issues with guests or regulatory authorities.

By following these requirements, hotels in New Mexico can maintain transparency and compliance with hotel tax laws, providing guests with clear information about the taxes they are being charged.

18. How do hotel and occupancy taxes in New Mexico compare to other states?

Hotel and occupancy taxes in New Mexico vary from other states in several ways:

1. Rates: New Mexico imposes a lodging tax on hotels, motels, bed and breakfast inns, and other short-term accommodations. The state tax rate is 5.125%, but there may be additional local taxes imposed by counties and municipalities.

2. Exemptions: In some states, certain types of lodging may be exempt from hotel taxes, such as long-term rentals or accommodations provided to government employees. It is important to consult the specific laws of each state to understand the exemptions that may apply.

3. Administration: The administration and collection of hotel and occupancy taxes can differ between states. Some states have centralized collection systems, while others may leave it up to individual properties to collect and remit the taxes.

4. Use of funds: States may use the revenue generated from hotel and occupancy taxes for various purposes, such as tourism promotion, infrastructure improvements, or general government services. The allocation of these funds can vary significantly from state to state.

Overall, while hotel and occupancy taxes in New Mexico may be similar to those in other states in terms of their basic structure, there can be notable differences in rates, exemptions, administration, and use of funds. It is essential for hotel operators and travelers to be aware of these variations when booking accommodations in different states.

19. Are out-of-state lodging providers required to collect and remit hotel and occupancy taxes in New Mexico?

Yes, out-of-state lodging providers are required to collect and remit hotel and occupancy taxes in New Mexico under certain circumstances. Specifically:

1. Any lodging provider, including those located out-of-state, that rents rooms or accommodations for periods of less than 30 days in New Mexico is generally required to collect and remit the state’s Lodgers’ Tax, which is imposed on the rental of lodging accommodations.

2. Additionally, out-of-state lodging providers that have a physical presence or nexus in New Mexico may also be subject to collecting and remitting local occupancy taxes imposed by municipalities or counties where the lodging is located.

3. It is important for out-of-state lodging providers to be aware of their tax obligations in New Mexico and ensure compliance with the state’s hotel and occupancy tax laws to avoid penalties or fines for non-compliance.

20. How can lodging establishments stay informed about changes and updates to hotel and occupancy tax laws in New Mexico?

Lodging establishments in New Mexico can stay informed about changes and updates to hotel and occupancy tax laws through the following means:

1. Regularly checking the official website of the New Mexico Taxation and Revenue Department for any updates or announcements regarding hotel and occupancy tax laws.
2. Subscribing to newsletters or updates provided by relevant industry associations or organizations that specialize in hotel and lodging taxation.
3. Attending seminars, workshops, or training sessions focused on tax compliance and regulations within the hospitality industry.
4. Establishing relationships with tax consultants or legal professionals who can provide expert guidance on compliance with hotel tax laws.
5. Following reputable industry publications or websites that regularly cover tax law developments in New Mexico.
6. Participating in local or state-level hospitality industry networks or associations where members often share information and insights on regulatory changes.

By actively engaging with these resources and staying informed through various channels, lodging establishments can ensure they remain compliant with the latest hotel and occupancy tax laws in New Mexico.