How does New Mexico's tax rate compare to neighboring states?

New Mexico's tax rate can be understood through its overall tax structure, which includes personal income tax, sales tax, and property tax. When comparing New Mexico's individual income tax rates to those of neighboring states such as Texas, Arizona, Colorado, and Oklahoma, one notable aspect is that New Mexico has a progressive income tax system with rates ranging from 1.7 percent to 5.9 percent, depending on income levels. In contrast, Texas does not impose a state income tax, while Arizona and Colorado have rates that can vary but are generally lower than those found in New Mexico for higher income brackets. In terms of sales tax, New Mexico has a Gross Receipts Tax, which is similar to sales tax but applies to the seller rather than the buyer. The state rate is 5.125 percent, but when combined with local taxes, the effective rate can be significantly higher in various jurisdictions. Neighboring Arizona has a base sales tax of 5.6 percent, and Colorado's state sales tax is 2.9 percent, though combined rates may increase based on local taxes. Property tax in New Mexico is also an essential consideration. The state has a relatively low property tax rate compared to the national average, but it can vary significantly by county. For instance, property tax rates in Texas can be higher on average due to the dependency on local property taxes, as the state lacks an income tax. To get the most current and precise information on tax rates in New Mexico and its neighboring states, it may be beneficial to consult the official New Mexico Taxation and Revenue Department web page or other reputable sources that provide updates on tax law changes and effective rates.