Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified New Mexico tax professional before filing.
New Mexico · USA · Short-term rental taxes
Short-Term Rental Taxes in New Mexico
Short term rental taxes in New Mexico: gross receipts tax (4.875% state rate plus local increments), a local lodgers' tax of up to 5%, and 1.5%–5.9% state income tax on your rental profit.
The 30-Second Answer
- Short term rental tax in New Mexico starts with gross receipts tax (GRT), not a sales tax. The state rate is 4.875% and local increments raise it by location. Airbnb's New Mexico list shows combined GRT of 5.125%–8.6875%.
- Lodgers' tax is local. Cities and counties may levy up to 5% of taxable rent under the Lodgers' Tax Act. Albuquerque adds a 1% hospitality fee and Santa Fe a 2% convention-center fee. The state Taxation and Revenue Department (TRD) does not administer it.
- Airbnb pays GRT statewide and collects lodgers' tax in the places on its list. You still report those receipts on your GRT return and deduct them under §7-9-117 NMSA, and Santa Fe hosts file a monthly lodgers' tax report even when a platform remits.
- Income tax runs 1.5%–5.9% on net rental profit (5.9% above $210,000 single or $315,000 joint). The New Mexico return is due with your federal return on April 15, 2027.
Deductions
What New Mexico STR Hosts Can Deduct
New Mexico's income tax builds on your federal return, so expenses you deduct federally also reduce the state tax on your rental profit.
GRT is legally a tax on the business, even when it is passed on to guests. Talk to your preparer about how to treat GRT and lodgers' tax in your books. If you use the home yourself, split expenses between rental and personal days under IRC §280A.
Filing Calendar
Key Dates & Filing Calendar
GRT is filed with the state TRD, lodgers' tax with your city or county, and income tax on the federal April calendar.
Since July 1, 2025, New Mexico changes GRT rates only once a year, on July 1, except in special cases. Check your location code's rate each July.
New Mexico TRD — GRT Filer's Kit and Gross Receipts Tax Overview; City of Albuquerque Lodgers' Tax Ordinance; City of Santa Fe Lodger's Tax FAQ
Federal & New Mexico Income Tax Treatment
Passive Rental vs. Active Business: Which Applies to Your New Mexico STR?
The Schedule E or Schedule C choice is federal, but it decides the rental profit New Mexico then taxes at graduated rates from 1.5% to 5.9%.
Passive Rental — Schedule E
The usual route for casitas and adobe homes
- Report rents and expenses on Schedule E; the net result flows to your New Mexico PIT-1.
- No self-employment tax on net rental income.
- Passive-loss limits apply; the $25,000 allowance phases out between $100,000 and $150,000 of modified AGI.
- Depreciate the building over 27.5 years; furnishings bought after January 19, 2025 can take permanent 100% bonus depreciation.
No ceiling; New Mexico's top rate is 5.9%
Active Business — Schedule C
When you provide hotel-style services
- Applies when the average stay is 7 days or less and you provide substantial services (daily housekeeping, breakfast, tours).
- Net profit owes 15.3% self-employment tax; the Social Security part stops at the $184,500 2026 wage base.
- Losses may offset other income if you materially participate.
- May qualify for the federal §199A QBI deduction; New Mexico still taxes the income at up to 5.9%.
No ceiling; SE tax applies on top of federal and New Mexico income tax
Depreciation
Depreciation for New Mexico STR Properties
Depreciation is a federal deduction that carries through to your New Mexico return, so it cuts both income taxes.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Exclude the land value from the depreciable basis. |
| Furniture, appliances & décor | 5 years (MACRS) | Items acquired after January 19, 2025 qualify for permanent 100% bonus depreciation. |
| Portales, walls, patios & driveways | 15 years (MACRS) for land improvements | Outdoor site improvements separate from the building. |
| Roof, stucco & HVAC replacements | 27.5 years | Improvements to the building follow the building's recovery period. Routine repairs are deducted in the year paid. |
A cost segregation study can reclassify parts of the property into 5- and 15-year classes. Get professional advice first.
On sale, depreciation claimed is recaptured federally at up to 25%. New Mexico taxes the gain through your state return at its graduated rates.
GRT & Lodgers' Tax
New Mexico Gross Receipts Tax and Lodgers' Tax
The vacation rental tax in New Mexico has two layers: the state-run gross receipts tax on every stay, and a local lodgers' tax (occupancy tax) set by your city or county.
GRT is administered by the Taxation and Revenue Department at a rate set by your location code. Lodgers' tax is imposed and collected by municipalities and counties, not the state.
About 5.1%–8.7% GRT, plus up to 5% lodgers' tax (7% in Santa Fe with its fee)
NM TRD — Bulletin B-200.37; §7-9-4 NMSA; Lodgers' Tax Act §§3-38-15 and 3-38-16 NMSA; City of Santa Fe; City of Albuquerque; Airbnb Help Center article 2318
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb pays GRT on New Mexico stays of 30 nights or less and collects lodgers' tax in listed places (e.g. Albuquerque, Santa Fe, Santa Fe County, Taos, Ruidoso) | Report the receipts on your GRT return and deduct them under §7-9-117. Keep Airbnb's statements as proof |
| Vrbo / Booking.com booking | New Mexico taxes marketplace providers on the sales they facilitate once they pass the $100,000 threshold. Check each booking to confirm tax was charged | Deduct only receipts the platform actually paid GRT on. File lodgers' tax yourself unless your city confirms the platform remits |
| Direct booking | You pay GRT to the TRD on TRD-41413 and remit lodgers' tax to your city or county | Register for a New Mexico Business Tax ID (ACD-31015) and your local lodgers' tax account before your first stay |
Lodgers' tax does not apply to guests who have stayed at least 30 consecutive days, unless the premises are temporary lodging. It also does not apply to lodging under $2 a day. Albuquerque adds a 1% hospitality fee. Rates for other towns vary, so confirm with your city or county finance office.
Platforms
Airbnb Tax in New Mexico: What the Platforms Collect
Platforms pay New Mexico GRT on the sales they facilitate, but hosts still report and deduct those receipts. Lodgers' tax coverage depends on the town.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K above $20,000 and 200 transactions; 1099-MISC for other payments of $2,000+ | Yes — GRT statewide (5.125%–8.6875%), plus lodgers' tax in listed places such as Albuquerque (5% + 1% fee), Santa Fe and Santa Fe County | Earnings and tax reports in the host dashboard |
| Vrbo | Form 1099-K at the same federal thresholds | Owes GRT as a marketplace provider on the sales it facilitates. Lodgers' tax coverage not confirmed at a primary source | Annual payout summary in the owner dashboard |
| Booking.com | Varies by payment model | Not confirmed — depends on whether the platform or the property takes payment | Invoices and payout statements in the extranet |
| Direct bookings | No third-party reporting; you report all income | No — you pay GRT to the TRD and lodgers' tax to your city or county | Your own ledger |
Using More Than One Platform?
Your GRT return lists all receipts, then deducts only the ones a marketplace provider paid tax on. Track each channel separately so you can match the deduction to each platform's statements.
US Reporting — 1099-K, Not DAC7
DAC7 is an EU directive and does not apply to New Mexico rentals. US platforms report host payouts on Form 1099-K once gross payments exceed $20,000 and 200 transactions in the year. All rental income is taxable whether or not a form arrives.
Airbnb Help Center — Occupancy tax collection and remittance in New Mexico (airbnb.com/help/article/2318); NM TRD Bulletin B-200.37; IRS — Form 1099-K
Illustrative P&L: A Santa Fe Casita
Example: a casita earning $48,000 in rents (excluding lodgers' tax and fees paid by guests). For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
New Mexico hosts can be asked for records by the IRS, the TRD (GRT and income tax) and the city or county that collects lodgers' tax.
| Keep | How long | Why |
|---|---|---|
| Booking records (dates, nights, rate, fees, channel) | At least 3 years after filing | Supports GRT receipts, lodgers' tax reports and rental vs. personal days |
| Platform statements showing GRT and lodgers' tax paid | At least 3 years after filing | Documents your §7-9-117 deduction for marketplace sales |
| TRD-41413 GRT returns and lodgers' tax reports | At least 3 years after filing | Proves what you reported and paid on direct bookings |
| Expense receipts and invoices | 3 years from filing (6 if income is understated by more than 25%) | Backs up Schedule E or C deductions, which flow to your PIT-1 |
| Purchase documents, improvements and depreciation schedule | Until 3 years after you sell | Needed to compute basis, gain and depreciation recapture |
Keep each platform's New Mexico tax statements every period. They are your support for deducting marketplace receipts on the GRT return.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
This page is for education only and is not tax or legal advice. GRT rates depend on your location code; confirm them with the NM Taxation and Revenue Department, your city or county and a qualified tax professional before filing.
- NM Taxation & Revenue Dept — Bulletin B-200.37, GRT on lodging and marketplace providers (Rev. 06/2024) — Marketplace providers taxed on facilitated sales; hosts report and deduct under §7-9-117; lodgers' tax is local. https://klvg4oyd4j.execute-api.us-west-2.amazonaws.com/prod/PublicFiles/34821a9573ca43e7b06dfad20f5183fd/a0c798f2-9ea2-4aaf-a6b8-a31540e2c2e8/B-200.37.pdf
- NM TRD — Gross Receipts Tax Overview — Location-based rates; rate changes only each July 1 from July 1, 2025; $100,000 marketplace threshold. https://www.tax.newmexico.gov/businesses/gross-receipts-overview/
- NM TRD — GRT Filer's Kit — TRD-41413 due the 25th; monthly/quarterly/semiannual thresholds; ACD-31015 registration. https://www.tax.newmexico.gov/wp-content/uploads/2023/08/July-2023_GRT-Filers-Kit.pdf
- NMSA §7-9-4 — Gross receipts tax rate — 4.875% (four and seven-eighths percent) from July 1, 2023. https://law.justia.com/codes/new-mexico/chapter-7/article-9/section-7-9-4
- NMSA §§3-38-15 and 3-38-16 — Lodgers' Tax Act — Occupancy tax capped at 5%; 30-day and under-$2 exemptions. https://law.justia.com/codes/new-mexico/chapter-3/article-38/section-3-38-15/
- NMSA §7-2-7 — Individual income tax rates — 1.5%–5.9% brackets for tax years from January 1, 2025. https://law.justia.com/codes/new-mexico/chapter-7/article-2/section-7-2-7/
- City of Santa Fe — Lodger's Tax FAQ (updated 02.2026) — 5% lodgers' tax + 2% convention center fee; monthly reports by the 25th; STR permit. https://santafenm.gov/FAQs_Lodging_Tax.pdf
- City of Albuquerque — Lodgers' Tax Ordinance — 5% of gross taxable rent; reports due the 25th. https://www.cabq.gov/dfa/documents/lodgers-tax-ordinance.pdf
- Airbnb Help Center — Occupancy tax collection and remittance in New Mexico — GRT 5.125%–8.6875% statewide; local lodgers' taxes and Albuquerque 1% hospitality fee. https://www.airbnb.com/help/article/2318
Questions
Frequently Asked Questions — New Mexico STR Taxes
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