New Mexico
Our ranking: Mixed tax picture
State income tax: 1.7% (on up to $5,500 of taxable income for single filers and $8,000 for joint filers) — 4.9% (on taxable income over $16,000 for single filers and over $24,000 for married couples filing jointly)
Average state and local sales taxes: 7.78%
Gas taxes and fees: 41 cents per gallon
Personal income tax rates top out at 4.9% on taxable income over $16,000 for single filers and over $24,000 for married couples filing jointly. But many residents of the Land of Enchantment, particularly those with dependent children, will see their 2018 state taxes rise as a result of the new federal tax law.
New Mexico’s tax code is tied to federal definitions, so the elimination of the personal exemption at the federal level means no more exemption at the state level. The state legislature ended its 30-day session in 2018 without addressing this. Property taxes are modest, but sales taxes lean high and hit more services than most states.
