Overview
The first cannabis excise tax filings and payments are due by May 25, 2022. The New Mexico Taxation and Revenue Department began accepting registrations for the new tax on April 1.
Key Requirement:
Taxpayers must be licensed by the Cannabis Control Division of the Regulation and Licensing Department before establishing a cannabis excise tax account.
Tax Period
Cannabis excise tax returns due on May 25 are for activity occurring in the month of April 2022.
How to Register
Businesses subject to the excise tax can register their accounts online using Taxation and Revenue’s Taxpayer Access Point (TAP) self-service portal.
Businesses Subject to the New Cannabis Excise Tax
- Businesses with retail sales of adult-use cannabis.
- Businesses must also register to pay gross receipts tax (GRT) on their sales.
Important:
Gross receipts tax should be calculated on the total sales price, including the excise tax amount.
Businesses already registered for GRT may use their existing accounts to pay GRT on adult-use cannabis sales, but they must also have a cannabis excise tax account.
Exemptions
- Medical cannabis sales are not subject to the new cannabis excise tax.
- Medical cannabis sales are deductible from GRT.
Medical cannabis providers still need to file GRT returns, but they will be able to deduct their medical cannabis receipts.
Filing and Payment Process
- Filing and payment should be submitted electronically through the TAP self-service portal.
- Taxpayers are required to use either:
- ACH debit (eChecks)
- Credit card (subject to a 2.4% convenience fee)
Note:
Fedwire and ACH Credit payments cannot be accepted for the cannabis excise tax or the gross receipts tax on cannabis retail sales.
Paper Check or Cash Payments
Anyone needing to pay with a paper check or cash must have a waiver.
- Waiver forms are available in the “E-File and E-Pay Exceptions” folder on the Forms & Publications page of Taxation and Revenue’s website.
(News release, N.M. Tax. and Rev. Dept., 05/05/2022.)
Frequently Asked Questions
Who is required to pay the New Mexico cannabis excise tax?
Any business engaged in the retail sale of adult-use cannabis in New Mexico is required to pay the cannabis excise tax. These businesses must be licensed by the Cannabis Control Division and register for a cannabis excise tax account in addition to their gross receipts tax (GRT) obligations.
When are cannabis excise tax filings and payments due?
The first cannabis excise tax filings and payments were due on May 25, 2022, covering sales activity from April 2022. Moving forward, filings and payments are due monthly, typically by the 25th of the following month.
How do I register for a cannabis excise tax account?
Businesses can register for a cannabis excise tax account online through the New Mexico Taxation and Revenue Department’s Taxpayer Access Point (TAP) self-service portal. A license from the Cannabis Control Division is required before registration.
Are medical cannabis sales taxed under the new excise tax?
No, medical cannabis sales are exempt from the new cannabis excise tax. They are also deductible from gross receipts tax, although medical cannabis providers must still file GRT returns.
How can cannabis excise tax payments be made?
Payments must be made electronically through the TAP portal using ACH debit (eCheck) or credit card (with a 2.4% convenience fee). Paper checks or cash are only allowed with an approved waiver. Waiver forms are available on the department’s Forms & Publications page.