New Mexico car sales tax: 4% and what it applies to

• New Mexico charges 4%, and that rate is the same everywhere in the state — no county or city adds to it on a vehicle purchase.

• Taxed on top of the vehicle price: dealer-installed accessories.
• Not part of the taxable amount: the dealer doc fee and extended warranties and service contracts.
• Your trade-in comes off before tax is calculated.

• New Mexico charges no sales tax on a car. It charges a 4% motor vehicle excise tax on the price you pay, due when the car is titled. It is the same everywhere in the state: no city or county adds to it, and it has no minimum or cap. The dealer usually collects it and sends it to the state.
• Your trade-in comes off the price before the 4% is figured, on new and used cars, with no dollar limit. A dealer's discount comes off too, and so does a manufacturer rebate that is applied to your balance or guaranteed to you at the sale. Accessories, freight and dealer preparation are part of the price and are taxed.
• The dealer's transfer service fee (its doc fee) and any service contract are not part of the 4% tax. They carry gross receipts tax instead, at the rate where the dealer is. In 2026 that rate is 7.625% in Albuquerque, 8.1875% in Santa Fe and 8.39% in Las Cruces, and it runs from 5.25% to about 9.4% across the state. On a $400 fee the tax is about $30. The total shown here does not include that tax, because the calculator cannot add it yet.
• A used car bought from a dealer is taxed on the price on the dealer's invoice. A private sale is taxed on the higher of the price or 80% of the NADA average trade-in value.

Source: New Mexico Taxation & Revenue Department — Motor Vehicle Excise Tax · rules last verified Oct 11, 2026. Methodology.