Selling a business in New Mexico: what the state takes (2026)
New Mexico’s top individual income tax rate is 5.9%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 5.9%
- Top New Mexico income tax rate (2026)
- $1,451,400
- State tax on a $25M long-term gain
- 29.6%
- Combined federal and state rate on $25M
- 16 of 51
- Rank by total tax on $25M (1 = highest)
How New Mexico taxes a business sale
- Income tax
- Top rate 5.9%: Over $210,000 (single).
- Long-term capital gains
- Capital gains are taxed as ordinary income, top rate 5.9%. Since 2025 the general capital gains deduction is limited to the greater of $2,500 or, for gain from the sale of a business allocated or apportioned to New Mexico, 40% of up to $1,000,000 of that gain (NMSA 7-2-34 as amended by HB 252, 2024). For a resident selling a business the deduction is at most $400,000, worth about $23,600 of tax; the examples apply it.
- Relief that applies only in some sales
- The 40% deduction applies only to net capital gain from the sale of a business that is allocated or apportioned to New Mexico; other gains get at most $2,500. The former deduction of the greater of $1,000 or 40% of all net capital gain no longer applies.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| New Mexico tax | $566,400 | $1,451,400 | $2,926,400 |
| Total tax | $2,946,400 | $7,401,400 | $14,826,400 |
| Effective combined rate | 29.46% | 29.61% | 29.65% |
| Net proceeds after tax | $7,053,600 | $17,598,600 | $35,173,600 |
| Extra tax versus Texas | $566,400 | $1,451,400 | $2,926,400 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- New Mexico tax
- $1,451,400
- Gain excluded or deducted
- $400,000
- Taxable gain at 5.9%
- $1,451,400
- Total tax
- $7,401,400
- Effective rate on the gain
- 29.61%
- Net proceeds after tax
- $17,598,600
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
New Mexico figures are for tax year 2026. Brackets and capital gains deduction set by HB 252 (Laws 2024, ch. 67) for tax years beginning on or after Jan 1, 2025; brackets are not indexed, so the same schedule applies in 2026. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1NM HB 252 (2024) as enacted: Sec. 7-2-7 rate tables, Sec. 7-2-34 capital gains deduction, Sec. 42 applicability
- 2NM Legislature bill status HB 252 (2024): signed, Laws 2024 ch. 67, partial veto
- 3NM TRD reply quoted on TurboTax community (2025 effective date). Secondary source
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 (as of Feb 11, 2026). Secondary source
Data last updated October 26, 2026.
Cite this research
You may quote and republish figures from this page with attribution and a link to the source.
Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): New Mexico,” 2026, https://laurent.capital/research/seller-tax-map/new-mexicoLink (HTML)
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