New Mexico
New Mexico doesn't tax cleaning through a sales tax. It uses a gross receipts tax, the tax is imposed on your business, and residential and commercial cleaning are both subject to it. For unemployment insurance the state uses an ABC test to sort employees from contractors, and the minimum wage is $12.00 an hour.
The biggest adjustment for a cleaning company in New Mexico is the name and shape of the tax. Gross receipts tax is imposed on the business; businesses often pass it on to customers, but the obligation starts with you, and the rate varies by location. Below I go through how that tax treats cleaning, the test the state uses for employees, where payroll registration happens, the minimum wage, and what all of it changes in your books.
Residential cleaning and commercial cleaning are both taxable under New Mexico's gross receipts tax. The Taxation and Revenue Department's overview, FYI-105 (revised July 1, 2024), lists no exemption written for cleaning, and it gives a location-based rate range of 4.875% to 8.9375%. I cover the conditions, including a resale deduction that matters when cleaning is subcontracted, on my page about how New Mexico taxes cleaning services.
For unemployment insurance, New Mexico applies an ABC test to decide whether a worker is an employee. The rule appears in NMSA 1978 Sec. 51-1-42(F)(5) and in the employer tax account rules at 11.3.400.401(C) NMAC. How each kind of worker shows up in the books is in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a legal question, and that call belongs with your CPA or an employment attorney.
Source: New Mexico State Records Center and Archives, 11.3.400 NMAC (Employer Tax Account rules)
Source: New Mexico Legislature, House Bill 619 (2001), final version amending Sec. 51-1-42
New Mexico taxes wages, so employers withhold state income tax from paychecks, and the withholding side belongs to the New Mexico Taxation and Revenue Department. The department's New Employer Workshop (revised September 3, 2020) names the Taxpayer Access Point as its channel for electronic submissions. I don't trust a link I can't tie back to a current source, and that's the situation here: the workshop dates from 2020 and doesn't confirm the Taxpayer Access Point as today's registration page. Unemployment insurance is a separate account with the New Mexico Department of Workforce Solutions, and this page doesn't include a registration link for it.
Source: New Mexico Taxation and Revenue Department, New Employer Workshop (revised September 3, 2020)
Source: New Mexico State Records Center and Archives, 11.3.400 NMAC (Employer Tax Account rules)
The state minimum wage is $12.00 an hour, effective January 1, 2023, under Senate Bill 437 from the 2019 session. This page doesn't cover local minimum wages in New Mexico or any future change to the state rate.
Source: New Mexico Legislature, Senate Bill 437 (2019), Conference Committee Report 2
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
Gross receipts tax shapes how I set up a New Mexico file. Whatever you bill a customer to cover it, the tax is owed by the business, so it gets its own liability account and never blends into revenue. Because the rate depends on location, I tag each job with where it was done. Subcontracted work gets its own lane too, since the resale deduction only means something if the books can show which receipts came from which work. Labor gets priced at no less than the $12.00 floor, and the job profitability estimator runs that math with your own numbers.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep gross receipts tax tracked and separated; how it gets reported, and whether a deduction applies to your receipts, is a question for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in New Mexico and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
The tax has a different name in New Mexico, and it's owed by your business whatever the invoice says. So in your books each job is tagged with its location for the location-based rate, gross receipts tax sits in its own liability account, subcontracted work gets its own lane, and labor is booked at the wage you actually pay. If that tax is mixed in with your sales right now, grab a short call below and we'll go through it.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If you clean homes or businesses in New Mexico and your gross receipts tax is mixed in with your sales, send me a note. We'll go through it together, and the first conversation doesn't cost anything.
