Small Business Saturday also is a tax holiday in New Mexico
Friday, November 27, 2020
Millions of Americans have been spending most of their time at home due to the coronavirus pandemic. And a good portion of them began holiday shopping online before this Black Friday or the upcoming Cyber Monday.
But small businesses are hoping consumers will spend some of those dollars tomorrow, the annual shopping holiday known as Small Businesses Saturday.
The event was started in 2010 by credit card company American Express. The U.S. Small Business Administration has officially cosponsored Small Business Saturday since 2011, noting that it has become an important part of small businesses' busiest shopping season.
And once again, some southwestern shoppers are getting an added incentive to shift at least some of their holiday shopping to this the post-Thanksgiving Saturday.
In New Mexico, tomorrow, Nov. 28, not only is Small Business Saturday. It's also the state's annual Small Businesses Saturday Tax Holiday.
One day tax-break for small business shoppers: The Land of Enchantment created this special tax holiday in 2018. It's scheduled to be on the shopping calendar through 2025.
For those years, customers who shop certain New Mexico small local businesses on Small Business Saturday won't have to pay the state gross receipts tax, which essentially is the state's version of sales tax.
This year's small business tax holiday begins at 12:01 a.m. Saturday, Nov. 28, and ends when clocks strike midnight that day.
Dollar limits to tax savings: The tax holiday's key consideration is the price of purchases. Qualifying items must cost less than $500.
Among the products that will get New Mexico's no-tax treatment are clothing, accessories, sporting goods, tools, books, art, cosmetics, musical instruments, cookware, bedding, furniture, toys, games and electronics.
If you're like most holiday shoppers, those last three items probably caught your eye.
New Mexico shoppers tomorrow won't owe tax on, per the legislative language:
- A toy or game that is clearly intended and designed to be used by children or families in play;
- A video game or video game console and any associated accessories for the video game console; or
- Home electronics such as computers, phones, tablets, stereo equipment and related electronics accessories.
You can check out the full list of eligible tax-free items in the New Mexico Department of Taxation and Revenue's official B-200.31 publication.
I do, however, want to point out a problem, at least as far as the holiday goes, with one item that some, shall we say, less meticulous holiday shoppers tend to opt for every year.
Gift cards, while easy to buy and the appropriate size for just about everybody, do not under state law qualify for the tax holiday treatment.
Qualifying businesses: In addition to the tax-free products, shoppers need to make sure they buy them from officially designated small businesses.
These are retailers who have maintained New Mexico as their primary place of business and who had no more than 10 employees at any one time during the state's previous fiscal year, which ends each June 30.
Note, too, that New Mexico is serious about supporting truly local companies. Franchises, even ones with 10 or fewer employees, are not eligible to offer shoppers the tax savings.
So attention New Mexico shoppers. Check out retailers before you buy. It shouldn't be too difficult to spot participating tax holiday shops. I suspect their storefronts — and web pages — will be filled with signs touting tax savings.
Safe COVID-19 sales: This year, New Mexico's Small Business Tax Holiday is facing the same COVID-19 complications as the recent holiday and, well, just basic life.
Pandemic precautions mean that many retailers are not open for the usual walk-in shoppers.
However, you can purchase products online and arrange for curbside pickup.
If you choose to keep the transactions totally digital, qualifying internet and phone sales and delivery also are exempt from tax.
"We know how hard the pandemic has been on New Mexico businesses. Even though we may not be able to support them in person this weekend, we can still help by ordering online or by phone," said Taxation and Revenue Secretary Stephanie Schardin Clarke in announcing the 2020 holiday.
Kudos to Land of Enchantment lawmakers for helping boost that business support with its well-timed holiday shopping tax holiday.
You also might find these items of interest:
- 6 shopping tips to maximize sales tax holiday savings
- Sales tax jurisdictions across the United States
- Sin taxes are lone revenue bright spot during COVID-19 for many states
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