Revised August 11, 2008

Because the Motor Vehicle Excise Tax Act (Chapter 7, Article 14 NMSA 1978) is not included in your Traffic Laws Manual, it is included her in its entirety in Section E of this chapter.

Here are the basics:

When is the Motor Vehicle Excise Tax imposed and paid?

(Sec. 7-14-3) The Motor Vehicle Excise Tax (MVET) is imposed, with specific exceptions, "upon the sale in this state of every vehicle ... required under the Motor Vehicle Code ... to be registered in this state."

Note: Because all-terrain vehicles (ATVs) are subject to the registration and titling provisions of the Motor Vehicle Code, the MVET is imposed on the sale of ATVs (3.11.4.16 NMAC). Boats, because they are not vehicles, are not subject to the MVET, but are subject to a separate 5% boat excise tax (Sec. 66-12-6.1).

(Sec. 7-14-5) The tax is paid at the time of application for a certificate of title.

Amount of tax

(Sec. 7-14-4) The MVET rate three percent (3%) and is applied to the price paid for the vehicle. The value of any vehicle traded in on the purchase of another vehicle may be deducted (3.11.4.13 NMAC).

(Sec. 7-14-7) If a vehicle is acquired out-of-state, and another state's gross receipts, sales, compensating or similar tax was paid, the amount of the tax paid may be credited against the MVET due on the same vehicle.

Rebates and discounts

Rebates are not considered a reduction of the price because a rebate is not granted until after sale has taken place, not before. Rebates shall be included in sales price when computing excise tax.

Discounts should be deducted from the sales price when computing excise tax. A discount is granted before the sale of a vehicle is finalized.

Tax penalty for late titling

(Sec. 7-14-8) A penalty of 50% of the MVET is imposed on any person who lives in New Mexico and either a) accepts transfer of a vehicle in New Mexico but fails to apply for a certificate of title within 90 days; or b) accepts transfer outside the state and fails to apply for a certificate of title within 90 days of bringing the vehicle into New Mexico.

The 50% add-on penalty has the effect of increasing the tax rate to 4.5% (3% x 1.5 = 4.5%).

Statutory exemptions from the MVET

(Sec. 7-14-6) The following are exempt from payment of the Motor Vehicle Excise Tax:

1. A person who acquires a vehicle out of state, and for personal use, at least 30 days before moving to New Mexico.
2. A person applying for New Mexico title on a vehicle registered in another state, if the person has previously registered and titled the vehicle in New Mexico and has continued to own the vehicle.
3. The state of New Mexico and any political subdivision of the state.
4. A person who has a disability at the time the person purchases a vehicle and can prove  that modifications have been made to the vehicle that 1) are due to the person's disability; and 2) are necessary to enable the person to drive or be transported in the vehicle.
5. A New Mexico resident who served in the armed forces of the United States and who suffered, while serving or from a service-connected cause, 1) the loss or complete and total loss of use of one or both legs at or above the ankle; or 2) one or both arms at or above the wrist.
6. A person who acquires a vehicle for subsequent lease if: 1) the vehicle is not used other than for lease or sale in the ordinary course of business; 2) the lease is for more than six months; 3) the receipts from the subsequent lease are subject to the gross receipts tax; and 4) the vehicle does not have a GVW of over 26,000 pounds.
7. From July 1, 2004 through June 30, 2009, the purchaser of a new gasoline-electric hybrid vehicle with an EPA fuel economy rating of at least 27.5 mpg, at the time of issuance of the vehicle's original certificate of title.

Note: Exemptions D and E, above, reflect a change in statute, effective July 1, 2007. A vehicle that qualifies for a handicap (HP) plate no longer automatically qualifies for the exemption. However, the automatic exemption for vehicles owned by veteran amputees is retained.

Exemptions by Rule - U.S. and NATO

(3.11.4.9 NMAC) Because issuance of a certificate of title is not required for vehicles sold to the United States, the motor vehicle excise tax does not apply to such vehicles.

(3.11.4.10 NMAC) Because issuance of a certificate of title is not required with respect to vehicles sold or transferred to a NATO force, the motor vehicle excise tax does not apply to such vehicles. A “NATO force” is any NATO signatory's military unit or force or civilian component thereof present in New Mexico in accordance with the North Atlantic Treaty.

(3.11.4.11 NMAC) Also exempt, by operation of the provisions of the North Atlantic Treaty, is the sale or transfer of a vehicle to a member of a NATO force, including the the military and civilian personnel of the NATO force and their dependents.