Computer software is a general term used to describe a collection of computer programs, procedures and documentation that perform some tasks on a computer system. Software is considered personal property and may be assigned.
New Mexico Assignment of Software
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Prewritten computer software delivered on storage media such as a diskette is generally subject to states' sales taxes. However, some states do not impose sales tax on prewritten computer software if it is downloaded electronically.
New Mexico does not have a statute which explicitly defines Software-as-a-Service, however both canned and custom software is considered taxable, and professional services to create software are taxable in New Mexico. Therefore, Software-as-a-Service is subject to gross receipts tax in New Mexico.
The SSUTA defines canned software, whether delivered on a tangible format or electronically, as tangible personal property.
The state-wide sales tax in New Mexico is 5.125%.
These tax-exempt goods include gasoline, groceries, durable medical equipment, prescription medications, and certain medical services. Additionally, there are certain customers that are exempt from the gross receipts tax, such as nonprofits, government agencies, and merchants buying goods for resale.