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Hotel And Lodging Tax In New Mexico 2026: TOT Rates By City
New Mexico calls its hotel tax the Lodgers' Tax, and by law at least a quarter of it must fund tourism marketing, with some cities required to spend as much as half.
August 28, 2026
8
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TL;DR
- New Mexico's hotel tax is called the Lodgers' Tax, authorized under the Lodgers' Tax Act and capped at 5% of gross taxable rent for both municipalities and counties.
- "Hotel tax," "lodging tax," "occupancy tax," and "bed tax" all describe this same local charge, which the statute itself calls an occupancy tax.
- New Mexico's Gross Receipts Tax, the state's substitute for a sales tax, applies separately on top of the Lodgers' Tax and varies by city, from about 7.6% in Albuquerque to over 9% in Taos and Red River.
- No referendum is required to adopt or raise a Lodgers' Tax; a city council or county commission can enact it by ordinance alone.
- Stays of 30 or more consecutive days are exempt, unless the lodging qualifies as "temporary lodging" tied to a nearby job, which does not get the exemption.
- Santa Fe and Albuquerque each add a separate Hospitality Fee beyond the 5% Lodgers' Tax cap, but the law authorizing that fee is set to repeal automatically on July 1, 2028.
- State law requires at least 25% to 50% of Lodgers' Tax revenue to fund tourism advertising and promotion, with the exact share depending on the rate and the county's population class.
- Some cities have turned to a flat per-room-night Convention Center Fee instead of raising the percentage rate, since that fee sits outside the Lodgers' Tax Act's 5% cap entirely.
How New Mexico's Hotel and Lodging Tax Works
New Mexico calls its hotel tax the Lodgers' Tax, established under the Lodgers' Tax Act and authorized separately for municipalities and for counties covering their unincorporated areas. Both are capped at 5% of "gross taxable rent," a figure the statute specifically defines to exclude the state's Gross Receipts Tax and any local sales tax, keeping the two charges legally distinct even though both appear on the same folio.
No public vote is required to adopt or raise a Lodgers' Tax up to that 5% cap; a city council or county commission enacts it by ordinance, following a public hearing and standard notice requirements. That's a lighter process than some neighboring states use, and it's part of why Lodgers' Tax rates can change from one budget cycle to the next without appearing on a ballot.
Layered separately on top is New Mexico's Gross Receipts Tax, or GRT, the state's substitute for a general sales tax. GRT is legally imposed on the seller rather than the guest, is destination-based, and combines a state rate with county and municipal components that vary significantly by location, which is why the GRT portion of a hotel bill looks nothing like a flat statewide percentage.
Tax Rates and Extra Fees
Because New Mexico stacks a locally-set Lodgers' Tax with a separately calculated GRT rate that itself varies by city, the two figures need to be read together to understand a guest's total tax burden.
| City / county | Rate | Notes |
|---|---|---|
| Santa Fe | 7% local lodging tax plus 8.1875% GRT | 5% Lodgers' Tax plus a 2% Hospitality Fee dedicated to convention center funding under the Hospitality Fee Act. |
| Albuquerque | 6% local lodging tax plus 7.625% GRT | 5% Lodgers' Tax plus a 1% Hospitality Fee; a separate Tourism Marketing District assessment of roughly 2% also applies. |
| Taos | 5% local lodging tax plus 9.175% GRT | Lodgers' Tax at the standard 5% cap; among the highest GRT rates in the state. |
| Red River | 5% local lodging tax plus 9.425% GRT | Carries the highest combined GRT of any verified city in this table, in the same county as Taos. |
| Las Cruces | 5% local lodging tax plus 8.39% GRT | Lodgers' Tax in place since 1977; a portion supports Convention Center financing alongside the standard tourism-promotion earmark. |
| Farmington | 5% local lodging tax plus 8.1875% GRT | Lodgers' Tax at the standard 5% cap. |
| Silver City | 5% local lodging tax plus 8.1125% GRT | A 2023 ordinance closed a short-term-rental exemption loophole in the town's Lodgers' Tax. |
| Gallup | 5% local lodging tax plus 8.0625% GRT | City council added a new $2.50-per-room-night flat Convention Center Fee in December 2025, on top of the percentage-based Lodgers' Tax. |
Santa Fe and Albuquerque's extra Hospitality Fee comes from a separate law entirely, the Hospitality Fee Act, which lets a municipality that operates a convention center add a fee beyond the Lodgers' Tax Act's 5% ceiling. That's the legal mechanism behind Santa Fe's added 2% and Albuquerque's added 1%. The Hospitality Fee Act carries its own built-in sunset clause and is set to repeal automatically on July 1, 2028, meaning a city currently relying on this fee will need new legislative authority to keep collecting it past that date.
Where a city hasn't turned to the Hospitality Fee Act, some, like Gallup, have instead adopted a flat per-room-night Convention Center Fee, a mechanism that sits entirely outside the Lodgers' Tax Act's percentage cap since it's a fixed dollar amount rather than a rate applied to rent.
Collection and Remittance
The guest pays the combined Lodgers' Tax and GRT as part of the room charge, and the property is responsible for collecting and remitting both. Local practice for the Lodgers' Tax is generally monthly, with reports and payment due by a set day of the following month; the Town of Taos, for example, requires monthly filing by the 25th, including a zero-dollar report when there's no activity to report.
Separately, every municipality or county that imposes a Lodgers' Tax must file its own quarterly expenditure report with the New Mexico Department of Finance and Administration's Local Government Division, and must conduct periodic random audits of lodging vendors, with audit results reported annually to the same division. GRT itself is generally filed monthly with the New Mexico Taxation and Revenue Department, though smaller taxpayers may qualify for quarterly or semiannual filing.
Exemptions From New Mexico's Hotel Tax
New Mexico's Lodgers' Tax Act exempts a stay of 30 or more consecutive days, unless the lodging is statutorily defined as "temporary lodging," meaning housing furnished to someone near their place of employment, which does not qualify for the exemption regardless of length. That distinction matters specifically for extended-stay properties near job sites, where a 30-day-plus booking might still be fully taxable depending on why the guest is staying.
Other Lodgers' Tax Act exemptions include rent under $2.00 per day, lodging furnished to federal, state, or local government entities, and lodging provided by religious, charitable, educational, or philanthropic institutions, along with clinics, hospitals, and privately operated convalescent or elder-care facilities.
Common Mistakes Hotels Make With TOT Compliance
- Treating the Hospitality Fee as part of the base Lodgers' Tax. Santa Fe's 2% and Albuquerque's 1% Hospitality Fees come from a separate statute with its own 2028 sunset clause, not the Lodgers' Tax Act itself, and the two need to be tracked as distinct charges.
- Assuming a 30-day stay is always exempt. New Mexico's "temporary lodging" carve-out, tied to a guest's nearby employment, specifically does not qualify for the standard 30-day exemption, a distinction that's easy to miss when applying a generic long-stay rule.
- Confusing GRT with a flat statewide sales tax. GRT is destination-based and combines a state rate with county and municipal components that vary city to city, so the same nominal "state tax" line can be a materially different number in Taos than in Albuquerque.
- Missing a flat per-room-night fee alongside a percentage tax. Gallup's new $2.50-per-room-night Convention Center Fee, adopted in December 2025, stacks on top of the percentage-based Lodgers' Tax rather than replacing any part of it.
- Not planning for the Hospitality Fee Act's 2028 repeal. Cities currently collecting a Hospitality Fee under that Act should expect the authority behind it to lapse on July 1, 2028, unless the legislature acts to extend or replace it.
- Under-reporting the tourism-promotion earmark. State law requires anywhere from 25% to 50% of Lodgers' Tax revenue to fund tourism advertising and promotion, depending on the rate and the county's population classification, a compliance detail that falls on the municipality rather than the property but affects how revenue reports should be framed.
Where A PMS Fits Into TOT Compliance
None of this is about software, but New Mexico's combination of a locally capped Lodgers' Tax, a separately calculated GRT that varies by city, and a Hospitality Fee Act with its own expiration date is exactly the kind of layered structure that benefits from being configured correctly once rather than recalculated by hand every time a rate changes. A property management system that holds the Lodgers' Tax, the GRT, and any Hospitality Fee or flat Convention Center Fee as distinct, separately labeled tax codes makes it easier to update just one component, like Gallup's new flat fee, without disturbing the others. Revenue reports broken out by tax code also help a New Mexico operator confirm the correct share is being tracked for tourism-promotion reporting purposes, and give a multi-property operator a cleaner way to compare a Santa Fe property's Hospitality Fee exposure against a Farmington property that doesn't carry one at all.
See how roommaster simplifies multi-property tax reporting.
Frequently Asked Questions
1. Does New Mexico have a statewide hotel tax rate?
No. New Mexico's Lodgers' Tax is set locally by each municipality or county, capped at 5% of gross taxable rent, so the rate itself doesn't vary by a state schedule, only by local ordinance.
2. What is New Mexico's hotel tax?
New Mexico's hotel tax is officially called the Lodgers' Tax, a local charge capped at 5% under the Lodgers' Tax Act, layered separately on top of the state's Gross Receipts Tax.
3. What is New Mexico's lodging tax?
Lodging tax is another name for the same Lodgers' Tax described above; the statute itself also refers to it as an occupancy tax.
4. How long does a guest have to stay in New Mexico before the hotel tax stops applying?
30 or more consecutive days, unless the lodging qualifies as "temporary lodging" tied to the guest's nearby employment, in which case the standard 30-day exemption does not apply regardless of stay length.
5. Does New Mexico require hotels to disclose all fees upfront?
No New Mexico-specific fee-transparency law was verified for hotel pricing; only the federal FTC junk fees rule currently applies nationwide, including in New Mexico.
6. Who is responsible for filing and remitting New Mexico's hotel tax?
The property collects both the Lodgers' Tax and the Gross Receipts Tax from the guest and remits them, generally on a monthly basis to the local government for the Lodgers' Tax and to the New Mexico Taxation and Revenue Department for GRT.
7. Why do Santa Fe and Albuquerque charge more than the 5% Lodgers' Tax cap?
Both cities add a separate Hospitality Fee under the Hospitality Fee Act, a different law that lets a municipality operating a convention center charge beyond the Lodgers' Tax Act's 5% ceiling. That authority is set to repeal automatically on July 1, 2028.
