The New Mexico Taxation and Revenue Department has issued new guidance regarding grocery deliveries’ being subject to gross receipts taxes. Under state law, food for home consumption is deductible from gross receipts if it is sold at a retail food store. The Department has issued guidance to illustrate how this deduction applies to home deliveries of groceries.
For example, in different scenarios, the grocery store may deliver food itself or use a third-party delivery service, and a customer’s payment may be taken at the time the groceries are at the retail food store or at the time groceries arrive at the customer’s delivery location. Factors such as these affect taxability. Any delivery service charge, however, typically would be subject to gross receipts tax.
This bulletin provides examples of when a sale might or might not qualify for the deduction.