The New Mexico Taxation and Revenue Department recently released guidance on when delivered groceries may be taxable. In New Mexico, food for home consumption is deductible from gross receipts if it is sold at a retail food store. This rule is important when determining the taxability of delivered groceries because many retail food stores use third-party delivery services. When a retail food store uses a third-party delivery service, a customer's payment may be taken at either (1) the time the groceries are at the retail food store, or (2) the time the groceries arrive at the customer's delivery location. When a retail food store takes payment at the time the groceries are at the retail food store, then the receipts are eligible for a deduction. However, when payment is taken at the time the groceries arrive at a customer's delivery location, then those groceries are not eligible for the deduction. Also note that any delivery service charge is typically subject to gross receipts tax.