How to Start a Business in New Mexico Checklist
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How to Start a Business in New Mexico:
Starting a business in New Mexico is a simple process. Businesses do not require a state-wide business license but should instead apply for local city business licenses. Also, when registering with the New Mexico Taxation & Revenue Department, New Mexican businesses will receive a Combined Reporting System Number, which can be used to pay for a range of taxes on the Combine Reporting System.
Form your business.
Review New Mexico formation options.
New Mexico offers 4 ways of forming your business. Review these closely and pick the one that fits your business best.
Name your business.
Once you have chosen a business name, you will need to check the New Mexico Secretary of State website to ensure that your business name is not the same or similar to another corporation registered in New Mexico.
If you need help finding a business name, be sure to check out NameSnack's free business name generator.
Once you have found a suitable name, make sure to register the matching web domain and social media handles, should you wish to market your business online.
Enter your chosen business name in the search bar, choose your search parameters, and click "Search."
To perform a thorough search, repeat your search with each parameter available ("Starts With," "Exact Match," and "Contains").
If your chosen name is available, you can register it with the county clerk's office where your business will operate.
Get an Employer Identification Number.
Nearly all businesses will need to register for federal taxes by applying for an Employer Identification Number.
Register your business in New Mexico.
Businesses are regulated by New Mexico state laws and must be registered through the New Mexico Business Resource Center.
LLCs must submit their registrations online through the New Mexico Secretary of State's web portal.
Partnerships and corporations must find the appropriate PDF form on the Secretary of State website, fill it out, print it, and then submit it to the SOS office via mail, courier, or hand-delivered.
Obtain the necessary permits and licenses.
The state of New Mexico does not require businesses to have a statewide business license. You will, however, require a local business license depending on the location of your business.
You will need to consult with your local municipality or county to check the business license requirements. Depending on the county, you will either register online or you will need to mail in your form.
It is also important to consult with the Planning and Zoning Department of your municipality or county to get more information regarding rules, regulations, and restrictions that may apply to your business.
Register your business for taxes.
Register for state taxes.
All new businesses in New Mexico must register for state taxes with the New Mexico Taxation and Revenue Department.
After registering, you will receive your CRS Identification Number, a tax identification number that must be used to pay state and local gross receipts tax, withholding tax, and compensating tax under the Combined Reporting System (CRS).
Go to the Taxpayer Access Point's home page and click on "Apply for a CRS ID."
Before continuing, make sure that you have a valid email address, your EIN, social security, or tax payer identification numbers, information on all business owners, partners, or shareholders, and liquor or contractors licenses (if applicable).
Complete your registration form and submit it.
Apply for special tax programs, if applicable.
Certain businesses require a special tax registration in addition to their CRS identification number. This registration can be done by completing a PDF form, found on the Taxation & Revenue website, or by visiting your district tax office in person.
Businesses requiring special tax registrations include cigarette, tobacco products, and liquor sales, water production, gasoline and special fuels, and severance and resources activities.
Register for sales and use tax.
Every business selling taxable tangible personal property in the state of New Mexico is required to pay sales and use tax. Services rendered are not taxable. You will need to register for a sales tax permit with the New Mexico Department of Taxation & Revenue.
In New Mexico, sales tax is known as Gross Receipts Tax. You can manage your Gross Receipts Tax through the Taxpayer Access Point portal by using your CRS number.
Hire employees and report them to the state.
Register with the New Mexico New Hires Directory.
To start hiring, you will need to register at the New Mexico New Hires Directory. Each employee will need to be registered within 20 days of starting work, in accordance with the Personal Responsibility and Work Opportunity Reconciliation Act.
With reference to the pre-employment screening process in New Mexico, an employer is entitled to view a job applicant’s criminal history and obtain the relevant records from the criminal justice system.
The New Mexico Human Rights Act protects employees against discrimination on the basis of age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, or disability.
The Fair Pay for Women Act prohibits gender pay discrimination between employees of different genders who require the same skills, responsibility, and effort to do the same job.
Get workers' compensation insurance.
New Mexico’s law requires all employers to provide workers’ compensation coverage to their employees.
Health insurance isn’t a requirement for small businesses in New Mexico.
Establish an unemployment insurance tax account.
In New Mexico, your small business is required to establish an unemployment insurance tax account with New Mexico Department of Workforce Solutions. If your business is required to contribute towards unemployment insurance, you will need to file quarterly reports.
New Mexico Business Types:
1. Sole proprietorship.
A New Mexico sole proprietorship is the simplest business structure to choose and usually involves one individual who is solely responsible for the enterprise. With a sole proprietorship, the owner's business and personal finances are intertwined, so that the owner only needs to pay their state income taxes using their social security number.
Sole proprietorships are extremely flexible and can be as big or as small as the owners want them to be. They do not need to be registered with the state of New Mexico and can be dissolved instantly whenever the owner wishes.
Partnerships are suitable for businesses with two or more owners and include general, limited liability, and limited liability limited partnerships. Partnerships are not required to register their businesses with the New Mexico Secretary of State but may do so if they wish.
All partnership types are recognized as pass-through entities in New Mexico, meaning that all partners must account for their profits, losses, and expenses on their personal income tax returns. In addition, limited liability limited partnerships offer a measure of protection for the partners from any liability that a partner did not cause. For example, if one partner is involved in a lawsuit, the other partners will not be affected.
Corporations are standalone entities with shareholders and include profit corporations, professional corporations and associations, and nonprofit corporations. Shareholders are not personally liable for the business and will enjoy some industry-specific incentive programs. These businesses are required to register with the New Mexico SOS.
4. Limited Liability Company (LLC).
LLCs are the most popular business type because of the minimal paperwork, increased flexibility, tax benefits, and simple implementation process. They also offer owners personal liability protection as well as anonymous ownership, no annual filings or fees, and no residency requirements.
LLC business owners are not obligated to file a corporate tax return but must register their business with the New Mexico Secretary of State.
Does New Mexico require a business license?
It depends on your business location and services. Not every business in New Mexico requires a business license. To be safe, contact your local municipality or county to check the business license requirements.
Is New Mexico business-friendly?
New Mexico is not particularly business-friendly. According to a study by Thumbtack, the state ranks at number 47 in the nation for business friendliness.
How much is a business license in NM?
New Mexico does not have a statewide business license. Business owners must approach their local municipalities to find out what licenses and permits they require.
How much does it cost to start an LLC in New Mexico?
It cost $50.00 to form an LLC in New Mexico. There are other registration and filing fees involved, which amount to approximately $120.00, in addition to the LLC filing fee.
Who needs a New Mexico CRS number?
LLCs, partnerships, and corporations must get a New Mexico CRS number.
How do I get a business license in Albuquerque?
To obtain an Albuquerque business license, visit www.cabq.gov.
How do I get a business license in Las Cruces NM?
You can receive a business license or business registration by contacting the Community of Development Department at 1(575) 541-2287 or by visiting the office at 700 N. Main Street.
How many small businesses are in New Mexico?
The U.S. Small Business Administration's Office of Advocacy's small business profile on New Mexico says the state has just over 152,000 small businesses.
How do I get a New Mexico CRS number?
When you register your business with the New Mexico Taxation and Revenue Department, you will receive a CRS number automatically.
Does New Mexico have a sales tax?
Yes. Every business selling taxable tangible personal property in the state must pay sales and use tax. In New Mexico, sales tax is known as Gross Receipts Tax.
How much does it cost to register a business in New Mexico?
New Mexico Articles of Incorporation for LLCs cost $50.00, Statement of Partnership Authority filing fees cost $50.00, and Articles of Incorporation cost $100.00 to file.
What permits do I need to start a business in New Mexico?
- City business license.
- CRS Number for taxes.
- Professional licenses.
- Occupational permit.
- Zoning permit.
- Alcohol and tobacco permit.
- Liquor license.
- Sales and use tax permit.
- Seller/reseller permit.
Is New Mexico a good place to start a business?
New Mexico is an OK place to start a business, neither good nor bad. New Mexico has one of the lowest average growth rates for small businesses but it does offer a large workforce. New Mexico is also working to grow its technology and startup industries.
How do I register a business in New Mexico?
You can register your business with the New Mexico Business Resource Center that is managed by the New Mexico Secretary of State.
How do I start a business in New Mexico with no money?
- Use services to generate cash flow for product-based businesses.
- Look for business, even if you don't get paid for it.
- Use your current resources in different ways.
- Get a credit line.
- Crowdfund and allow the public to invest a small percentage of money in return for a future buy-in.
- Use a business incubator to provide funding designed specifically for startup companies.
How can I protect the name and logo of my business in New Mexico?
The easiest way is to register your business name on the U.S. Patent and Trademark Office website. Remember to first check on the Trademark Electronic Search System and the New Mexico Secretary of State website to ensure that your business name is available.
Do I need workers’ compensation for my business in New Mexico?
All employers in New Mexico are compelled to provide workers’ compensation coverage to their employees.
Does my NM business need to contribute to health insurance?
Health insurance isn’t a requirement for small businesses in New Mexico.
How do I get a business license in New Mexico?
New Mexico does not require a statewide business license. However, your business may require additional licenses and permits to operate, depending on your location and business type. Contact your local municipality or county to check the business license requirements.
How do I start a sole proprietorship in New Mexico?
- Select a business name.
- File a trademark with the New Mexico Secretary of State (optional).
- Acquire the necessary licenses, permits, and zoning clearance.
- Obtain an Employer Identification Number.
How do I form an LLC in New Mexico?
- Choose a business name for your LLC.
- File the Articles of Organization.
- Allocate a Registered Agent.
- Create an Operating Agreement.
- Adhere to all publication requirements.
- Obtain an Employer Identification Number.
What mandatory posters should be up at a New Mexico business?
- New Mexico Minimum Wage Law.
- Job Health & Safety Law.
- Workers’ Compensation Law.
- Equal Opportunity Law.
- Unemployment Insurance Notice.
- State Whistleblower Protection.