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New Mexico · 2026 · 37 steps · official links

How to start a business in New Mexico

Every step to open an LLC in New Mexico and get ready to hire, in order, with the official state page for each one. Agencies you'll deal with: Secretary of State · Taxation and Revenue Department · Department of Workforce Solutions · Workers' Compensation Administration · Health Care Authority (new hire) · Office of Superintendent of Insurance (Patient's Compensation Fund).

LLC filing fee
$50
State sales tax
4.875%
Seller's permit
Free
Out-of-state sales threshold
$100,000
Last verified
October 27, 2026

This is the most common path: a new LLC, general business, paying W-2 employees and 1099 contractors. Adding a location, forming a corporation, or in a licensed industry? Customize it and check off steps as you go.

Customize this checklist

Popular New Mexico business types:

Step 1

Set up the business with the state

Do this first. The state tax and payroll accounts ask for your registration details.

Get a federal EIN

Apply free on the IRS website and get the number immediately. You'll need it for the state tax registration, a business bank account, and payroll. Opening a new location? You already have one; the same EIN works in every state.

FederalFreeIRS: Get an EIN

Sign an operating agreement

This internal document sets out who owns what, how decisions get made, and what happens if an owner leaves. It isn't filed with the state, but banks often ask for it, and it helps protect your liability shield. Single-owner LLCs need one too.

Every state

Open a business bank account

Bring your EIN letter, filed formation documents, and operating agreement or bylaws. Keeping business and personal money separate is one of the main things that protects your personal assets.

Every state

Check industry licenses and permits

Many businesses need a license or permit before opening, separate from registering the company. Check three levels: the state licensing board for your field, your city or county, and any federal agency that regulates your industry.

  • Trades and construction: general contractors, electricians, plumbers, HVAC and roofers usually need a state or local license, and often a bond
  • Personal services: salons, barbers, nail and esthetics shops need a shop license plus licensed staff; massage and tattoo studios are licensed too
  • Professional services: accounting, engineering, architecture, law, real estate and insurance require state licenses for the people and sometimes the firm
  • Child care, elder care and home care need a state facility or agency license and background checks
  • Retail with restricted products: alcohol, tobacco and vape, cannabis, firearms (federal FFL), pawn and secondhand dealers
  • Auto, transport and logistics: auto dealers and repair shops, towing, movers, and trucks that need a USDOT number
  • Money and finance: lenders, mortgage brokers, debt collectors and money transmitters are licensed by the state, often through NMLS
  • Local permits for almost everyone: city business license or tax registration, zoning or home occupation permit, sign permit and fire inspection

Decide on S corp tax treatment (optional)

If you want S corp taxation, file IRS Form 2553. The deadline is tight: generally within 2 months and 15 days after the start of the tax year you want it to apply. See Business basics for when it makes sense.

Form your LLC with the state

File Articles of Organization (or the state's equivalent) online through Secretary of State Business Portal (enterprise.sos.nm.gov).

Name a New Mexico registered agent

The registered agent needs a New Mexico physical address. P.O. boxes are not allowed.

NM

Register a trade name (DBA) if you use a different name

New Mexico has no state DBA registry. Some counties may require you to file a trade name with the county clerk.

NMIf it applies

Know New Mexico's formation rules

Out-of-state entities applying for authority must include a good standing certificate from their home state dated within 30 days. Online filings add a $1.95 convenience fee.

NM
Step 2

Register for state taxes

Register with Taxation and Revenue Department

Register for a free New Mexico Business Tax ID (NMBTIN) online through the Taxpayer Access Point (TAP), usually issued in 1 business day. One ID covers gross receipts tax, compensating tax and wage withholding.

  • Employees complete Form Federal W-4 (no separate state form) for state withholding
  • New Mexico has a gross receipts tax (GRT) charged to the seller instead of a sales tax. The state rate is 4.875%, and local add-ons bring most combined rates to about 7.6%. GRT applies to services as well as goods.

Check local taxes and business licenses

Gross receipts tax rates vary by city and county, so charge the rate for where the service is delivered. Some cities require their own business license.

NM

Charge gross receipts tax on services

New Mexico taxes the seller's gross receipts, including most services, not just goods. File your gross receipts and withholding returns on time even when no tax is due, or you face a $5 penalty.

  • File monthly if your average liability is over $200 a month
  • Physicians can claim a GRT credit for unpaid on-call hospital care
Step 5

Collect sales tax

Applies if you sell products, or services this state taxes. Most medical care is exempt. See Business basics for sales tax.

Register to collect sales tax

New Mexico calls it a Business Tax Identification Number (BTIN) registration for Gross Receipts Tax. Register with the New Mexico Taxation and Revenue Department through Taxpayer Access Point (TAP), or Form ACD-31015, Application for Business Tax Identification Number before you make your first taxable sale in New Mexico. You'll collect tax from customers and send it to the state.

  • State rate: 4.875%
  • Local taxes: Counties and cities add local gross receipts tax; combined rates ran from 4.875% to 8.9375% as of July 2024. Rates are sourced to where goods or the product of a service are delivered.
  • Yes, gross receipts tax applies to most services performed in New Mexico, plus services performed elsewhere whose product is first used in New Mexico.

Buy items you resell tax-free with a resale certificate

Give your supplier Nontaxable Transaction Certificate (NTTC) so you don't pay tax on inventory you'll resell. Buyers get NTTCs from the department and give them to sellers; sellers may accept the MTC certificate only from certain out-of-state buyers not required to register in New Mexico, and New Mexico does not issue MTC certificates. Keep certificates your own customers give you, too.

  • Accepts the MTC Uniform Sales and Use Tax Resale Certificate

Selling into New Mexico from another state? Watch the threshold

Out-of-state sellers must register once sales into New Mexico pass $100,000 (previous calendar year), even with no office here.

  • Only taxable gross receipts count. There is no transaction count threshold.
  • Marketplace providers with $100,000 or more in taxable gross receipts must register and collect, and a marketplace seller may deduct sales the provider collects tax on.

Note this New Mexico sales tax rule

Since July 1, 2025, local rates change only once a year in July, except in special cases like natural disasters.

NM
Step 6

Before your first payroll

Applies once you pay W-2 employees who work in this state.

Complete Form I-9 and W-4 for each hire

Form I-9 is never mailed to the government. You keep it in your own files and show it only if ICE or the Department of Labor asks for an inspection.

  • The employee completes Section 1 by their first day of work
  • You review their original documents and complete Section 2 within 3 business days of the start date
  • Keep it for 3 years after the hire date or 1 year after employment ends, whichever is later
  • Store I-9s together, separate from personnel files, so an inspection doesn't expose other records
  • Remote hire? Have an authorized representative check documents in person, or, if you use E-Verify, use the DHS remote video inspection option
  • Also collect a federal W-4 for withholding

Post federal workplace notices

Federal posters (minimum wage, EEO, FMLA if you have 50+ employees, and others) go alongside the state ones.

Register for unemployment insurance with Department of Workforce Solutions

Register once you pay wages to employees working in New Mexico. Reports and payments are usually quarterly.

  • 2026 new employer rate: 1.0% to about 1.2%, depending on industry (most industries 1.0%)
  • Taxable wage base: $34,800
  • UI is reported and paid quarterly. Employers also pay a workers' comp fee of $4.30 per employee per quarter ($2.00 may be deducted from the worker), filed with Taxation and Revenue on Form WC-1.

Buy workers' compensation insurance

Required at 3 or more employees (1 or more for construction businesses licensed by CID). Employers with fewer than 3 employees can buy coverage voluntarily. A $4.30 quarterly assessment per worker is paid on top of the premium.

Report each new hire

Report full-time, part-time and temporary hires and rehires through the NM New Hire website or the New Mexico Employer Online Portal.

Follow New Mexico pay timing rules

New Mexico's wage payment rules:

  • Pay frequency: At least twice a month, with paydays no more than 16 days apart. Some salaried executive, administrative and professional staff can be paid monthly.
  • Final pay: Fired: within 5 days, or 10 days for task, piece or commission pay. Quit: by the next regular payday.
  • Overtime: 1.5x pay after 40 hours in a workweek. No daily overtime.

Pay at least New Mexico minimum wage

$12.00 an hour.

  • Tipped employees: $3.00 (tips must bring pay to at least $12.00)
  • Local rates: 2026: City of Santa Fe $15.40 (since March 1, 2026), Santa Fe County $15.40, Las Cruces $13.01, Albuquerque and Bernalillo County $12.00 (the state rate applies).
  • Coming up: No statewide increase announced for 2027. City of Santa Fe rises to $17.50 on Jan 1, 2027.

Set up required sick leave

The Healthy Workplaces Act covers every private employer, regardless of size. Employees earn 1 hour per 30 hours worked from day one and can use up to 64 hours a year.

  • You can front-load 64 hours at the start of the year instead of tracking accrual
  • Unused leave carries over, but you can cap use at 64 hours a year

Retirement plan: no state mandate

This is a voluntary state retirement program, not a mandate. It was set to launch July 1, 2024, but was put on indefinite hold because the legislature did not fund it.

NMIf it applies

Adopt a harassment policy (training recommended)

New Mexico doesn't require harassment training for private employers. A written policy and a yearly refresher are still best practice.

NMIf it applies

Post New Mexico workplace notices

Display the state's required labor law posters where employees can see them, along with the federal posters. Workers' comp notices come from your carrier.

NMFree

Pay the quarterly workers' comp fee

Employers pay $4.30 per employee each quarter to Taxation and Revenue on Form WC-1, separate from insurance premiums. Up to $2.00 can be deducted from the worker's pay.

Check city and county sick leave laws

These local laws apply to employees who work within the city or county, on top of the state rules. Where they differ, follow whichever is more generous to the employee.

  • Bernalillo County (unincorporated areas): Employers with 2+ employees in unincorporated Bernalillo County; new businesses exempt for first 12 months; 1 hour per 32 hours worked; cap 28, 44 or 56 hours a year depending on employer size; leave usable for any reason.
Step 7

Paying 1099 contractors

Collect a W-9 before the first payment

The W-9 gives you the contractor's legal name and tax ID for their 1099. Check the classification first: if you control how and when they work, they may legally be an employee.

Send Form 1099-NEC to contractors

File with the IRS and send the contractor a copy by January 31. For payments made in 2026 and later, the reporting threshold is $2,000 per contractor per year (it was $600 before).

FederalDue Jan 31
Step 8

Stay in good standing

Recurring deadlines. Put these on your calendar now.

Skip the FinCEN BOI report (U.S. companies are exempt)

FinCEN's final rule, effective August 14, 2026, permanently exempts companies formed in the U.S. from beneficial ownership reporting. Ignore letters or emails demanding a BOI filing fee; they're a common scam. Only companies formed outside the U.S. still file.

Join the Patient's Compensation Fund to get the caps

Malpractice damage caps and the $250,000 personal liability limit apply only to qualified providers. You qualify by carrying the required coverage and paying the fund surcharge through your insurer.

File the Biennial Report (corporations only)

Keeps your business in good standing with the state. Missing it can lead to penalties or dissolution.

NMEvery 2 years, by the 15th day of the 4th month after the end of the fiscal year. LLCs do not file annual or biennial reports.$25New Mexico: Annual report

Know your state business taxes

Corporations may owe a $50 corporate franchise tax even if they owe no corporate income tax. A late corporate report costs $200.

NM

File quarterly unemployment reports and withholding returns

File unemployment wage reports each quarter and state withholding returns on the schedule you're assigned (if the state has income tax), plus the annual W-2 reconciliation.

NMQuarterly

File sales tax returns on time

Monthly if tax averages more than $200 a month, quarterly if under $600 a quarter, or semiannually if under $1,200 per six months; returns are due the 25th of the month after the period. File a zero return if you had no sales; skipping it can bring penalties.

NM

Deadline calendar

Recurring dates for New Mexico and federal filings. A payroll service handles most payroll lines, but you should know they're happening.

WhenWhatFiled with
Jan 1City of Santa Fe minimum wage rises to $17.50 (2027)New Mexico
Monthly or quarterlyFile the combined gross receipts and withholding return (CRS) on TAPNew Mexico
QuarterlyUI wage reports and contributions due to Workforce SolutionsNew Mexico
QuarterlyWorkers' comp fee due on Form WC-1New Mexico
15th day of 4th month after fiscal year end (every 2 years)Corporation Biennial Report due ($25)New Mexico
Assigned scheduleSales tax return (file a zero return if no sales)New Mexico
Jan 31W-2s to employees and SSA (with W-3); Form 940; 4th-quarter Form 941IRS / SSA
Jan 311099-NEC to contractors and IRSIRS
15th monthlyFederal payroll tax deposit (monthly depositors)IRS
Apr 30 · Jul 31 · Oct 31Form 941 for the quarterIRS
Jul 31Form 5500 or 5500-SF, if you sponsor a 401(k) (Oct 15 with Form 5558 extension)DOL (EFAST2)

Last verified: October 27, 2026

Common questions

How much does it cost to form an LLC in New Mexico?

The New Mexico state filing fee for an LLC is $50. That's the fee to form your LLC with the state. Expect other costs too, such as a registered agent service if you use one, licenses, and annual filings. See the checklist above for each step.

Do I need a seller's permit in New Mexico?

You need to register to collect sales tax in New Mexico if you sell taxable products or services there. The state rate is 4.875%, and local taxes may add to it. Registration cost: Free.

When does an out-of-state business have to collect New Mexico sales tax?

Out-of-state sellers must register once their sales into New Mexico pass $100,000 a year. Having an employee or office in New Mexico also creates nexus right away.

What does a New Mexico business have to file after it opens?

Recurring filings include: file the Biennial Report (corporations only); file quarterly unemployment reports and withholding returns; file sales tax returns on time. The deadline calendar above lists the dates.

Checklists for every state

This guide organizes official requirements. It isn't legal or tax advice. Fees, forms, and deadlines change, so confirm on each linked state page before you file, and talk to an attorney or CPA about your specific situation.