New Mexico's business registration requirements center on its unique Gross Receipts Tax (GRT) system rather than traditional sales tax, creating a broader compliance net that captures many service businesses exempt in other states.
What distinguishes New Mexico's approach is the combination of streamlined state-level registration (no statewide business license required) with highly localized licensing requirements that vary dramatically by municipality.
New Mexico eliminated transaction-count thresholds in recent years, now using only the sales revenue standard.
New Mexico establishes tax nexus through its Gross Receipts Tax system, which functions differently from traditional sales taxes by applying to a broader range of goods and services sold within the state.
Remote sellers must register for New Mexico GRT collection when gross receipts from sales to New Mexico customers exceed $100,000 in the previous calendar year. This threshold includes all taxable sales of tangible personal property, licenses, and services sourced to New Mexico, regardless of delivery method.
The $100,000 threshold applies only to taxable sales; exempt transactions don't count toward the nexus calculation. New Mexico simplified its economic nexus rules by eliminating transaction-count requirements, meaning businesses need only track sales volume rather than managing dual thresholds.
Marketplace facilitators meeting the $100,000 threshold must register and collect GRT on behalf of third-party sellers. When a registered marketplace facilitator handles your New Mexico sales, those transactions don't count toward your individual nexus calculation since the facilitator bears collection responsibility.
Any physical presence in New Mexico creates an immediate GRT nexus regardless of sales volume:
Businesses with a New Mexico nexus must register with the New Mexico Taxation and Revenue Department for a Combined Reporting System (CRS) identification number using Form ACD-31015. Registration is free and can be completed online, by mail, or at district tax offices.
Once registered, filing frequency depends on your business volume: monthly for larger operations, quarterly or semi-annually for smaller businesses.
The state assigns your reporting schedule based on anticipated tax liability. Returns and payments are due by specific dates determined by your filing frequency.
New Mexico subjects businesses to corporate income tax when they conduct business within the state through any established presence or derive income from New Mexico sources.
Unlike many states, New Mexico uses both factor-presence nexus statutes, such as a $100,000 sales threshold for gross receipts tax, and traditional “conducting business” standards for establishing nexus for corporate income tax purposes. This includes:
Businesses with New Mexico income tax nexus must file annual corporate income tax returns by the 15th day of the fourth month after their tax year ends. Estimated payments are due quarterly for businesses expecting to owe $5,000 or more in annual tax.
New Mexico doesn't impose minimum tax requirements, but businesses must file returns even if no tax is due when nexus exists. The registration process occurs through the same CRS system used for GRT registration.
Employment tax nexus in New Mexico can be triggered when employees perform work within the state, but certain thresholds and conditions, such as duration of work and revenue levels, must be met.
New Mexico employment tax nexus is established by:
The location where work is performed determines nexus, not where the employee is officially based or receives paychecks. A Colorado company with one employee working remotely from Albuquerque can establish New Mexico employment tax nexus.
Employment nexus requires registration for multiple tax types:
New Mexico's approach to digital businesses creates broad compliance obligations that extend beyond traditional brick-and-mortar operations.
Digital products and SaaS subscriptions are generally taxable under New Mexico's GRT system.
The $100,000 economic nexus threshold applies to all taxable sales, including electronically delivered software, cloud-based services, and digital content accessed by New Mexico customers.
Marketplace facilitators must collect and remit GRT when facilitating sales exceeding $100,000 to New Mexico customers. Individual sellers using registered marketplace facilitators can exclude those sales from their personal nexus calculations.
Affiliate marketing relationships or drop-shipping arrangements with New Mexico-based partners can create physical presence nexus requiring immediate registration. Additionally, third-party fulfillment centers storing your inventory establish physical nexus regardless of your direct business activities.
Establishing tax or employment nexus in New Mexico often requires foreign registration with the New Mexico Secretary of State.
Although tax registration and foreign entity qualification are separate processes, crossing economic nexus thresholds often indicates sufficient business activity to require corporate registration.
Once nexus is established, registration must occur promptly:
New Mexico expects comprehensive documentation supporting nexus determinations:
Businesses must maintain records for audit purposes, with the state able to assess back taxes for periods when nexus existed but registration was missing.
New Mexico's unique GRT system and complex local licensing requirements create compliance challenges that multiply when managing operations across multiple states.
Discern eliminates the uncertainty by providing automated filings, streamlined registration processes, and comprehensive compliance tracking that ensures your New Mexico obligations are met.
Ready to streamline your New Mexico compliance requirements? Try Discern today.
.png)
.png){kind=small}