If you want to start and run a New Mexico limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for New Mexico LLCs.
Unlike most other states, New Mexico does not require LLCs to file annual reports. However, New Mexico does require LLCs to file an Income and Information Return for Pass-Through Entities (PTE). You can download a copy of the required form from the website for New Mexico Taxation and Revenue Department (TRD).
All New Mexico LLCs are required to register with the New Mexico Taxation and Revenue Department (TRD) and obtain a Combined Reporting System (CRS) identification number. The registration can be completed online or on paper (using Form ACD-31015, Application for Business Tax Identification Number).
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay income taxes, only their members do. Some states do impose a separate tax or fee on LLCs for the privilege of doing business in the state. New Mexico, though, is not one of those states.
However, in some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of New Mexico, like almost every other state, has a corporation income tax. In New Mexico, the corporate tax is a calculated at a small series of marginal rates. If your LLC is taxed as a corporation, you will have to pay this tax. In addition, New Mexico assesses a so-called corporate franchise tax (typically $50 per year). If your LLC is taxed as a corporation it also will be subject to this tax. Both taxes are payable to the TRD. Use the state's corporation income tax return (Form CIT-1 NM) to pay both taxes. For more details, check Nolo’s article, 50-State Guide to Business Income Tax, or the TRD website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, New Mexico employers also must pay taxes to the state.
First, you'll need to withhold and pay employee income taxes to the TRD. You'll need to file withholding taxes on a periodic basis (typically monthly or quarterly) using some Form CRS-1. You should also maintain an annual summary of employee withholding using Form RPD-41072. For more information, check the TRD website.
In addition, you'll probably need to register to pay state unemployment insurance (UI) taxes. These taxes are handled through the New Mexico Department of Workforce Solutions (DWS). You must register for these taxes online. Then, on a quarterly basis, you will report on wages and pay UI taxes to DWS. For more information, including regarding the required electronic reporting system, check the DWS website.
If your LLC will sell goods to customers in New Mexico, you will need to collect and pay the state's gross receipts tax (essentially a sales tax). You register for this purpose when you complete the required registration with the TRD for a CRS ID number (see above). You can register using Form NC-BR. After you've registered, you'll be sent a Certificate of Registration. You report pay the gross receipts tax using Form CRS-1. You can do file on paper or online. For more information, check the TRD website.
If you will be doing business in states other than New Mexico, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in New Mexico, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.