Starting a venture in New Mexico can be quite exciting, but if you don’t know what you’re doing, it can also be overwhelming. As an entrepreneur, your primary goal is to ensure you have a strong business model and know how you’re going to make money. However, you can’t neglect the legal details of starting a new business, which includes securing licenses and permits.
Thankfully, getting the right licenses and permits for your company isn’t an ordeal. The state of New Mexico allows you to get all the paperwork you need and submit it online for added convenience. That said, you still have to do the due diligence of determining which permits are necessary before opening your doors.
To help you move through this process, we’ve compiled a list of the most common licenses you may need and the steps you must take to obtain them. Here’s everything you need to know about how to get small business licenses and permits in New Mexico.
Generally speaking, there are two primary reasons why the government requires all businesses to get some form of license or permit to operate legally. First, it’s to ensure that all companies pay the correct taxes and fees for running their operations. For example, a seller’s permit allows you to collect sales tax on behalf of the state. Similarly, liquor licenses are also designed to collect various taxes on alcohol and tobacco.
The other reason for getting licensed and/or permitted is to protect the public. A license shows that you’re following state and local regulations, such as food handling laws, environmental safety, and more. Trust between consumers and businesses is imperative, and licenses help build that trust.
Although most people throw around the terms “license” and “permit” interchangeably, there are two distinctions between them. First, licenses are often generic, regulating a type of industry. For example, a liquor license allows you to sell alcohol, although you may need to get a specific type of license depending on how and where you sell your products. Permits are often more specific to a particular method of doing business.
Second, licenses are often renewed annually, while permits may only be for a certain period. For example, you may need to secure a permit to sell at a festival or temporary event. Some permits also renew annually, though, depending on the situation.
No matter what, you’ll need to register your business with the Taxation and Revenue Department (TRD) and the New Mexico Secretary of State. After registering, you’ll get a business Tax ID number from the TRD. You may also receive other tax numbers depending on the nature of your company. However, there is a specific order you must follow to get your ID. First, you must get an Employer ID Number (EIN) from the IRS. Then, you must register your business with the Secretary of State and receive a registration number. Finally, you can get a tax ID from the TRD.
You may also need additional permits and licenses. Some common examples include food service, liquor, contracting, hair styling, accounting, and many other professional services. The New Mexico Business Portal outlines each of these industries and guides you to the right forms and fees required for each.
Some industries, like alcohol, agriculture, and mining, fall under both state and federal jurisdiction. For example, if you’re opening a liquor store or brewery, you’ll have to register with the Alcohol and Tobacco Tax and Trade Bureau (TTB). You can find a list of all the industries and the agencies in charge of them online, thanks to the Small Business Administration. So, if your business is in one of these categories, you’ll have to get two sets of permits and/or licenses.
Here’s a rundown of the various state-specific licenses and permits you may need to open your business. While this list isn’t exhaustive, it should give you a good idea of what to expect when applying.
You can create an account with the Taxation and Revenue Department online. This account will allow you to register your business and receive any tax IDs you need to conduct business in the state. In addition to a generic Business Tax ID, you may also receive numbers for compensation tax (when doing business with other companies out of state), gross receipts (aka sales tax), or wage withholding tax (for eligible employees).
As with most states, New Mexico imposes a sales tax on all items purchased or leased within the state. However, New Mexico does it differently than other places. Instead of a seller’s permit, you need to get a Gross Receipts Tax ID. The way it works is that the state charges you (the business owner) a tax instead of the customer. The rate varies from 4.8 to 8.9 percent, depending on where you do business (cities and counties get a cut). While you can pass these costs to your customers, you’re responsible for paying them out of your gross total earnings for the year.
Restaurants, food trucks, caterers, grocery stores, and convenience stores all sell food, and each one requires a food service permit to operate in the state. The New Mexico Environment Department oversees all food service operations. Rather than separate applications based on the type of food service, NMED only has one application form, and you simply fill out the details of your business. That said, if you’re selling food at an event, you have to fill out a temporary food service application instead. Also, Albuquerque and Bernalillo County have their own health departments. So, if you operate in one of those places, you’ll have to go through their department instead.
The New Mexico Regulation and Licensing Department is in charge of liquor licenses. However, the department has an online portal to make it easier to submit documents and get approval for your business. The NM-PLUS system speeds up the licensing process so you can open your doors that much sooner. As with other states, there are different permits for different types of operations. For example, restaurants serving alcohol need a license that is different from a brewery that makes and sells its own products.
Many other types of businesses require specialty licensing, and most of these industries are regulated by the New Mexico Regulation and Licensing Department. Examples include accountants, barbers, occupational therapists, massage therapists, home inspectors, real estate agents, and many more. Thankfully, any profession regulated by the NMRLD can use the NM-PLUS system. Here’s a full list of services that fall under the NMRLD’s jurisdiction.
Also, don’t forget about federal licensing since that will be a separate application and approval process. First, find the agency in charge of your industry from this list. Then, you should be able to apply online, making the process smoother and simpler overall.
Thankfully, New Mexico uses online portals for virtually all business operations. However, when registering a corporation or partnership, you must submit the paperwork by mail. LLCs can register online, and sole proprietorships don’t have to register at all with the Secretary of State. Each application also comes with a fee, so make sure to pay that immediately and in full.
Although submitting paperwork online is simple, the approval process in New Mexico is relatively slow. Even something as easy as getting a business tax ID can take up to six weeks. Similarly, getting a liquor license can take up to four to five months, depending on the complexity of your business. While you should receive a notification once your application is processed, it’s best to check online to verify your status.
In New Mexico, only corporations and non-profits are required to file ongoing reports with the Secretary of State (every year for nonprofits, and biennially for corporations). LLCs and sole proprietorships don’t have to file anything to remain in good standing with the SOS.
However, other licenses and permits (like food service or liquor) must be renewed annually. Some renewals happen on a specific date (like August 1st for restaurants with a liquor license), while others renew 12 months after you were approved. While the department in charge of your license may send a renewal reminder, it’s best to keep track of these dates within your own records. Otherwise, if you miss a deadline, you’ll have to re-apply your business, which can disrupt your operations.
Overall, getting licensed and permitted in New Mexico is relatively easy, thanks to the online portals offered by the state. As long as you have all of your business details ready to go, you should be able to expedite this process and get your venture off the ground as soon as possible.
If you run a business without the proper licenses or permits, you could get shut down by the state. Not only could you lose your company, but you may incur heavy penalties and fines for operating illegally.
Sole proprietorships do not need to register with the Secretary of State or obtain a business tax ID with the Taxation and Revenue Department.
Once you have the necessary business tax IDs, you don’t need to renew them. However, if you’re running a corporation, you must file an annual report every other year with the Secretary of State to stay in good standing.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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