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Doing business in

New Mexico

Navigate New Mexico’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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new-mexico

Business Overview

New Mexico has growing strengths in aerospace, energy, advanced manufacturing, and film production. The state offers competitive incentives, particularly for sustainable energy and creative industries, and leverages its national laboratories to drive innovation and technology transfer.

Key Facts & Figures

Category Details
Capital Santa Fe
Major Cities Albuquerque, Las Cruces, Rio Rancho, Santa Fe, Roswell
State Sales Tax Rate 5.125% Gross Receipts Tax
Local Sales Tax Rate Up to 4.25% additional local taxes
Corporate Income Tax 9% for income over $100,000
Physical Nexus Threshold Physical presence through employees, offices, or sales representatives
Economic Nexus Threshold $100,000 in annual sales

Did you know?

New Mexico is a global leader in aerospace and defense technology, hosting key research facilities like Los Alamos National Laboratory.

Setup & Compliance

New Mexico offers streamlined business registration with unique tax considerations.

New Mexico Business Formation Steps:

  1. Choose Your Business Structure: Consider New Mexico’s tax environment for different entity types.
  2. Register Your Business: File formation documents with the New Mexico Secretary of State.
  3. Register for Tax Programs: Register with the Taxation and Revenue Department for gross receipts tax.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with the Department of Workforce Solutions if hiring employees.

Ongoing Compliance Requirements:

  • Biennial Reports: Most New Mexico entities must file biennial reports with the Secretary of State.
  • Gross Receipts Tax: New Mexico’s version of sales tax (5.125% base rate) applies to most business transactions.
  • Corporate Income Tax: Corporations pay progressive tax rates from 4.8% to 5.9%.
  • Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
  • Professional Licensing: Various professions require specialized licenses through state boards.

Hiring & Payroll

New Mexico balances business interests with moderate worker protections.

New Mexico Payroll Requirements:

  • Unemployment Insurance: Rates from 0.33% to 7.4% on first $28,500 of wages.
  • State Income Tax Withholding: Required with progressive rates.
  • Workers’ Compensation: Required for most employers.

New Mexico Employment Laws:

  • Minimum Wage: $11.50 per hour (increasing to $12.00 in 2024).
  • No state-mandated paid sick leave.
  • New hire reporting within 20 days.
  • Final paycheck due on next regular payday.
  • New Mexico is an at-will employment state with right-to-work laws.

State Incentives

New Mexico offers strategic economic incentives to promote business growth.

Key Business Incentives:

  • Job Training Incentive Program: Support for workforce development.
  • High Wage Jobs Tax Credit: Incentives for creating high-paying jobs.
  • Research and Development Tax Credit: Supports innovative company development.

Small Business & Startup Support:

  • New Mexico Small Business Development Center: Comprehensive business consulting.
  • Loan Guarantee Program: Support for small business financing.
  • Rural Business Development Grants.

Regulatory Considerations

New Mexico maintains a regulatory environment supporting diverse business sectors.

Key Business Regulations:

  • Data Privacy: Laws protecting consumer and business information.
  • Environmental Compliance: Regulations for energy and agricultural industries.
  • Professional Licensing: Required for various service-based professions.

Additional Regulatory Areas:

  • Energy and Natural Resource Compliance.
  • Agricultural Innovation Regulations.

Explore Tax & Compliance Topics

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