New Mexico Business License

Written by: Nik Ventouris

Last updated:

New Mexico Business License

Starting a business in New Mexico comes with its own set of challenges. While all businesses must obtain a New Mexico Business Tax Identification Number, some businesses may need a number of additional federal, state, and local licenses.

Each city and county in New Mexico also has its own unique set regulations, which further complicates the path to full compliance with all licensing requirements. This New Mexico Business License guide aims to simplify this process by outlining the various permits and licenses you may need to legally operate your business in New Mexico, and then providing guidance on how to obtain them.

Recommended: LegalZoom identifies all the local, county, state, and federal licenses that you need, sparing you hours of research and potential compliance headaches. Start now with packages beginning at just $99.

4.5 out of 5 starsLegalZoom ($99+)

Do I Need a Business License in New Mexico

In New Mexico, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

  • Business Tax Registration: Every business must obtain a Business Tax Identification Number from the New Mexico Taxation and Revenue Department in order to record and collect taxes on their revenue. You can file online for free or submit the paper application to your district tax office
  • Professional Licenses: New Mexico requires businesses in certain professions to obtain a number of specific licenses. In order to construct, alter, repair, or remove a building or structure in New Mexico, for example, a business will need the appropriate license issued by the Construction Industries Division (CID) of the state’s Regulation and Licensing Department
  • Environmental Permits: If your business’s activities could impact the general public’s health or the environment, you may need a specific state license or permit. Any businesses selling food items to the public like restaurants, food trucks, and delis, for example, must submit a paper application to the New Mexico Environment Department, Environmental Health Bureau

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within New Mexico plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

  • Local: Your business must comply with a number of licenses administered at a local level, which can vary wildly based on your specific municipality. Businesses in Albuquerque, for example, must obtain a liquor license from the city’s Planning Department if they intend to sell alcohol
  • State: New Mexico also regulates a number of different industries at the state-level. For instance, businesses seeking to sell tobacco in this state must submit an application to the New Mexico Regulation and Licensing Department
  • Federal: If your business operates within certain industries or does specific types of work, you might need a license from the federal government. These include the alcohol, aviation, firearms and explosives, radio and television broadcasting, and transportation industries, among others

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

Streamline Your Business Licensing

LegalZoom identifies all the local, county, state, and federal licenses that you need, sparing you hours of research and potential compliance headaches. Start now with packages beginning at just $99.

4.5 out of 5 starsLegalZoom ($99+)

How to Get a Business License in New Mexico

In order to get your business license(s) in New Mexico, you will need to complete the following steps:

  • Form Your Business
  • Obtain an Employer Identification Number (EIN)
  • Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in New Mexico, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in New Mexico to register as a Limited Liability Company (LLC). Here are a few reasons for why:

  • Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
  • Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
  • Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
  • Ease of Formation: With the New Mexico Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Recommended: More than 72% of our readers form their LLC using a professional filing service. Our recommended service provider is:

4.7 out of 5 starsNorthwest Registered Agent ($29 + state fees)

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

  • Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
  • By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
  • By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

  • Local Licenses: Most cities and counties in New Mexico have their own licensing requirements in addition to those imposed by the state. For example, the City of Santa Fe offers several specific licenses for businesses based in the city
  • Statewide Licenses: As is the case in many other US states, New Mexico manages a number of licenses at the state level. Most businesses in professions like banking, law, and real estate, for example, must obtain one of these statewide licenses
  • Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: For more detailed information on the federal licenses your business may need, it’s best to check with the US Small Business Administration.

Step 4: Renewal of Licenses and Permits

Many businesses must renew their business licenses periodically — typically every few years — in order to keep them valid. If you’re uncertain whether you need to renew any of your business’s licenses, make sure to reach out to the agency that issued your business license for clarification.

Alternatively, due to how complicated each step of applying for and renewing business licenses is, third-party services that handle this entire process are becoming an increasingly popular option.

If you’re interested in finding out more about this process, see our article on How to Get a Business License.

How Much is a Business License in New Mexico

Understanding a business’s potential New Mexico business license cost is essential for entrepreneurs and business owners. First, all businesses in the state will need a New Mexico Tax Identification Number. This number essentially functions as a standard commercial business license and has no application fee.

At the local level, however, your licensing needs may grow a bit more complex based on your county and the type of business you run. Fees for local business licenses can vary widely, ranging from $15 to $1,000. Moreover, some businesses, such as restaurants or healthcare providers, may require specialized licenses or permits that can add to their total licensing cost. Licenses to sell alcohol can be particularly expensive, for example, with some costing up to $10,000.

Ultimately, the total cost of obtaining all the business licenses you need will depend on the exact combination of permits and licenses your business requires. Using third-party services to help you identify the mix of licenses you’ll need is a great way to quickly get an idea of your total licensing cost.

New Mexico Business License FAQ

Does New Mexico require a business license?

Yes, every business within the state must obtain a New Mexico Business Tax Identification Number — which is what enables them to collect and pay tax on their revenue. In addition to this, New Mexico businesses may require various supplementary licenses based on their industry or business type. For more information, see our New Mexico Business License article.

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

Creating an LLC in New Mexico comes with a business registration application fee of $50, although you may need to pay other charges if you require additional or expedited services. The next step after setting up your LLC involves obtaining a new business address and the required license(s) for your company. To learn more about how to do this, see our How to Get a Business License article.

How do I get a New Mexico state tax ID number?

To obtain a New Mexico state tax ID number, you need to complete a registration process with the New Mexico Taxation and Revenue Department. You may complete this process online, and it’s an essential step to ensure compliance with your tax obligations.

How do I reserve a business name in New Mexico?

To secure a business name in New Mexico, each business owner must submit a Name Reservation Request form to the Secretary of State and pay the relevant business registration fee. Once approved, the name they reserve will be kept safe for 120 days.

For all related articles, have a look at our How to Get a Business License page.