How to Register for a Sales Tax Permit in New Mexico

Who Needs a Sales Tax Permit in New Mexico

In New Mexico, businesses engaging in selling, leasing, or granting licenses to use tangible personal property, as well as providing certain services, are obligated to collect and remit sales tax, known locally as Gross Receipts Tax (GRT). This applies to local storefronts, service providers, and e-commerce businesses alike.

The economic nexus threshold in New Mexico states that businesses with over $100,000 in annual sales in the state must collect and remit GRT, regardless of a physical presence.

Typical examples include a local boutique, a contractor offering taxable services, and an out-of-state online seller surpassing the sales threshold.

Steps to Register for a Sales Tax Permit in New Mexico

Follow these steps to register for a gross receipts tax permit in New Mexico.

1. Gather Necessary Information

You will need to provide the following details:

• Legal Business Name: Be consistent with the name registered with the New Mexico Secretary of State.
• Business Location Address: A physical address in New Mexico is required; P.O. boxes may not suffice.
• Federal Employer Identification Number (FEIN): Obtain this from the IRS if not yet acquired.
• Contact Information: Provide phone numbers and email addresses for key business contacts.
• North American Industry Classification System (NAICS) Code: The code used to classify your business sector.
• Date Business Began in New Mexico: Indicate when your business operations started or will start in the state.

2. Register via the New Mexico Taxpayer Access Point (TAP)
To register, access the Taxpayer Access Point (TAP) on the state’s official site, select “Apply for a New Business Tax,” enter the required information accurately, review your application thoroughly, and submit it through the online portal.

3. Wait for Confirmation

Generally, processing your permit application takes a couple of business days. Once approved, you will receive your gross receipts tax permit authorizing you to collect GRT in New Mexico.

We understand how daunting this can be, especially when trying to manage your business. doola’s Bookkeeping services can help streamline the process, ensuring you are fully compliant and minimizing stress. 

Understanding Your Sales Tax Responsibilities in New Mexico

Businesses in New Mexico typically file gross receipts tax returns monthly, quarterly, or annually based on their sales volume. Applying the correct tax rates, which vary by location including state, county, and city levels, is crucial. New Mexico allows for specific exemptions and deductions, such as resale certificates and certain nonprofit organizations, that affect tax collection.

Common Pitfalls to Avoid

• Not registering for a gross receipts tax permit when necessary.
• Applying incorrect tax rates for different jurisdictions.
• Missing filing deadlines and facing penalties.
• Failing to recognize exempt sales and inadequate documentation for resale certificates.

Maintenance of Compliance & Filing Returns

To file gross receipts tax returns, access the New Mexico TAP portal, allowing you to submit returns and payments electronically. You might also consider leveraging automated solutions to simplify tax collection and enhance accuracy.

Note that doola can support your bookkeeping, ensuring your business remains compliant effortlessly.

FAQs About Sales Tax Permits in New Mexico

How long does obtaining a sales tax permit take?

New Mexico’s Taxation and Revenue Department typically takes a few business days to process a permit application.

Do I need to renew my gross receipts tax permit?

No, the permit in New Mexico does not require renewal as long as you maintain compliance.

What if I cease business operations in New Mexico?

You must formally close your gross receipts tax account by informing the New Mexico Taxation and Revenue Department.

Are online sellers needed to collect GRT in New Mexico?

Indeed, if online sellers surpass the $100,000 economic nexus threshold, they must collect GRT.

Stay Compliant With doola

Registering for a sales tax permit is essential for any business operating in New Mexico. Staying compliant means being aware of deadlines, accurate tax collection, and understanding exemptions.

Businesses should consider professional assistance to ensure everything is managed correctly. For comprehensive financial solutions, doola can offer guidance to ensure your compliance, facilitating your business’s success effortlessly.