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How to Get a Tax ID Number in New Mexico: A Comprehensive Guide

Securing a tax ID number in New Mexico is crucial for businesses operating within the state, enabling them to legally conduct sales, hire employees, and fulfill their tax obligations. The process primarily involves obtaining either a Federal Employer Identification Number (EIN) from the IRS or a New Mexico Tax Identification Number (also known as a CRS number) from the New Mexico Taxation and Revenue Department (NMTRD), depending on the nature and structure of your business.

Understanding the Types of Tax ID Numbers in New Mexico

Before diving into the application process, it’s essential to distinguish between the different types of tax ID numbers required in New Mexico:

Federal Employer Identification Number (EIN): Issued by the IRS, this number is required for partnerships, corporations, LLCs with multiple members, and businesses that hire employees. It’s essentially your business’s social security number.
New Mexico Tax Identification Number (CRS Number): Issued by the NMTRD, this number (also referred to as the Combined Reporting System (CRS) Identification Number) is mandatory for businesses that sell goods or services subject to New Mexico gross receipts tax (GRT). This includes most businesses operating in the state.

Obtaining a Federal Employer Identification Number (EIN)

For many businesses, especially those with employees or operating as a corporation or partnership, the first step is securing a federal EIN. The good news? It’s free and relatively straightforward.

Applying Online

The easiest and quickest way to obtain an EIN is through the IRS website. Here’s the process:

Visit the IRS Website: Navigate to the “Apply for an Employer Identification Number (EIN) Online” section of the IRS website.
Determine Your Eligibility: The online application requires that you have a valid Taxpayer Identification Number (SSN, ITIN, or EIN).
Complete the Application: The online application is a step-by-step process that asks for information about your business, including its legal structure, its principal activity, and its mailing address.
Submit the Application: Once you’ve completed the application, review it carefully and submit it electronically.
Receive Your EIN: If your application is approved, you’ll receive your EIN immediately. You can then download, save, and print your confirmation notice.

Applying by Mail or Fax

While the online method is the fastest, you can also apply for an EIN by mail or fax.

Download Form SS-4: Download Form SS-4, Application for Employer Identification Number, from the IRS website.
Complete Form SS-4: Fill out the form accurately and completely, providing all the required information about your business.
Mail or Fax the Application:
- For mailing, send the completed Form SS-4 to the IRS address listed on the form’s instructions based on your primary business location.
- For faxing, use the fax number provided in the Form SS-4 instructions for your state.
Processing Time: Keep in mind that processing applications submitted by mail or fax takes significantly longer than applying online. Expect several weeks for processing and receiving your EIN.

Obtaining a New Mexico Tax Identification Number (CRS Number)

The New Mexico CRS number is essential for businesses that collect Gross Receipts Tax (GRT). GRT is a tax imposed on the total amount of money or the value of other property received from selling property in New Mexico, selling services performed in New Mexico, or leasing property employed in New Mexico.

Registering Online

The most efficient way to register for a CRS number is through the New Mexico Taxpayer Access Point (TAP).

Create a TAP Account: Visit the NMTRD website and create an account on the TAP system.
Register for a CRS Number: Once logged in, navigate to the registration section and select the option to register for a CRS number.
Complete the Application: Provide accurate information about your business, including its legal structure, physical address, contact details, and the types of goods or services it will be selling.
Indicate Business Activities: You will need to specify the types of business activities you engage in, such as retail sales, services, or leasing.
Submit the Application: After completing the application, review all the information and submit it electronically through the TAP system.
Receive Your CRS Number: Once your application is approved, you will receive your CRS number through the TAP system, often instantly.

Registering by Mail

If you prefer, you can register for a CRS number by mail.

Download Form ACD-31020: Download Form ACD-31020, Application for Business Tax Identification Number, from the NMTRD website.
Complete Form ACD-31020: Fill out the form accurately, providing all the required information about your business.
Mail the Application: Mail the completed Form ACD-31020 to the address specified on the form:
- New Mexico Taxation and Revenue Department P.O. Box 25125 Santa Fe, NM 87504-5125
Processing Time: Applications submitted by mail typically take longer to process than online applications. Allow several weeks for processing and receiving your CRS number.

FAQs: New Mexico Tax ID Numbers

1. Do I need both an EIN and a CRS number?

It depends. If you have employees or are structured as a corporation, partnership, or multi-member LLC, you’ll need an EIN. If you sell goods or services subject to GRT in New Mexico, you’ll need a CRS number. Many businesses need both.

2. What if I am a sole proprietor with no employees?

As a sole proprietor, you generally don’t need an EIN, and you can use your Social Security number for federal tax purposes. However, you’ll still need a CRS number if you’re selling goods or services in New Mexico that are subject to GRT.

3. How much does it cost to get a tax ID number?

Both the federal EIN and the New Mexico CRS number are free to obtain.

4. How long does it take to get a tax ID number?

Applying for an EIN online provides immediate results. Applying for a CRS number online via TAP is also usually very quick, potentially providing your number instantly upon approval. Applications submitted by mail can take several weeks.

5. What information do I need to apply for a CRS number?

You will need information about your business, including its legal name, business address, contact information, business structure, and the nature of your business activities.

6. What is Gross Receipts Tax (GRT)?

GRT is a tax imposed on the total amount of money or the value of other property received from selling property, selling services, or leasing property in New Mexico. It’s similar to a sales tax but is levied on the seller rather than the buyer.

7. How do I file and pay Gross Receipts Tax in New Mexico?

You can file and pay GRT electronically through the New Mexico Taxpayer Access Point (TAP). You’ll need to file periodic returns (monthly, quarterly, or annually) and pay the tax due. The frequency of your filing depends on the amount of GRT you collect.

8. What if I make a mistake on my application?

If you make a mistake on your EIN application, contact the IRS Business & Specialty Tax Line. If you make a mistake on your CRS number application, contact the NMTRD.

9. What if I change my business address or ownership?

You must notify the IRS and the NMTRD of any changes to your business information, such as a change of address, ownership, or business structure. Update your EIN information with the IRS. Update your CRS number information through the NMTRD TAP system or by contacting them directly.

10. Can I get a CRS number if my business is based outside of New Mexico?

Yes, if you are conducting business in New Mexico that generates gross receipts subject to GRT, you need a CRS number, regardless of your business’s physical location.

11. What happens if I operate without a required tax ID number?

Operating without the necessary tax ID numbers can result in penalties, fines, and legal issues. Ensure you obtain the required numbers before conducting business.

12. Where can I find more information and assistance?

IRS: https://www.irs.gov/
New Mexico Taxation and Revenue Department (NMTRD): https://www.tax.newmexico.gov/

Obtaining the correct tax ID numbers is fundamental to legally operating a business in New Mexico. By following the steps outlined and understanding the distinctions between the EIN and CRS numbers, you can ensure compliance and avoid potential issues. Don’t hesitate to consult the resources provided by the IRS and NMTRD for further clarification and assistance.