Getting a sales tax ID is one of the first steps you must do if you want to launch a business in New Mexico. This is also referred to as a CRS ID or a Gross Receipts Tax ID. In New Mexico, obtaining a sales tax ID is a rather simple procedure. What you should know is as follows.
Before we get started on the application procedure for a sales tax ID, let’s dispel a common misunderstanding. An Employer Identification Number (EIN) and a CRS ID are not the same thing. The federal government issues EINs, which are utilized for federal tax purposes. On the other hand, a CRS ID is issued by the state of New Mexico and is utilized for state-level taxation.
You must have a company entity established in New Mexico before you can apply for a sales tax ID. The sole proprietorship is one typical form of business entity. One individual owns and runs this company. Every part of the company is under the owner’s control, and any earnings or losses are declared on their personal tax return.
You must pay your Gross Receipts Tax after you get a sales tax ID in New Mexico. This is a tax based on your company’s gross revenue. Your location and the kind of business you run affect the rate. Through the website of the New Mexico Taxation and Revenue Department, you can make an online payment for your gross receipts tax.
What does New Mexico’s sales tax look like? A tax on the sale of goods and services is known as sales tax. The rate of sales tax in New Mexico is 5.125%. However, additional local taxes can be necessary depending on where you live. It’s vital to remember that the sales tax and the gross receipts tax are two separate taxes. Sales tax is based on the sale of products and services, whereas gross receipts tax is based on the total receipts of your company.
Finally, acquiring a sales tax ID in New Mexico is a crucial first step in launching a business. A sole proprietorship is a good choice for a business entity, and you should be ready to pay both sales tax and gross receipts tax. Keep in mind that an EIN and a CRS ID are not the same. Please feel free to contact the New Mexico Taxation and Revenue Department for help if you have any queries or concerns.