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Register Sales Tax Permit New Mexico

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Category : > Article Directory of Sales Tax Registration
Posted On : Tue Aug 16th,2016

A comprehensive guide to register CRS Identification Number in New Mexico. A person or a company who is engaged gross receipt tax, withholding tax and compensating tax register business with TDR (Taxation and Revenue Department).Acquaintance of law is inevitable, which helps to avoid any complication in the operation.

What is CRS Identification Number New Mexico?

The Combined Reporting System (CRS) is used for gross receipt tax, withholding and compensating tax.The CRS identification is obtained from the New Mexico taxation and revenue to collect the above mentioned receipts, withholding and taxes from consumers of the New Mexico.

There is no fee to obtain CRS Identification Number New Mexico and state of NM issues CRS number same day if it is applied electronically.

An exceptional exemption is filed with the New Mexico Department of Taxation and Revenue if the business does not withhold local and state taxes, collect gross taxable receipts and compensating tax.

What is the difference between gross receipts tax, withholding tax and compensating tax New Mexico?

Gross Receipt Tax: It is charged on the gross revenue, which are received from the following activities.

  • Selling tangible property in the state of New Mexico.

  • Leasing or licensing property employed in New Mexico.

  • Granting a right to use a franchise employed in New Mexico.

  • Performing services in New Mexico.

  • Selling research and development services executed outside NM, the product of which is originally used in New Mexico.

Gross receipts tax in the state of New Mexico is varied on nexus or location, such as counties and municipalities which is between 5.125% to 8.6875%.

Withholding Tax: It is a wage withholding tax which is deducted from the employee salary and pay to the government bodies such as Internal Revenue Service and New Mexico Taxation and Revenue.

Compensating Tax:It is like a use tax, which is protected to a New Mexico vendor from an unfair competition with an out of state vendor/seller. It is an excise tax, which is applied to a person using taxable products or services in the state of New Mexico, but originally bought or delivered from an out of state vendor.

The current compensating tax rate in New Mexico is 5.125% on using personal tangible property and 5% of taxable service used in the state of New Mexico.

The due date to pay compensating tax is every 25th day of the month following the reporting period. It should be paid on or before the due date to avoid penalty for failure to file on time.

Purchases are made by a New Mexico resident from the out of state vendor is subject to compensating tax or Use Tax in New Mexico. It is economically a healthy decision by the department of revenue to encourage New Mexico buyers to buy from the local sellers instead of by passing sales and use tax or stop unfair competition from out of state businesses.

Does' State of New Mexico has a Use Tax?

Term use "Compensating Tax in New Mexico" is same as Use Tax.

Who Must Get A Sales Tax Number For New Mexico?

Any vendor who engages in business in New Mexico must register with the Taxation and Revenue Department (TRD) whereas if one is engaged in selling tangible products or providing taxable services a CRS Identification Number in New Mexico is acquired.

How to apply for New Mexico Sales Tax Registration or CRS Identification Number?

There are two ways to get CRS Identification Number New Mexico, which are described below:

Apple CRS Identification Number Electronically:

CRS Identification number is applied electronically on the Taxation and Revenue Website by using  New Mexico Taxpayer Access Point (TAP) CRS Business Registration. State of New Mexico usually issues the number same day for a new business unless there is a flaw or deficiency in the application or the applicant is a defaulter of the revenue department.

Apply CRS Identification Number by mail:

Get an application ACD-31015 Application for business tax identification number from any local office in the state of New Mexico. Generally NM department of taxation and revenue process the manual applications in nearly two weeks.

Due date to file a gross receipt tax for the state of New Mexico?

It is due on the 25th of the following month unless authorized a different date by the department.

Obligation of the CRS Identification Number Holder

  • Obtain a CRS Identification Number from the Department of revenue, if selling taxable items or providing taxable services before starting a business.

  • Collect gross receipt tax according to the current tax rate chart listed on the Department of Revenue New Mexico Web Site.

  • File gross receipt tax on time with the amount, you have collected from your customers.

  • Collect Use tax on the out of state purchases by the New Mexico residents.

  • The information on the CRS certificate must be current.

  • The CRS Identification Number certificate must be posted on the business location permanently.

  • Manage proper records to share with the NM Department of Revenue, that the protocol has been followed to collect sales and use tax from the customers and have paid back on time to the New Mexico Department of Revenue.

  • CRS Identification Number License is not transferable to the new owner, in case of selling your existing business.

  • CRS License must be cancelled by the Department along with any payment due, if closing out business.

Fundamental characteristics of NAICS codes to register CRS Identification Number License:

NAICS code is asked to indicate while filling out an application for sales tax license New New Mexico. The NAICS code is established to describe the primary activity of the business and multiple NAIC code can be established under one application. It is asked for the statistical purpose. NAICS code obtains from the New Mexico Taxation and Revenue website.

How to handle internet/drop shipping sales in New Mexico?

Gross receipts tax and the compensating tax are collected based on the nexus of the seller and buyer. If a seller and buyer in a same state gross receipts apply otherwise compensating tax to the out of state consumers. Drop shippers provides reseller permit to vendor to resale to the end user or buyers.

For example: Amazon has warehouses in almost every state. A drop shippers provide reseller permit to the Amazon and ship item to an end user and collect gross receipts compensating tax from the buyer instead of Amazon.

Workers compensation requirement in New Mexico

Most states secure employees by escorting workers' compensation and the state of New Mexico is one of them and have a clear instruction to buy workers' compensation if having three or more full or part time employees. For the construction employees the limitation is one instead of three.



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