Setting up a startup in New Mexico

From 2025, a flat 5.9%. HB 252 removed the 4.8% rate that used to apply to the first $500,000 of taxable income, so a small company no longer gets a lower bracket. Every corporation also pays the $50 franchise tax on the same CIT-1 return.

Not quite. Gross receipts tax is imposed on the seller for the privilege of doing business, and it covers services and licenses, not just goods. Sellers almost always pass it on, but the liability stays with them if they don’t.

Often, yes. New Mexico’s gross receipts tax applies to services, so an in-state consultant or a remote vendor over the $100,000 threshold may add GRT to the invoice. It is a legitimate pass-through of the vendor’s tax, not a sales tax the vendor is collecting for the state.

No. Paid family and medical leave bills have been introduced repeatedly — in 2025 HB 11 passed the House and then failed in the Senate Finance Committee — and none has become law, so there is no state program or payroll contribution. The Healthy Workplaces Act does require paid sick leave from every private employer, accruing at one hour per 30 worked, up to 64 hours a year.

Every other year. New Mexico corporations file a biennial report with the Secretary of State by the 15th day of the fourth month after their fiscal year end, plus an initial report within 30 days of receiving their certificate of authority.

Partly. The Technology Jobs and Research and Development Tax Credit has a basic credit you can take against gross receipts, compensating or withholding tax — which a pre-revenue company with payroll actually owes — and an additional credit against income tax. A qualified small business with 50 or fewer employees and no more than $5 million of qualified expenditures can have excess additional credit refunded, in full below $3 million of expenditures.