top of page

Independent contractors are businesses

The first thing to know about being an independent contractor (consultants, freelancers, consultants, gig workers, sole proprietors and other self-employed people) is that, under both federal and New Mexico tax law you are considered to be in business. That means that in addition to federal and state income taxes, you owe New Mexico gross receipts tax on your sales and the IRS self-employment tax on the profit from your business.

All businesses doing business in New Mexico are required to register with the N.M. Taxation & Revenue Department and report their gross receipts (aka sales) in order to determine the amount of gross receipts tax or which they are liable.

 

Once the registration process is complete the business will receive their Business Tax Identification Number (BTIN). This number is used to report gross receipts and NM income tax withheld from employees' wages. 

Important: Your New Mexico BTIN is a separate identification number from your IRS Employer Identification Number (EIN) and, if you have employee the Employer Account Number (EAN) issued by the New Mexico Department of Workforce Solutions for reporting and paying state unemployment tax. When contacting a tax authority, be sure to use the ID number that particular agency has assigned to your business. Note: ID numbers issued by the Taxation & Revenue Dept. before July 1, 2021 were called CRS ID numbers.

 

Also note: Out-of-state businesses are also required to file income tax returns to report the share of their profit from doing business in New Mexico.

Also read

 

bottom of page