If you’re planning to establish or operate a business in Hobbs, New Mexico, understanding the local and state regulations for registration and taxation is crucial for your success. This guide outlines the essential requirements to ensure your business operates legally and efficiently within Hobbs and the state of New Mexico.
New Mexico State Gross Receipts Tax Identification Number (CRS)
Every individual or entity engaging in business activities within New Mexico must register with the New Mexico Taxation and Revenue Department. This registration is necessary to obtain a Combined Reporting System (CRS) identification number. Think of the CRS number as your primary state tax ID, often referred to as the gross receipts tax identification number. It’s the key to managing your state business taxes, including the gross receipts tax, local option gross receipts taxes, compensating tax, and withholding tax.
The good news is that obtaining a CRS identification number is free of charge. You have two convenient options for application:
- In-Person or Mail Application: Visit the local tax office in Roswell to submit your application in person, or mail or fax it in. Processing typically takes about one week to receive your CRS identification number.
- Online Application: For a faster and more streamlined process, apply online through the New Mexico Taxation and Revenue Department’s Taxpayer Access Point (TAP) portal: https://tap.state.nm.us/tap. Upon successful online registration, your CRS identification number will be generated automatically.
Alt text: New Mexico State Seal displayed on the Taxpayer Access Point (TAP) portal webpage for online business registration.
Hobbs Gross Receipts Tax Rate
For businesses operating from a physical location within Hobbs city limits, the gross receipts tax rate is currently 6.8125%. It’s important to note that even if your business provides goods or services outside of Hobbs city or Lea County, if your business is based in Hobbs, you are still obligated to charge and remit this sales tax to the State of New Mexico.
City of Hobbs Business Registration for Physical Locations
If your business has a physical address within Hobbs city limits, operates for profit, and requires a New Mexico taxpayer identification number (CRS number), you must also obtain a City of Hobbs Business Registration. This is an annual registration, and the cost is $25 per calendar year, as outlined in Chapter 5.04 of the Hobbs Municipal Code.
Alt text: Front view of Hobbs City Hall building, the center of local government and business registration in Hobbs, New Mexico.
Mobile Business Registration in Hobbs
For businesses that already hold a valid City of Hobbs Business Registration and engage in mobile business activities outside their usual place of business within Hobbs, an additional Mobile Business Registration is required. This annual registration costs $100 per calendar year, as detailed in Chapter 5.04.031 of the Hobbs Municipal Code. This applies to businesses that travel to different locations within Hobbs for their operations.
Secondhand Dealer’s License for Used Merchandise in Hobbs
Businesses operating a secondhand store or junk shop within Hobbs, dealing with buying and reselling used merchandise, need both a New Mexico gross receipts tax number and a City of Hobbs Secondhand Dealer’s License. The annual fee for this license is $50 per year, as per Chapter 5.32 of the Hobbs Municipal Code.
Solicitor’s Permit for Door-to-Door Sales in Hobbs
If your business involves door-to-door sales of goods, wares, merchandise, or services in Hobbs, visiting residential (single-family or multi-family) and business locations, a Solicitor’s Permit is mandatory. The annual fee for this permit is $25.00. Furthermore, obtaining a Solicitor’s Permit involves fingerprinting, a background check, and approval from the Hobbs Police Chief. Approved solicitors are required to prominently display their valid Solicitor’s Permit, issued by the Hobbs City Clerk’s Office, which includes a photograph of the solicitor. This is regulated by Chapter 5.36.010 of the Hobbs Municipal Code, ensuring community safety and regulated sales practices.
Penalties for Non-Compliance in Hobbs, NM
It is critical to comply with all business registration and licensing requirements in Hobbs, New Mexico. Failure to do so can result in penalties. According to the Hobbs Municipal Code, any violation of the chapters mentioned above is considered a misdemeanor. Conviction can lead to a fine of up to $500.00, imprisonment for up to 90 days, or both. Each day a violation continues is considered a separate offense, compounding the penalties.
Starting and running a business in Hobbs, New Mexico, offers opportunities and growth. By understanding and fulfilling these registration and tax obligations, you lay a solid foundation for your business’s legal compliance and long-term success in the Hobbs community.
