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Editorial 6 MIN READ

New Mexico in 2025: the state that does not ask its LLCs for an annual report

A $50 formation, no recurring LLC filing, a biennial corporate report, and a gross receipts tax that quietly eats services

The Editors
Staff, Incorporator.org
6 min read Updated
Contents 6 sections
  1. The mechanics, and why the zero matters
  2. What the corporation side looks like
  3. The corporate income tax
  4. The gross receipts tax, which is the actual trap
  5. Who this state actually makes sense for
  6. Sources

New Mexico LLC costs $50 to form and $0 a year to keep on the rolls. That second number is the interesting one. Four states do not require any recurring filing from their LLCs, and New Mexico is the one most founders never hear about.

This is a guide for someone forming or maintaining in 2025, with the actual statute, the actual fees, and the one tax most out-of-state founders do not understand until their first invoice.

The mechanics, and why the zero matters

You file Articles of Organization with the New Mexico Secretary of State for a one-time fee of $50. The filing is online, the turnaround is usually same week, and the authority for the form itself is the New Mexico Limited Liability Company Act at NMSA 1978, Chapter 53, Article 19. The statute reads like the model LLC acts of the late 1990s: name and registered agent in state, a short list of required disclosures, a signature.

What the statute does not require is a yearly report from an LLC. Most states pair formation with a recurring filing obligation: California wants $800 a year in franchise tax plus a Statement of Information every two years, Delaware wants $300 a year in LLC tax, Texas wants a Public Information Report with the Comptroller. New Mexico wants neither a report nor a tax from the LLC as an entity. Once the Articles are accepted, the state's ongoing demand on the LLC is zero dollars unless something changes (a new registered agent, a name amendment, a dissolution).

Only four states operate this way for LLCs in 2025. New Mexico is one of them, alongside Arizona, Ohio, and Missouri. It is a quiet structural choice that compounds over a decade: fifteen years of Delaware at $300 a year is $4,500 of recurring tax; fifteen years of New Mexico is the original $50.

What the corporation side looks like

The zero applies to LLCs. Corporations are a different regime.

A New Mexico corporation files a Biennial Corporate Report with the Secretary of State, due the fifteenth day of the fifth month after the close of the corporation's fiscal year, every other year. For a calendar-year corporation that is May 15. The report comes with a fee that depends on authorized share count: $25 at the low end for small authorized-share counts, scaling up to $100 for larger ones. Below that, a domestic nonprofit pays $10. For a standard small C-corp with a thousand authorized shares, the practical number is $25 every two years.

New Mexico does not have a separate franchise tax on corporations. The biennial report fee is the recurring state charge. A corporation operating in the state pays income tax to the Taxation and Revenue Department and sales-tax analog (the gross receipts tax, discussed below) on its receipts, but nothing analogous to the Delaware authorized-shares franchise-tax calculation that lands on founders every March.

The contrast is sharp. A Delaware C-corp with 10 million authorized shares pays $400 minimum franchise tax plus $50 annual report every year, and first notice often reads in the six figures before an assumed-par-value recalculation. A New Mexico C-corp with the same share count pays $100 every two years and receives no surprise notice.

The corporate income tax

New Mexico taxes corporate net income under NMSA § 7-2A-5, graduated. The rate schedule in effect for the 2025 tax year sits at 4.8% on the first $500,000 of net income and 5.9% on the portion above that. Those two brackets are the current structure; the rate was simplified by House Bill 6 in 2013, which collapsed what had been a three-bracket schedule topping out at 7.6% into the present two-step. Rate changes since then have been at the margin.

For a profitable small corporation, the effective rate is close to flat at 4.8% because the first bracket catches almost everything. Neighboring Arizona charges 4.9% flat; Colorado charges 4.55% flat; Texas has no corporate income tax but imposes a franchise tax on margin. New Mexico sits in the middle of its regional peer group on the income-tax side.

Pass-through LLCs (the default) do not touch the corporate income tax. Members pay New Mexico personal income tax on their distributive shares, at rates ranging from 1.7% to 5.9% for 2025.

The gross receipts tax, which is the actual trap

The number most out-of-state founders miss is not a filing fee. It is the gross receipts tax.

New Mexico does not run a conventional sales tax. It runs a gross receipts tax on sellers, imposed on the receipts from selling property, performing services, leasing, licensing, and granting franchises in the state. The state rate for 2025 is 4.875%. Local jurisdictions add their own increment, and the combined rate in populated areas runs between roughly 5.5% and 9% depending on county and municipality.

The part that bites: GRT applies to services. A consulting firm billing a New Mexico client must include the GRT in the invoice (or absorb it out of the billed price), file periodic GRT returns with the Taxation and Revenue Department, and remit. The same consulting firm billing a Texas client pays no Texas sales tax on the service because Texas does not tax most professional services. For a service-based business domiciled in New Mexico or with New Mexico receipts, the GRT is the dominant recurring tax concern, well ahead of the $0 annual-report story.

There are exemptions and deductions, especially for receipts from sales to out-of-state buyers where the benefit of the service is received outside New Mexico. Those deductions are real, but they require documentation and a defensible nexus position. Any New Mexico formation plan that ignores GRT has not finished its math.

Who this state actually makes sense for

Three categories of filer come out ahead in New Mexico in 2025.

The first is the holding LLC with no operating receipts. A pure asset-holding vehicle (real estate, IP, investment interests, a blocker between a founder and a portfolio) sidesteps the GRT because it has no taxable receipts, and pays nothing recurring to the state because the LLC has no annual report. This is the cleanest fit. Over a decade it saves low four figures compared with Delaware and mid-four figures compared with California.

The second is a privacy-conscious filer who does not need Chancery. New Mexico does not require member or manager names on the Articles of Organization. The registered agent is on the record; the beneficial ownership is not. Wyoming offers a similar pitch with a mandatory annual report at $60; New Mexico offers the same privacy with no annual report at all. The federal Corporate Transparency Act beneficial ownership reporting obligations are a separate matter and apply regardless of state of formation.

The third is a sole proprietor in New Mexico who wants the liability shield of an LLC without adding recurring state cost on top of the GRT they already pay on the business's receipts. For a resident operator, the state's LLC framework is genuinely inexpensive; the only recurring state touchpoint is the GRT return they would file anyway.

The categories that should think twice: a service business based outside New Mexico that forms here for the $0 annual-report line. If the business does not operate in the state, it will need to foreign qualify wherever it actually does operate, which undoes most of the savings. If the business does have New Mexico receipts, the GRT on services is the real recurring number, and it dwarfs the saved annual report fee.

The comparison most founders want to see runs like this. Delaware: $90 formation plus $300 a year in LLC tax, or $4,590 over fifteen years. New Mexico: $50 formation plus $0 a year, or $50 over the same fifteen years. The Delaware premium is $4,540. If the Chancery option is load-bearing or if investors will require Delaware at a later round, that premium is worth paying. If neither is true, the math favors New Mexico by an order of magnitude.

For a holding company with no operating receipts and no financing trajectory, file New Mexico this week, pay the $50, and redirect the saved $300 a year to something that compounds.

Sources

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