What Happened to My CRS Number?
Every New Mexico business is required to have a seller’s permit (which used to be called a CRS Number). This is still true of partnerships, LLCs, corporations, nonprofits, and many sole proprietorships. However, as of 2021, these numbers have now been replaced by New Mexico Business Tax Identification Numbers (NMBTIN). This is part of New Mexico’s attempt to streamline their online business registration process. A NMBTIN is a unique taxpayer ID issued by the New Mexico Department of Taxation and Revenue. It is used to report withholdings, gross receipt taxes, and any compensation you may receive.
This is different from your Federal Employer Identification Number, which is also required for most business types. (Many sole proprietors do not necessarily need a FEIN, unless they meet certain criteria. We can discuss this with you, and help you decide if you need a FEIN.)
How Do I Apply for a BTIN?
You can apply for a seller’s permit on the NMDTR’s website, through the Taxpayer Access Point. You will then be given one or more BTINs. (The state will assign individual BTIN numbers for different types of tax reporting, if they apply to your business.)
Applying for your first BTIN is a fairly simple process. It becomes more complicated if you want to make any changes to your business. For example, if you decide to convert your sole proprietorship into an LLC, you should first dissolve your old company (which likely used your Social Security number as your seller’s permit number). Then you will form a new LLC, and be assigned a new BTIN.
If you decide to remain a sole proprietorship, you should still register in the new system. You will need a BTIN to file Gross Receipts Taxes, and putting this off might cause problems during tax season. Remember that a BTIN is issued by the state of New Mexico, and does not eliminate your need for a federal EIN. (Anyone who employs people still needs a FEIN.)
Law 4 Small Business (L4SB). A little law now can save a lot later. A Slingshot company.
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2 Comments
so if I don’t have any employees and I plan to do all the work do myself do I still need a FEIN ?
Hi, John.
The IRS has a helpful guide at https://www.irs.gov/businesses/small-businesses-self-employed/do-you-need-an-ein, which says the following:
You will need an EIN if you answer "Yes" to any of the following questions. For your convenience, clicking on the "Yes" option will take you directly to How to apply for an EIN.Daily limitation of an Employer Identification Number
To ensure fair and equitable treatment for all taxpayers, Employer Identification Number (EIN) issuance is limited to one per responsible party per day. This limitation is applicable to all requests for EINs whether online or by fax or mail. We apologize for any inconvenience this may cause.
Do you have employees?
YES NO
Do you operate your business as a corporation or a partnership?
YES NO
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
YES NO
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
YES NO
Do you have a Keogh plan?
YES NO
Are you involved with any of the following types of organizations?
YES NO
I think the IRS missing something, however, given they are just focused on tax issues. That is, “Will the company want a checking account and/or merchant account? Will it be getting paid and/or collecting money?” If so, then it’s best for the company to have its own bank and merchant accounts, which requires its own FEIN — instead of using your own SSN for these accounts. Why? To prevent a plaintiff from arguing that you’re “commingling funds” with the company, therefore permitting a “piercing the corporate veil” argument, to destroy the liability protection a LLC or Corporation provides.
Larry.