New Mexico Short-Term Rental Laws: State Taxes, City Permits and Where Caps Exist
New Mexico Short-Term Rental Laws: State Taxes, City Permits and Where Caps Exist
If you rent a house, casita or spare room to visitors for a few nights at a time, you need answers to three questions before your first booking. What does your city or county require? What does the state require for tax? Is your address in an area that limits short-term rentals? New Mexico answers the first question locally, the second at the state level, and the third mostly through city and county zoning. This guide covers the New Mexico short-term rental laws that matter most to hosts, with current figures and the points you need to confirm with the agency that sets them.
Informational content only. This article is not legal or tax advice. Local ordinances change, and enforcement can differ from the written rule. Confirm current requirements with the city or county where the property sits, and talk with a New Mexico attorney or CPA before you choose an ownership structure or tax position.
New Mexico has no statewide short-term rental permit
New Mexico does not issue a statewide short-term rental permit or a general business license. The state's business navigator lists three steps that apply to most businesses: register the legal entity with the Secretary of State, obtain tax ID numbers through the Taxation and Revenue Department at no charge, and obtain any activity-specific license through the Regulation and Licensing Department. Whether a licensing step applies to a rental is a question to confirm with that department.
Cities and counties may require their own local business registration, and they set the rules that matter most to hosts. Permits, registration fees, occupancy caps, spacing rules, insurance minimums and neighbor notice all come from local ordinances. The practical starting point is the city or county where your property sits.
State tax registration: the BTIN and gross receipts tax
Any host who earns rental income in New Mexico should register with the Taxation and Revenue Department (TRD) and obtain a Business Tax Identification Number, or BTIN. The BTIN replaced the number formerly called the CRS identification number. It is a tax registration, not a license, and the TRD issues it at no charge. Start with the TRD page on who must register a business: https://www.tax.newmexico.gov/businesses/who-must-register-a-business/
New Mexico has no sales tax. It has a gross receipts tax (GRT) imposed on the seller's gross receipts, so the host reports and pays it. Lodging income is subject to gross receipts tax. The state rate is 4.875%. Local governments add their own rates, and the combined state and local rate runs from 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027. Because the rate depends on where the property is, look up the combined rate for your address on the TRD site rather than relying on the statewide figure.
| Item | What to know |
|---|---|
| State gross receipts tax rate | 4.875% |
| Combined state and local GRT | 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027; varies by location |
| BTIN | Free registration with the TRD |
| Owner personal income tax | Graduated, 1.5% to 5.9% for tax years beginning on or after January 1, 2025 |
Rental profit from property held in your own name, or through an LLC taxed as a default pass-through, is generally reported on your personal return. An LLC that elects corporate tax treatment pays a flat 5.9% corporate income tax on taxable income for taxable years beginning on or after January 1, 2025, and files form CIT-1 for the $50 annual corporate franchise tax.
Lodgers' tax: the local occupancy tax
The Lodgers' Tax Act (NMSA 3-38-13 to 3-38-25) allows a city or county to impose an occupancy tax on lodging that is not the guest's household or primary residence. That language reaches most short-term rentals. The Act caps the local rate: under Section 3-38-15, in its 2023 text, the cap is 5% of gross taxable rent. Confirm the current statute text before relying on that figure.
The city or county sets the actual rate, decides which lodgings it covers, and sets how the tax is collected and remitted. Neighboring municipalities can have different rates, and a county can treat unincorporated areas differently from the city next door. Call the city or county finance or treasury office to ask whether lodgers' tax applies to your property, what the rate is, and how to register. Do not assume the rate from a nearby town.
City and county rules: four examples
Requirements differ sharply across New Mexico. The four cities below show the range. The figures come from city pages and FAQs as of October 2026. Check the current version before you apply.
Albuquerque
- Short-term rental permit: $120 for the first year and $90 for each renewal, per the city FAQ (2026).
- An active City of Albuquerque business license.
- Liability insurance of $250,000.
Santa Fe
Santa Fe offers two tracks: a Residential STR Permit or a Non-Residential Registration. Confirm which one fits your property before you apply. The city applies a 50-foot spacing rule between short-term rentals, so ask how the city measures it. Residential permits are subject to a cap. Check with the city for the current number of permits and the status of the application window. New applications opened April 15, 2026, so confirm whether the window is still open.
Las Cruces
Las Cruces adopted a short-term rental ordinance effective January 1, 2026, with enforcement beginning July 1, 2026. Hosts pay a city registration of $35 a year. They also register with Visit Las Cruces: $50 one time, then $35 for each renewal. The ordinance requires $500,000 in liability coverage and a 500-foot neighbor notice.
Taos
Taos caps short-term rental permits at 120 under Ordinance 22-12. Short-term rentals are barred in the historic district and in the central business district (CBD). Outside those areas, the cap still means a permit is not guaranteed. Ask the town whether permits remain under the cap before you buy a property for this use.
Everywhere else
For any other New Mexico city or county, including the state's other larger municipalities, contact the planning and zoning office and the business licensing office directly. Do not rely on a listing platform's summary or a forum post for local rules. Those sources go stale.
Where caps exist, and where they do not
New Mexico has no statewide cap on short-term rentals. Caps exist only where a local government sets them. Taos has the clearest cap in this guide, a 120-permit ceiling plus bans in its historic and central business districts. Santa Fe caps its residential permits, and that number can change, so check it with the city before you assume a permit is available. For Albuquerque and Las Cruces, the rules rely on permits, registration, insurance and notice requirements. Confirm with the city directly whether either one applies a numeric cap.
Zoning comes before everything else
A permit only tells you the city will let you operate if the property is in a zone that allows it. Zoning decides whether a residential property can host short-term guests at all, and the answer can change from one block to the next. Check the zoning designation for the parcel with the city or county planning office before you sign a purchase agreement or a lease. Buying a property on the assumption that it can be listed is a common and costly mistake.
Holding the property in an LLC
Many hosts hold rental property in an LLC to separate liability from their personal assets. The filing cost is modest. Articles of Organization cost $50 with the New Mexico Secretary of State, and you file online through SOS Enterprise at https://enterprise.sos.nm.gov/. An LLC files no annual or biennial report, and an LLC taxed as a default pass-through owes no franchise tax. A corporation is different: it files a biennial report at $25 and owes the $50 annual franchise tax.
New Mexico has no statewide DBA or assumed-name registration. If the LLC will list under a brand name, state that name in the articles of organization. The LLC name must contain the words limited liability company, the words limited company, or an abbreviation such as LLC, L.L.C., L.C. or LC. Every LLC must maintain a registered office in New Mexico, which can be the same as its principal place of business, and a registered agent for service of process. Changing the registered office or agent costs $20 for an LLC.
Pre-listing checklist
- Confirm that the zoning designation for the parcel allows short-term rentals.
- Ask the city or county for its permit, registration and spacing rules, and whether a cap applies.
- Register with the TRD and obtain your free BTIN.
- Look up the combined gross receipts tax rate for the address.
- Ask the city or county finance office whether lodgers' tax applies and how to register.
- Buy liability insurance that meets the local minimum. Albuquerque requires $250,000 and Las Cruces requires $500,000.
- If you use an LLC, file the $50 Articles of Organization and state any trade name in them.
- Keep a record of every booking and the tax collected on it.
Official resources
- New Mexico Taxation and Revenue Department: https://www.tax.newmexico.gov/
- Who must register a business (TRD): https://www.tax.newmexico.gov/businesses/who-must-register-a-business/
- New Mexico Secretary of State business services: https://www.sos.nm.gov/business-services/
- SOS Enterprise business filing system: https://enterprise.sos.nm.gov/
- New Mexico Small Business Development Center: https://www.nmsbdc.org/
- SBA New Mexico district page: https://www.sba.gov/district/new-mexico
A CPA can help you work out how rental income, gross receipts tax and lodgers' tax interact in your situation, and a local land-use attorney can read a zoning code faster than most owners can. This guide is informational. It is not legal or tax advice.