How to Start a General Contracting Business in New Mexico: GB-2 or GB-98 License With CID

If you plan to run a general contracting business in New Mexico, the license you need comes from the Construction Industries Division (CID) of the Regulation and Licensing Department. Most people searching for a new mexico general contractor license or a general contractor license nm want the same answers: which classification fits, what the exams cover, what it costs, and what order to do things in. This guide walks through the process using the figures New Mexico publishes.

Informational only. This article is general information, not legal or tax advice. Entity, tax, and licensing decisions depend on your situation. Confirm current fees and requirements with the agency named, and talk to a licensed attorney or CPA before you choose a business structure or sign contracts.

New Mexico does not issue a general business license. The state process has three parts: register the legal entity with the Secretary of State, get tax identification numbers from the Taxation and Revenue Department, and obtain any activity-specific license from the Regulation and Licensing Department. For contractors, the CID license is that activity-specific license. Cities and counties may also require their own registration and permits, and those are separate from the state license.

Choose Between the GB-2 and GB-98 Classifications

CID ties the classification to the work you can perform and the experience your qualifying party brings. The two classifications most general contractors compare are:

Classification	What it covers	Experience the qualifying party needs
GB-2	Residential work, up to four family units	Two years of foreman-level experience
GB-98	General building, residential and commercial	Four years of experience, including two years of commercial work

The GB-2 is the shorter path if your background is residential. If your goal is a commercial contractor license nm, the GB-98 is the classification that covers commercial general building, so you need the commercial portion of your experience documented from the start. Experience records matter for either classification, so keep them organized now rather than reconstructing them later.

What You Need Before You Start

• A dated work history showing foreman-level experience, and for the GB-98, two years of commercial work
• A chosen legal entity (LLC or corporation) and a business name that meets state naming rules
• A registered office in New Mexico and a registered agent who meets state requirements
• A federal Employer Identification Number (EIN) from the IRS and a New Mexico Business Tax Identification Number (BTIN)
• A qualifying party who will take the CID exams
• A $10,000 surety bond from a surety company
• Workers' compensation coverage, which applies to every CID licensee regardless of headcount
• Funds for the state filing fees and CID license fees listed in the cost table below
• Contact information for the city or county where you will work, so you can check its registration rules

Step-by-Step: Getting Your New Mexico General Contractor License

Step 1: Confirm Which Classification Your Record Supports

Write out your work history project by project, listing the dates, your role, the type of work, and whether it was residential or commercial. For the GB-2, you need two years at the foreman level. For the GB-98, you need four years total, including two years of commercial work. Support each entry with something a reviewer can check, such as a letter from a past employer or client, a signed contract, or a permit that lists you as the responsible party. If your commercial time is short, the GB-2 may be the realistic starting point. Ask CID how it handles any change of classification later.

Step 2: Form the Business Entity

Most small contractors form a limited liability company. The Articles of Organization cost $50, and an LLC files no annual or biennial report with the Secretary of State. An LLC taxed as a default pass-through does not owe the $50 corporate franchise tax. A corporation costs $100 to form through Articles of Incorporation, must file a Corporate Report every two years at $25, and owes a $50 annual franchise tax reported on form CIT-1. Corporations also pay the state corporate income tax, which is a flat 5.9% of taxable income for taxable years beginning on or after January 1, 2025. Whether a corporation or an LLC fits your situation is a tax and liability question for a CPA and attorney.

Your name must contain "limited liability company," "limited company," "LLC," "L.L.C.," "LC" or "L.C." It must be distinguishable from existing names on file with the state. If you will operate under a different name, that name must also appear in your articles of organization. New Mexico has no statewide DBA or assumed-name registration, so do not look for one. If you need to hold a name while you prepare your filing, a name reservation costs $20 and lasts 120 days, with no renewal.

File online through the SOS Enterprise Business Filing System at enterprise.sos.nm.gov. The Secretary of State does not publish a standard turnaround, and all business filings are reviewed before a certificate is issued. Expedited handling may be available under rule 12.3.1.9 NMAC: $150 for same business day service when the filing arrives before 2:00 p.m. (next business day if it arrives later), or $100 for two business day service. Expedited fees are paid separately and are nonrefundable. Confirm availability with the Secretary of State. General information is available at sos.nm.gov/business-services.

Every LLC must maintain a registered office in New Mexico, which can be the same as your principal place of business, and a registered agent. The registered agent must be a New Mexico resident individual, or a business entity with a New Mexico place of business at the registered office address. If you change the agent or office later, an LLC pays $20 and a corporation pays $25.

Step 3: Get Your Tax Identification Numbers

Register with the Taxation and Revenue Department at tax.newmexico.gov to obtain a Business Tax Identification Number. The BTIN is free. It is a tax registration, not a license, so having a BTIN does not authorize you to contract. Your business will also report gross receipts tax. New Mexico has no sales tax, but its gross receipts tax is imposed on the seller. The state rate is 4.875%, and combined state and local rates run from 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027. How construction receipts are taxed in your specific situation should be confirmed with the Taxation and Revenue Department or a CPA.

Step 4: Prepare Your Qualifying Party for the Exams

The qualifying party must pass the CID trade exam, which requires a score of 75% to pass, and the business and law exam. The trade exam tests technical knowledge of the classification you are applying for, and the business and law exam covers the rules that govern running a contracting business. Study both exams before you schedule them. Contact CID for current scheduling and retake information.

Step 5: Secure the $10,000 Surety Bond

New Mexico requires a $10,000 surety bond when you are licensed and again at each renewal under NMSA 60-13-49. The bond amount is set by statute, but the premium you pay the surety company is separate and varies. Surety underwriters typically review your credit and financial history, so ask about your premium before you commit to a timeline. Start this step early, because CID will not complete your license without the bond on file.

Step 6: Put Workers' Compensation in Place

Workers' compensation applies to every CID licensee under NMSA 52-1-6, regardless of how many people you employ. Lacking it is grounds for license revocation. Even if you plan to work alone at first, get the coverage in force before you apply, and keep proof of it on file. An insurance agent who writes contractor policies can confirm what your classification requires and what it will cost.

Step 7: Submit the CID Application and Pay the Fees

Under 14.5.5 NMAC, the application fee is $30, plus $100 a year or $200 for two years for each classification. For example, one classification for one year would be $130 in these fees. Because CID amounts can change, confirm the current figures with CID before you pay. Submit your experience documentation, exam results, bond, workers' compensation proof, and entity information together so the application is not held for missing items.

Step 8: Check City and County Registration

A state license does not cover local rules. Cities and some counties charge their own flat annual business registration, and they issue their own permits for construction work. Check the rules for every jurisdiction where you will bid or perform work, whether that is Albuquerque, Las Cruces, Santa Fe, Rio Rancho or somewhere else. Local fees are not included in the state figures in this guide, so you will need to ask each office directly.

Step 9: Calendar Your Renewals and Stay Compliant

Track your license renewal, your bond renewal, and your workers' compensation renewal in one place. A lapse in any of the three can stop your work. New Mexico law bars anyone from acting as a contractor, or from bidding on a contracting job, without a license under NMSA 60-13-12. Do not submit a bid while your application is still pending.

New Mexico Filing and License Costs at a Glance

Item	Amount	Agency
LLC Articles of Organization	$50	Secretary of State
LLC annual or biennial report	None required	Secretary of State
Expedited LLC filing, same business day	$150	Secretary of State (confirm availability)
Expedited LLC filing, two business days	$100	Secretary of State (confirm availability)
Corporation Articles of Incorporation	$100	Secretary of State
Corporate Report (biennial)	$25	Secretary of State
Corporate franchise tax	$50 a year	Taxation and Revenue Department (form CIT-1)
Name reservation (120 days, not renewable)	$20	Secretary of State
Change of registered agent or office, LLC	$20	Secretary of State
Business Tax Identification Number	No charge	Taxation and Revenue Department
CID application	$30	CID
CID license, per classification	$100 a year or $200 for two years	CID (confirm current amounts)
Surety bond	$10,000 bond amount; premium varies	Surety company
Workers' compensation	Premium varies	Insurer
City or county registration	Set locally	Each city or county

Tips and Common Mistakes to Avoid

• Treating the BTIN as a license. The BTIN is a free tax registration. Your contractor license comes from CID.
• Bidding before you are licensed. Acting as a contractor or bidding without a license is barred under NMSA 60-13-12, so hold off until your license is issued.
• Filing a DBA with the state. New Mexico has no statewide assumed-name registration. If you trade under another name, state it in your articles of organization.
• Expecting an LLC annual report. New Mexico LLCs file no annual or biennial report with the Secretary of State. Corporations are different and do file a biennial report.
• Dropping workers' compensation to save money. The requirement applies regardless of headcount, and lacking it can cost you the license.
• Loosely documenting experience. Attach proof to each entry so a reviewer can check it.
• Misreading the handyman exemption. Under 60-13-3, casual, minor work on one project at a time up to $7,200 a year may be exempt, with an annual declaration to CID. The exemption never covers electrical, plumbing or gas fitting. Confirm the current dollar limit with CID before you rely on it, because it is easy to misremember.
• Assuming the state covers local permits. City and county registration and permits are separate. Ask each office where you will work.
• Letting the bond or insurance lapse. The $10,000 bond is required at each renewal, so put those dates on a calendar.

What to Expect After You Apply

Contractors who complete these steps in order, with complete documentation and a qualifying party who is prepared for both exams, may be positioned to receive a license without repeated corrections. Timing depends on CID's review, the Secretary of State's review of your entity filing, exam scheduling, and how quickly your bond and insurance are placed. Because the Secretary of State does not publish a standard turnaround, plan for the entity filing to take an unpredictable amount of time, and ask the Secretary of State whether expedited service is available if your schedule requires it. Treat the license as the start of a compliance routine rather than a finish line, since bond, insurance, and renewal obligations continue for as long as you operate.

Get Help Where It Makes Sense

An attorney can advise you on whether an LLC or a corporation fits your liability and ownership plans. A CPA can advise on gross receipts tax, the corporate income tax, and the franchise tax if they apply to you. An insurance agent who writes contractor policies can confirm what workers' compensation and liability coverage you need. The New Mexico Small Business Development Center offers advising at nmsbdc.org, and the SBA's New Mexico district office information is at sba.gov/district/new-mexico.

Reminder: This article is informational content, not legal or tax advice. Fees, thresholds, and rules change. Confirm every figure with the Secretary of State, the Taxation and Revenue Department, CID, and your local city or county before you file, and consult a qualified attorney or CPA for your specific situation.