How to Transfer or Move a LLC from New Mexico to Texas

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How to transfer a company to Texas: keep the EIN with no downtime [step-by-step]

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How to transfer your LLC to Texas with no downtime [step-by-step]

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Redomestication, also known as redomesticating, refers to the lesser-known legal process of transferring or moving the "home state" of an existing corporation, partnership, or LLC to a new state. It means keeping your existing company name, credit, and federal employer identification number (FEIN) without wasting time and money creating a new business entity, applying for foreign registration, or moving assets between companies.
— Prof. Chad D. Cummings, CPA, Esq., M.S.T., LL.M., CMA, CFE, CIA, CRMA, CISA, CITP, FCPA, PFS, CFP

Texas destination-state requirements

A redomestication into Texas is governed by Chapter 10, Subchapters C and D, of the Texas Business Organizations Code together with the law of New Mexico. The transaction requires a written Plan of Conversion, the approvals required by the governing documents and applicable law, a Certificate of Conversion, and, for a Texas filing entity, a Certificate of Formation. The Texas filing must be coordinated with the New Mexico outbound instrument so the same LLC continues without interruption.

Tax considerations when moving a LLC from New Mexico to Texas

New Mexico imposes individual income tax at rates reaching 5.9 percent. Its corporate income tax became a flat 5.9 percent for taxable years beginning January 1, 2025, replacing the former 4.8 percent bracket on the first $500,000. This enacted change in 2024 House Bill 252 matters when comparing a smaller corporation's current liability with older estimates. Corporations can also owe the separate $50 annual franchise tax under the applicable registration and activity rules.

Income of partnerships and S corporations generally passes through to their owners, but qualifying businesses can elect New Mexico's entity-level tax. The election is made annually on the applicable return and generally taxes eligible income at 5.9 percent, with owner credits. Nonresident withholding can still apply to income outside the election. The Taxation and Revenue Department explains the election and exclusions. LLC status alone therefore does not establish exemption from entity-level payments.

New Mexico's gross receipts tax, or GRT, has a statewide component of 4.875 percent plus applicable local increments. The tax generally falls on the business's receipts and covers many services as well as goods. Deductions and exemptions can prevent tax on particular transactions, including some business purchases supported by appropriate documentation. The potential for tax to accumulate through a supply chain should be modeled from actual transactions, rather than assuming every production stage is taxable. Beginning July 1, 2025, ordinary GRT rate changes occur in July; a limited January exception applies to certain disaster-related local changes. For illustration, $100,000 of receipts subject to the full 4.875 percent state component produces $4,875 of state GRT before local increments. Available deductions can materially change that calculation for a particular business.

New Mexico has no current separate estate or inheritance tax. For owners of a LLC redomesticating from New Mexico to Texas, the central question is whether New Mexico-source income and taxable receipts remain after the move. New Mexico customer receipts may sustain GRT obligations even after offices relocate. Use the applicable location code and sourcing rule, reconcile existing deductions, and retain required tax accounts until the business actually qualifies to close them.

Texas imposes no individual income tax and prohibits a tax on individuals' net income under Texas Constitution article VIII, section 24-a. Texas also has no conventional corporate net income tax. Its franchise tax, however, applies to many corporations, LLCs, and other taxable entities, including businesses treated as pass-through entities for federal income-tax purposes. A federal S corporation election or partnership classification does not, by itself, exempt the business from Texas franchise-tax law.

For 2026 and 2027 report years, the franchise-tax no-tax-due threshold is $2.65 million in annualized total revenue. The general rates are 0.375 percent for qualifying retail or wholesale businesses and 0.75 percent for other businesses, applied to the taxable margin apportioned to Texas. Eligible businesses with no more than $20 million in annualized revenue can use the EZ computation at 0.331 percent, subject to its separate rules. The Texas Comptroller's franchise-tax guidance provides the current thresholds and methods. The threshold is not a deduction from taxable margin and does not establish that all income above it is taxed at the general rate. The compensation deduction limit is $480,000 per person for these report years. Compare the available margin methods using the business's actual revenue, eligible costs, compensation, and Texas apportionment before choosing a computation method.

Businesses at or below the revenue threshold generally no longer file a No Tax Due Report for report years 2024 and later, but an applicable Public Information Report or Ownership Information Report remains required. The ordinary annual deadline is May 15. Texas's state sales tax is 6.25 percent, with local taxes bringing the combined rate as high as 8.25 percent. Sales-tax, unemployment, property-tax, and licensing obligations may continue even when no franchise tax is payable. Texas has no current separate estate or inheritance tax.

Redomesticating a LLC from New Mexico to Texas changes its governing jurisdiction. Actual tax savings depend on the owners' residence, the company's classification, and the location of its operations and receipts. Continuing employees, property, inventory, or qualifying sales in New Mexico can preserve that state's filing and payment obligations. Do not close an account merely because the Texas conversion documents have been accepted.

South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), permits sales-tax nexus without the former physical-presence prerequisite. 15 U.S.C. § 381 instead provides limited net-income-tax protection for specified solicitation of tangible-goods orders. Wisconsin Department of Revenue v. William Wrigley, Jr., Co., 505 U.S. 214 (1992), interprets that protection. These authorities address different taxes and activities. Review nexus separately for each state, including remote sales and post-move operations, before projecting that redomestication will eliminate a former state's tax burden.

Specific legal requirements to transfer a LLC to Texas from New Mexico

New Mexico has state-specific statutory, approval, filing, fee, and sequencing requirements that must be coordinated with Texas law. The requirements below are the origin-state requirements applicable to this transaction.

1. A New Mexico LLC or business corporation can move its business into a Texas entity through an authorized interstate merger. New Mexico does not provide a general same-type outbound domestication procedure comparable to states that accept a single continuation filing. For LLCs, NMSA 1978, § 53-19-62 expressly permits merger with domestic or foreign entities. For corporations, § 53-14-7 governs combinations involving domestic and foreign corporations. The destination law must also permit the proposed transaction. This route ordinarily involves establishing the destination survivor and merging the New Mexico entity into it. Merely registering the New Mexico business in Texas leaves its original legal domicile unchanged.
2. Distinguish same-type relocation from New Mexico's limited conversion statutes. Sections 53-19-60 and 53-19-60.1 address conversions involving specified different entity types. They do not supply a general LLC-to-foreign-LLC redomestication filing. Consequently, saying that New Mexico has no conversion provisions at all is inaccurate, while relying on those provisions for every interstate move is equally misleading. For the proposed LLC, identify its current legal form and the form intended in Texas before selecting a route. A corporation becoming an LLC can raise different approval and federal tax issues from a corporation merging into a foreign corporation. The plan should identify the actual transaction rather than treating all reorganizations as interchangeable.
3. An LLC merger requires a written plan with defined ownership treatment. Under § 53-19-62, the Plan of Merger identifies each party and the survivor, its entity type, the transaction terms, and the basis for converting ownership interests. It also identifies the survivor's principal business address. Describe which destination interests the existing owners receive and how any interests initially issued when forming the destination survivor are canceled or adjusted. Reconcile the final ownership ledger with the proposed operating agreement. If the plan permits amendment or abandonment before effectiveness, state the authorized procedure and closing conditions. Each constituent entity must approve the merger under the law governing that entity, including the newly established destination company.
4. New Mexico LLC approval is not automatically a simple majority vote. Section 53-19-62(C) uses the operating agreement's specified merger vote, but that vote cannot be less than a majority of all member voting power. If the agreement supplies no merger-approval provision, all members must approve. A manager's ordinary authority to sign contracts does not replace that owner approval. Review the current agreement and membership records, then retain the signed consent or meeting record with the plan. The destination entity must meet its own approval requirements as well. If owners will receive different interests or additional consideration, explain those terms before the vote and determine whether other contractual rights require separate consent.
5. LLC Articles of Merger must be signed for every constituent entity. § 53-19-62.1 requires names and jurisdictions, applicable formation dates, confirmation that the plan was approved and signed, and information about the survivor and effective date. Foreign-entity information and service-of-process provisions must be supplied where required. The survivor must provide owners a copy of the plan on request without charge. If a foreign LLC survives and will transact business in New Mexico, it must obtain authority to do so. Use the New Mexico Business Portal and current business-filing instructions. Confirm the required entity-filing category and attachments before submitting the merger through the portal.
6. Corporations follow the Business Corporation Act's merger procedure. Sections 53-14-1 and 53-14-3 generally require a board-approved plan and shareholder approval. The meeting notice must be delivered at least 20 days beforehand to shareholders entitled to receive it, including nonvoting holders, and include the plan or a summary. The statutory vote generally is a majority of shares entitled to vote, with separate class voting where required. Section 53-14-4 requires Articles of Merger containing the plan and the relevant approval information. For a foreign survivor, § 53-14-7 adds agreements addressing New Mexico service of process and payment of dissenting shareholders. These corporate requirements should not be replaced with the LLC form or approval recital.
7. The filing budget depends on the entity and merger structure. Section 53-19-63 sets a $100 LLC merger filing fee, also reflected in the Secretary of State's LLC merger instructions. Corporate charges are governed by the applicable corporate fee schedule and should be confirmed for an outgoing merger. Destination formation and merger filings are additional, as are any certifications or optional expedited services. Itemize the actual required records before estimating the transaction cost, and distinguish the state's charges from legal fees for preparing the plan and coordinating the closing.
8. Check status and effectiveness before announcing completion. Resolve any administrative revocation or missing required report that could affect filing or the destination's acceptance of status evidence. An LLC's certificate of good standing and a corporation's compliance documents should be ordered when the destination or another transaction participant requires them. Section 53-19-62 permits an LLC merger to become effective upon filing or at a later stated date. Corporate timing requires review of §§ 53-14-6 and 53-14-7 together with destination law. Coordinate the two states' filings and obtain accepted evidence before treating the survivor as having succeeded to the business. A document submitted to the portal may still require examination or correction.
9. A merger supplies succession, while the nonsurviving entity's separate existence ends. § 53-19-62.2 vests the constituent LLCs' property in the survivor and carries forward their liabilities and proceedings. It also provides that the Articles of Merger serve as the nonsurviving LLC's Articles of Dissolution, without ordinary winding up unless otherwise agreed. Corporate effects appear in §§ 53-14-6 and 53-14-7. This should be described accurately as succession through merger. Preserve records connecting the original business to the destination survivor. Do not promise that the same federal EIN always survives: the federal result depends on the structure and tax classification, especially where corporations, disregarded LLCs, or ownership changes are involved.
10. Contracts and licenses need their own transaction review. Because the New Mexico entity merges into a survivor, examine restrictions addressing merger or assignment by operation of law, as well as express change-of-domicile provisions. Obtain required lender and landlord consents before filing. A professional or regulated business should verify that the destination survivor is eligible to hold the necessary licenses and whether the New Mexico regulator requires an amendment or new approval. Review insurance continuity and bank account authority. For real estate or secured obligations, determine what accepted merger evidence must be recorded or delivered. Statutory succession preserves obligations; it does not release guarantees or excuse performance of an existing contract.
11. Determine whether the destination survivor will continue business in New Mexico. If it will, arrange required foreign authority and a New Mexico registered agent. Remaining New Mexico receipts can sustain gross receipts tax, and retained employees can preserve payroll accounts. Final returns and account closure should be limited to obligations that actually end. The current 5.9 percent corporate income tax and any pass-through election deserve review when estimating the move's tax consequences. Keep the signed plan and approvals with both states' accepted filings and required consents. Assign responsibility for any remaining New Mexico reports and the first destination reporting cycle, so the legal merger is followed by complete account and licensing updates.

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