How to Start a Short-Term Rental in Taos: 120-Permit Cap, Zoning Districts and Lodger's Tax

If you want to run a Taos NM short term rental, the Town of Taos has three gates to clear before your first guest checks in: a capped permit pool, a zoning map that rules out most of the historic core, and a tax setup that makes you the collector for two separate taxes. This guide covers the order to handle each gate, the key figures, and the points you need to confirm with the Town before you spend money on a property or a listing.

Disclaimer: This article is informational content, not legal or tax advice. Zoning, permit and tax rules change, and the Town of Taos ordinance and staff interpretations control. For a property purchase, a lease, a business entity choice or a tax question, talk to a qualified attorney or CPA.

What the Town of Taos Requires, in Brief

Short-term rentals in Taos are governed by Town of Taos Ordinance 22-12, adopted September 27, 2022. Four rules shape every other step in this guide:

• A cap of 120 permits. Permits were issued first come, first served beginning April 1, 2022, until all 120 were issued.
• A prohibited core. Short-term rentals are prohibited in the Historic District(s), the Historic and Hotel Overlay Zones and the Central Business District. The one exception is a unit that was previously permitted and in compliance, which can renew.
• Allowed zones only. Use is allowed only in the listed residential and commercial districts, and in some of those districts only with a conditional use permit.
• An annual cycle. Permits expire September 30 each year and must be renewed online by November 30.

Materials and Information to Gather Before You Apply

Put these together before you contact the Town or file any state paperwork. Most delays come from a missing document or an answer you assumed instead of confirmed.

• The property address, parcel information and the owner's contact details, plus your deed or lease if you do not own the home. Ask Planning which documents it expects.
• The zoning district for the parcel, taken from the Town's zoning map, and any overlay district that covers it.
• A smoke detector, a carbon monoxide detector and a fire extinguisher for the unit, or any other features the Fire Marshal requires.
• A draft rental packet with host contact information, a local responsible party's contact information and safety information for guests.
• If you form an LLC: the Articles of Organization ($50), your registered agent details and the name you plan to use.
• Your Business Tax Identification Number (BTIN) from the Taxation and Revenue Department, and your gross receipts tax (GRT) registration.
• A calendar with the September 30 expiration date and the November 30 renewal deadline.
• Phone numbers: Senior Planner Dinah Gonzales at (575) 751-2034, and the Town's Customer Service line at (575) 751-2019 for Lodger's Tax questions.

Step 1: Confirm Your Parcel Sits in an Allowed Zone

Check the zoning before you check the listing price or the rental projections. A home in the wrong district cannot be permitted, no matter how well it would perform.

Zone group	Districts	What it means for you
Allowed residential	RA-20, RA-10, RA-6, RA, R-1, R-2, R-3, R-4, R-6, R-14	Permitted use, subject to the permit cap and the conditions in Ordinance 22-12
Allowed commercial	C-1, C-2	Permitted use, subject to the same cap and conditions
Conditional use	Some of the districts above	Needs a conditional use permit before you can operate. Ask Planning which districts and parcels qualify.
Prohibited	Historic District(s), Historic and Hotel Overlay Zones, Central Business District	No new short-term rental. Only a previously permitted, compliant unit can renew.

Two checks catch most mistakes here. First, overlay boundaries do not always follow the base zoning lines, so read the overlay map as well as the district label. Second, a conditional use permit is an extra approval step. Build that time into your plan, and do not sign a purchase or lease that depends on getting one unless you have written confirmation from Planning.

Call Senior Planner Dinah Gonzales at (575) 751-2034 with the parcel number and ask her to confirm the district, the overlay status and whether a conditional use permit applies.

Step 2: Confirm That a Permit Is Still Available

The 120-permit cap is the constraint most new hosts miss. Permits were issued first come, first served from April 1, 2022, until all 120 were issued. That means the pool may be full, and a zoning-compliant parcel does not guarantee you a permit.

Ask Planning three questions before you commit money:

1. Are any of the 120 permits currently available?
2. If the pool is full, is there a waitlist or any other route to a permit?
3. If a permit lapses or is surrendered, does it return to the pool?

Get the answers in writing. An email reply protects you if staff changes or a conversation is later remembered differently.

Step 3: Decide Whether to Form a Business Entity

New Mexico has no state general business license, so forming an entity does not give you permission to host. The entity question is about liability separation, tax treatment and how you want to hold the property. An attorney or CPA should help you choose.

Option A: Limited Liability Company (LLC)

• Filing fee: $50 for the Articles of Organization, filed online through the Secretary of State's SOS Enterprise system at https://enterprise.sos.nm.gov/.
• Annual report: None. New Mexico LLCs file no annual or biennial report with the Secretary of State.
• Franchise tax: An LLC taxed as a default pass-through does not owe the $50 corporate franchise tax.
• Name: The name must include “limited liability company,” “limited company,” or LLC, L.L.C., LC or L.C. It must be distinguishable from existing entities on file.
• Name reservation: $20, lasting 120 days and not renewable.
• Expedited filing: $150 for same business day service if received before 2:00 p.m., or $100 for two business day service. Both are paid separately and are nonrefundable.
• Registered agent: Every LLC must maintain a registered office and a registered agent in New Mexico. Changing either costs $20 for an LLC.

Option B: Corporation

A corporation costs more to keep. The Articles of Incorporation carry a $100 filing fee. The first corporate report is due within 30 days after the certificate of incorporation is issued, at a $25 fee, and then biennially. A corporation also owes a $50 annual franchise tax reported on form CIT-1 and a flat 5.9% corporate income tax on taxable income for tax years beginning on or after January 1, 2025. Most individual short-term rental owners do not need this structure, but a CPA should confirm that.

Trade names

New Mexico has no statewide DBA or assumed-name registration. If your LLC will operate under a different name, state that name in the Articles of Organization. Do not look for a state DBA filing that does not exist.

Step 4: Register for Tax Numbers

The Taxation and Revenue Department (TRD) issues a Business Tax Identification Number (BTIN) at no charge. The BTIN is a tax registration, not a license. Register through the TRD at the TRD business registration page, and use the TRD home page at https://www.tax.newmexico.gov/ for general tax information.

New Mexico has no sales tax. Instead, the gross receipts tax (GRT) is imposed on the seller. The state GRT rate is 4.875%, and combined state plus local rates run from 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027. Local rates vary by location, so confirm the combined rate that applies to Taos lodging with the TRD before you set your nightly price.

Step 5: Apply for the Town of Taos Short-Term Rental Permit

Check the Town of Taos Short Term Rentals page on the Town's official website for the current online application steps, since the process is posted there as of 2026. Then confirm these details with the Town:

• Permit fee: Confirm the current fee with Senior Planner Dinah Gonzales at (575) 751-2034. Do not budget from a figure you saw on a forum or an older listing.
• Amendments since 2022: A 2023 amendment ordinance was proposed. Ask staff whether it was adopted and what it changed, because an older summary of Ordinance 22-12 may be out of date.

The permit is tied to a specific unit in an allowed district. Keep the application package, approval letter and permit number in one folder, along with the date you need to renew.

Step 6: Meet the Safety Requirements

Each rental must have the following before guests arrive:

• An operable smoke detector.
• An operable carbon monoxide detector.
• A fire extinguisher, or other features the Fire Marshal requires.
• A rental packet that includes host and local responsible party contacts and safety information.

Test every device on the day you prepare the unit, then again before each season. Photograph the placement of the detectors and the extinguisher and keep the photos with your permit file, so you can answer an inspection question quickly. Ask the Fire Marshal's office whether any additional features apply to your unit before you buy equipment.

Step 7: Set Up Lodger's Tax and GRT Collection

Taos imposes a 5.0% Lodger's Tax on stays under 30 nights. The host must also charge and pay GRT. You are responsible for collecting and paying both taxes.

Online payment of the Lodger's Tax is not available. Call the Town's Customer Service line at (575) 751-2019 to set up payment and ask about filing dates.

Here is a simplified illustration. If the Lodger's Tax applies to a $200 room charge for a stay under 30 nights, it would be $10.00 at 5.0%. GRT would be added on top at the combined rate the TRD confirms for Taos. Confirm the taxable base with Customer Service before you rely on this math, because the taxable base can include or exclude fees depending on how the Town applies its rules.

• Show guests the tax as a separate line item on booking.
• Keep a monthly ledger of nightly rates, taxes collected and taxes paid.
• Set a calendar reminder for each remittance deadline the Town confirms.

Step 8: Build a Renewal Calendar

Permits expire September 30 each year. Renew online by November 30. Put both dates in your calendar on the day you receive the permit, and set a reminder for early October. Renewal is the only path that allows a previously permitted unit in the historic core to keep operating, so do not let it lapse. Ask Planning whether a lapsed permit can be restored before you assume it can.

Expected Results

A compliant setup may let you begin taking bookings once your permit is issued and your tax accounts are active. In practice, the paperwork usually takes longer than the listing setup. Plan for the permit timeline first, then the safety work, then the tax registrations.

Rental income depends on the property, the season, your pricing, your occupancy and the local market. Nothing in this guide is a promise of earnings or occupancy. Treat the first year as a test period and track real results against your costs, including the permit fee, the entity costs, the safety equipment, the taxes you collect and the time you spend on compliance.

Common Mistakes to Avoid

• Buying in the wrong zone. Buyers often assume a home can host because a neighbor does. Confirm the district and overlay before you make an offer.
• Assuming a permit is open. The 120-permit cap was reached through first come, first served issuance. Ask before you sign a lease or purchase.
• Skipping the conditional use step. In districts that require it, operating without the permit is a serious problem.
• Missing the November 30 renewal. Set reminders early.
• Treating the BTIN as a license. It registers you for taxes. It does not replace the Town permit.
• Looking for a state DBA. New Mexico has no statewide assumed-name filing. Use the Articles of Organization if your LLC trades under another name.
• Skipping Lodger's Tax because online payment is unavailable. Call Customer Service and set up payment.
• Relying on an old ordinance summary. Confirm whether the 2023 amendment was adopted.

Tips for a Smoother Start

• Call Planning before you buy, not after. A 10-minute call can save a deposit.
• Get every answer in writing and keep a dated file.
• Use the rental packet to reduce guest questions and to show you have a local responsible party in place.
• Ask your CPA to model the GRT and Lodger's Tax on your expected rate before you set prices.
• If you are unsure whether a parcel qualifies, the New Mexico Small Business Development Center at https://www.nmsbdc.org/ can help you organize the business side of the decision.

Cost and Fee Summary

Item	Amount	Agency	Status
LLC Articles of Organization	$50	New Mexico Secretary of State	Set by statute
LLC name reservation	$20, 120 days, not renewable	New Mexico Secretary of State	Set by statute
LLC expedited filing	$150 same business day or $100 for two business days	New Mexico Secretary of State	Set by rule
Business Tax Identification Number (BTIN)	No charge	Taxation and Revenue Department	Free
Lodger's Tax	5.0% on stays under 30 nights	Town of Taos	Town ordinance
Gross receipts tax (GRT)	Combined rate for Taos to be confirmed	Taxation and Revenue Department	Confirm with TRD
Town short-term rental permit fee	To be confirmed	Senior Planner Dinah Gonzales, (575) 751-2034	Confirm with Planning

Official Resources

• 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 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 Small Business Development Center: https://www.nmsbdc.org/
• SBA New Mexico district office: https://www.sba.gov/district/new-mexico
• Town of Taos Short Term Rentals page: find it through the Town's official website, as the page is posted there as of 2026

Next Steps

Start with the zoning check and the permit availability question, because those two answers decide whether the rest of the plan is worth pursuing. Then choose an entity, register for your tax numbers, and confirm the permit fee and the 2023 amendment status before you file. For any decision involving a purchase, a lease, a conditional use permit or your tax treatment, talk to a qualified New Mexico attorney or CPA.