How to Start an HVAC Business in New Mexico: MM-3 License and EPA 608

Running an HVAC business in New Mexico takes two credentials that people often mix up. The first is a state contractor license from the Construction Industries Division (CID) of the Regulation and Licensing Department. For heating, ventilation and air conditioning work, that is the MM-3 classification. The second is EPA Section 608 refrigerant certification, a federal requirement for technicians who handle refrigerant. The state license does not replace EPA 608, and EPA 608 does not authorize you to contract.

This guide lays out the order that works in practice: confirm your classification, qualify your experience, form the business entity, bond it, apply to CID, register for taxes, check local rules, and certify your technicians. It assumes you have never filed a contractor license before.

Informational only. This article is general information, not legal or tax advice. Fees, forms, and rules change. Confirm every figure with the agency named in the step, and talk to a New Mexico attorney or CPA before you choose your entity, structure your taxes, or sign a contract.

What You Need Before You Start

Gather these items first. Most delays come from incomplete paperwork, not from the state moving slowly.

• Proof of four years of HVAC experience. The MM-3 classification requires four years. Keep dated records such as employer letters, job lists, and permits you pulled. Ask CID which documents it accepts.
• A qualifying party. This is one individual who qualifies the business and must pass the exam at 75%.
• A business name that meets New Mexico naming rules (covered in step 3).
• A registered agent and registered office in New Mexico.
• A $10,000 surety bond from a surety company.
• Identification and tax information that the agencies request, and an email address for notices. Filings go through the Secretary of State's online portal, and approvals and corrections come by email.
• A fee budget. The table below lists the fees involved.

Fees at a Glance

Item	Cost	Agency
LLC Articles of Organization	$50	New Mexico Secretary of State
Name reservation (optional)	$20, valid 120 days, not renewable	New Mexico Secretary of State
Expedited LLC filing (optional)	$150 for same business day service if received before 2:00 p.m.; $100 for two business day service	New Mexico Secretary of State
Corporation Articles of Incorporation	$100	New Mexico Secretary of State
Change of registered agent or office, LLC	$20	New Mexico Secretary of State
CID application fee, MM-3	$30	CID
CID annual fee, MM-3	$50 a year (check CID for the current amount)	CID
CID annual fee, MM-98 mechanical	$100 a year (check CID for the current amount)	CID
$10,000 surety bond	Face amount is $10,000; premium is set by the surety, so get a quote	Surety company
Business Tax Identification Number (BTIN)	No charge	Taxation and Revenue Department
Journeyman certificates and EPA 608 exams	Set by the provider; check with CID and your certifying organization	CID; EPA-approved certifier

Expect local registration and insurance costs on top of these. Those vary by city and carrier, so price them separately.

Step 1: Pick the Right Classification

Decide what work you will perform before you apply. The MM-3 classification covers HVAC air handling and refrigeration equipment, ductwork, and evaporative cooling units. It requires four years of experience.

The MM-98 mechanical classification covers MM-1 through MM-4 work and also requires four years. If your plans reach past MM-3 into the other mechanical categories, ask CID which classification your planned scope needs. Do not assume that one license covers everything you intend to bid.

Write your scope down in one paragraph. You will need it when you talk to CID, your surety, and your insurance agent.

Step 2: Confirm Your Experience and Name a Qualifying Party

New Mexico licenses a business entity, not an individual. The entity is qualified by an individual qualifying party, and that person must pass the exam at 75%. The qualifying party is usually the owner or the most senior technician who will run field operations, but the choice is yours to make.

Before you name someone, check two things with CID: what counts toward the four years, and how exam scheduling and eligibility work. The sequence in this article (experience, entity, bond, application) reflects the common path. Confirm the sequence with CID before you spend money.

Step 3: Form Your Business Entity

Form the entity before you apply for the license, because the license is held by the business. Most small HVAC companies choose a limited liability company (LLC) or a corporation. Both file with the Secretary of State through the SOS Enterprise Business Filing System at enterprise.sos.nm.gov.

LLC

The LLC Articles of Organization cost $50. An LLC files no annual or biennial report with the Secretary of State, and a default pass-through LLC owes no franchise tax. Name rules are strict:

• The name must include “limited liability company,” “limited company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” Limited may be abbreviated “ltd.” and company may be abbreviated “co.”
• It must be distinguishable from any existing New Mexico LLC, limited partnership, or corporation, any authorized foreign LLC or corporation, and any reserved name.
• If you will trade under a different name, state that name in the Articles of Organization. New Mexico has no separate DBA filing.

Search the register at enterprise.sos.nm.gov/search before you pick a name. If you need to hold a name while you prepare, a name reservation costs $20 and lasts 120 days. The Secretary of State does not publish a standard processing time. Expedited service is available for $150 for same business day handling if your filing arrives before 2:00 p.m., or $100 for two business day service. Expedited fees are paid separately and are nonrefundable. Confirm with the Secretary of State that expedited service is currently offered.

Corporation

Articles of Incorporation cost $100. A corporation files a Corporate Report every two years at $25, and the first report is due within 30 days after the certificate of incorporation is issued. A corporation also owes a $50 annual corporate franchise tax, reported on form CIT-1. An LLC that elects to be taxed as a corporation owes the same $50 franchise tax. Corporate income tax is a flat 5.9% of taxable income for tax years beginning on or after January 1, 2025.

Registered Agent

Every LLC needs a registered office in New Mexico, which can be your principal place of business, and a registered agent for legal papers. The agent must be a New Mexico resident, a domestic business with a New Mexico place of business at the registered office, or a foreign business authorized to operate here with a place of business at that address. Changing the agent or the office costs $20 for an LLC. A business that cannot be served at its registered office can miss court papers entirely, so keep the agent details current.

Step 4: Get the $10,000 Surety Bond

CID requires a $10,000 surety bond under 14.6.3.8 NMAC. Contact a surety company or an insurance agent who writes contractor bonds before you apply. Premiums are set by the surety based on your credit and history, so ask for a quote. Confirm the bond form and the principal name with CID so the bond matches the entity name exactly.

Step 5: Apply to CID for the MM-3 License

The license application is filed with CID under 14.6.6 NMAC, in the name of the entity, qualified by your individual qualifying party. Pay the $30 application fee. The annual rule fee under 14.5.5.8 NMAC is $50 a year for MM-3 or $100 a year for MM-98. Those figures come from the rule, but rule fees change, so check CID for current amounts before you budget for renewal.

Submit complete paperwork. Incomplete applications stall, so confirm CID's current processing time with CID and plan for a gap between your application and your first job.

Step 6: Register With the Taxation and Revenue Department

Get your Business Tax Identification Number (BTIN) from the Taxation and Revenue Department at tax.newmexico.gov. The BTIN is free. Be clear about what it is: it is a tax registration, not a license. Obtaining it does not put you on the CID license list, and holding it does not satisfy any licensing requirement.

New Mexico has no sales tax. It does have a gross receipts tax, which 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. Your city's rate applies to your location. Because the tax falls on your receipts, it is a cost your pricing has to cover, not a line item the law automatically passes to the customer. Ask the department or your CPA how it applies to your invoices and whether any exemption fits your work. The department's registration guidance is at tax.newmexico.gov/businesses/who-must-register-a-business.

Step 7: Check City and County Registration

New Mexico issues no general statewide business license. Cities and some counties charge their own flat annual business registration. Albuquerque, Las Cruces, Rio Rancho, Santa Fe, and other cities may each have a different requirement, and so may your county. Check with the city clerk or county office where you will work and where you will keep your shop or office.

Step 8: Certify Your Technicians

Journeyman certificates are required for technicians doing mechanical work under 14.6.4 NMAC. Two classes matter most for HVAC:

• Refrigeration journeyman (JR). The applicant must show EPA refrigerant recovery compliance. Get your EPA 608 card before you apply.
• Sheet metal journeyman (JSM). A JSM can work under an MM-3 or MM-98 license.

Ask CID which certificate fits each person's role, and whether a technician can perform work before the certificate is issued.

Step 9: Get EPA Section 608 Certification

EPA Section 608 is a federal requirement under the Clean Air Act. It is separate from your state license, and it applies to any technician who maintains, services, repairs, or disposes of equipment that could release refrigerant into the air. EPA certification comes in four types:

• Type I: small appliances.
• Type II: high-pressure refrigerant systems.
• Type III: low-pressure refrigerant systems.
• Universal: covers Types I, II, and III.

Each technician who handles refrigerant needs the certification that matches the equipment they touch. Exams are given by EPA-approved certifying organizations, and fees differ by provider, so compare them. The program details are at epa.gov/section608. Keep a copy of each technician's card with your job records. A technician without current certification should not handle refrigerant, even if the company holds a state license.

Step 10: Protect the Business

Talk to an insurance agent about liability and other coverage before your first job, and ask CID and your bonding company what coverage they expect you to carry. Open a business bank account in the entity's name, keep records of every payment and invoice, and set up a system for tracking gross receipts so your tax filings are straightforward. The New Mexico Small Business Development Center at nmsbdc.org offers free advising that many first-time owners use to check their plan.

Common Mistakes to Avoid

• Treating the BTIN as a license. It is a free tax registration. CID licensing is a separate process.
• Confusing EPA 608 with state licensing. Each technician needs EPA 608 for refrigerant work, but that card does not qualify the business.
• Expecting a state DBA. New Mexico has no statewide DBA or assumed-name registration. Put the trade name in your LLC Articles or confirm the correct process with the Secretary of State.
• Using a name without the required entity words. A name that lacks LLC or a similar form will be rejected.
• Missing the corporate report. A corporation's first report is due within 30 days after incorporation, and corporations file biennially after that. An LLC has no such report, so do not assume the rules match.
• Assuming one qualifying party covers everyone. Check which journeyman certificates and EPA cards each technician needs for their specific work.
• Quoting a timeline without slack. Exam scheduling, document review, and bond approval all affect your start date. Build in extra weeks.
• Skipping city registration. A state license does not cover a city or county registration.

What to Expect When You Finish

When the entity is formed, the bond is in place, CID approves the application, and your technicians hold the right credentials, the business is generally positioned to perform classified MM-3 work under its license, subject to the conditions CID attaches. Results depend on your experience, your paperwork, and your local market, so no outcome is guaranteed.

Most owners find that the first months go to setup rather than service calls. Use the time to organize your records, confirm your city registration, and get your pricing right with the gross receipts tax in mind.

Frequently Asked Questions

Does New Mexico have a general business license for HVAC?

New Mexico issues no general statewide business license. HVAC contracting is licensed by CID under 14.6.6 NMAC. Cities and some counties may require their own registration.

Can I work under my EPA 608 card instead of a state license?

No. EPA 608 covers refrigerant handling for an individual technician. A state contractor license is a separate requirement that applies to the business.

Who should I consult?

Talk to a New Mexico attorney about your entity choice and contracts, and a CPA about gross receipts tax, income tax, and bookkeeping. Confirm licensing details directly with CID, and confirm filings with the Secretary of State and the Taxation and Revenue Department.

Official Resources

• New Mexico Secretary of State, business services
• SOS Enterprise Business Filing System
• New Mexico Taxation and Revenue Department
• EPA Section 608 refrigerant certification
• New Mexico Small Business Development Center

Disclaimer. This article is informational, not legal or tax advice. Licensing, tax, and filing rules change, and the figures above should be confirmed with the named agency before you rely on them. For complex situations, consult a qualified New Mexico attorney or CPA.