01/17/1995
Inclusion of Income Earned out of state by a NM Resident
Darrell C. Bowers
The Department assessed the Taxpayer gross receipts tax for periods from 2015 through 2020. The Taxpayer contended the gross receipts associated with the protest were for administrative and risk-management services provided to independent contractors that were performing work with extraction companies albeit in New Mexico. Under Section 7-9-13.1, NMSA 1978 (1989, substantially amended 2020), Taxpayer’s receipts must be from selling services performed outside New Mexico and the product of the service must be initially used in New Mexico. The Hearing Officer held that “the service” Taxpayer was selling — administrative and risk-management services —were performed out-of-state and should not be imputed to the work performed by the independent contractors in New Mexico. The protest was granted.