TPL, Inc.



The Taxpayer, a New Mexico corporation, entered into five research and development contracts with the federal government.  The taxpayer protested the Department’s assessment of gross receipts tax on its receipts from the contracts,  The Taxpayer argued that it entitled to a deduction under Section 7-9-57 NMSA 1978 because the product of its services was neither delivered to nor initially used by the buyer in New Mexico.  The Taxpayer also protested the assessment of gross receipts tax for failure to have timely possession of NTTCs.  The protest was denied with regard to three contracts where the product of the Taxpayer’s service was demilitarized munitions that remained in New Mexico and were subsequently transferred from the buyer to the Taxpayer in New Mexico. The protest was granted with regard to two contracts where the product of the service was limited to data and reports delivered and initially used outside New Mexico.  The protest was also granted on the NTTC issue because there was no evidence the Department had delivered a 60-day letter to the Taxpayer, which meant that the Taxpayer’s production of NTTCs after the audit was timely under Section 7-9-43 NMSA 1978.