Taxpayer, an artist, sold his artwork through consignment agreements with galleries located both inside and outside New Mexico. Taxpayer also owned a large warehouse in New Mexico, which he used as a studio and occasionally rented to film companies. In May 1998, the Department assessed the Taxpayer gross receipts tax, penalty and interest on his 1994 business income as reported on Scheduled C to his federal income tax return. The Taxpayer protested the assessment, arguing: 1) the Department erroneously included receipts from out-of-state sales when calculating the liability; 2) receipts from sales on consignment were deductible even in the absence of NTTCs; and 3) receipts from renting the warehouse were receipts from leasing real property and were deductible under Section 7-9-53 NMSA 1978. Held: 1) the Taxpayer provided sufficient evidence to establish that certain sales were made out-of-state and were not subject to gross receipts tax; 2) based on a regulatory change made by the Department, the Taxpayer was entitled to deduct his consignment sales without having possession of an NTTC; 3) the Taxpayer gave up sufficient control over his warehouse to qualify his rentals as a lease of real property deductible under Section 7-9-53 NMSA 1978. Protest granted.