In November 1997, the Taxpayer began selling tobacco products at retail. The Taxpayer purchased the products she sold from tobacco wholesalers. The Taxpayer then entered into buydown and shelf-display contracts with various cigarette manufacturers. Under the terms of her buydown contracts, the Taxpayer agreed to reduce the price of certain brands of cigarettes by a specified dollar amount for a specified period of time and to advertise the discounted price. In return, the manufacturer agreed to pay the Taxpayer the difference between her usual retail price and the discounted price of the cigarettes covered by the agreement. The Taxpayer charged her customers gross receipts tax on the discounted price and remitted this amount of tax to the state. The Taxpayer did not pay gross receipts tax on the buydown payments she received from the cigarette manufacturers. Under terms of her shelf-display contracts, the Taxpayer allowed cigarette manufacturers to place free-standing, movable shelves at designated places in her store and temporary displays in other areas. The Taxpayer did not pay gross receipts tax on the payments she received from these contracts. In December 2000, following a field audit, the Department assessed the Taxpayer for gross receipts tax, penalty and interest on the Taxpayer’s receipts from both the buydown and shelf-display contracts. The Taxpayer protested the assessment arguing: 1) payments from the buydown agreements served to reduce the cost of her inventory and are not taxable; 2) payments from the shelf-display contracts were receipts from the lease of real property and are deductible under Section 7-9-53 NMSA 1978; 3) the six-month delay between the date the field audit started and the date the assessment was issued was unreasonable; and 4) she should not be penalized for her lack of knowledge and honest mistakes. Held: The Taxpayer’s receipts from her buydown and shelf-display contracts are gross receipts subject to tax. Pursuant to Section 7-1-67 NMSA 1978, the Taxpayer is liable for interest on unpaid gross receipts tax. Pursuant to Section 7-1-69 NMSA 1978, the Taxpayer was negligent in failing to report gross receipts tax during the period at issue and penalty was properly assessed. Protest denied.