The Taxpayer is engaged in the business of treating oil wells in New Mexico, Oklahoma and Texas. In 1994, when the Taxpayer began servicing oil wells in New Mexico, he called the Taxation and Revenue Department to determine his tax liability in New Mexico. A Department employee incorrectly advised the Taxpayer that he was not subject to tax. In 2000, a friend told the Taxpayer he should be paying tax to New Mexico, and the Taxpayer again contacted the Department. The first two employees could not answer his question. He was finally transferred to a supervisor, who correctly advised the Taxpayer that he should be paying gross receipts tax on his receipts from treating oil wells in New Mexico. The Taxpayer then filed six years of back gross receipts tax returns. In June 2001, the Department assessed the Taxpayer for penalty and interest on his late payment. The Taxpayer protested, arguing that he should not be liable for penalty and interest when his failure to make timely payment was due to incorrect advice received from the Department. Held: The Taxpayer was affirmatively misled by a Department employee and was not negligent in failing to report gross receipts tax to New Mexico. Accordingly, the negligence penalty should be abated. Although the Taxpayer’s failure to pay tax was not intentional, the Taxpayer had the use of the state’s tax funds during the period at issue, and interest remains due pursuant to Section 7-1-67 NMSA 1978. Protest granted in part and denied in part.