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James M. and Terry K. Crowe



In 2000, James Crowe was hired as the business development manager for EchoPort, Inc., a small company with offices in Albuquerque, New Mexico.  Mr. Crowe spent some time at EchoPort’s Albuquerque office, consulting with company’s managers and using the telephone to contact potential customers, some of whom, he said, were located out of state.  Also in 2000, Dr. Terry Crowe did consulting work for Louisiana State University in New Orleans and North Park University in Chicago. The taxpayers filed their 2000 federal and New Mexico personal income tax returns. After learning of the business income, the Department found that the taxpayers were not registered for payment of gross receipts tax.  In response to a Department audit, Mr. Crowe furnished copies of the Form 1099’s received for Dr. Crowe’s consulting services and Mr. Crowe’s work for EchoPort.  The Department accepted the Form 1099’s as evidence Dr. Crowe’s services were performed out of state and not subject to New Mexico gross receipts tax.  Because EchoPort was based in Albuquerque, the Department asked Mr. Crowe to provide documentation supporting his claim that his services also were performed out of state.  Mr. Crowe told the Department he had disposed of all the paperwork related to his work with EchoPort, including his employment contract and his expense reports and travel receipts, and did not have any documents that would establish his out-of-state travel during the 2000 tax year.  The Department assessed gross receipts tax, penalty and interest, and Mr. Crowe filed a written protest of the assessments, claiming that no gross receipts tax was due because his services were performed out of state. Since Mr. Crowe did not maintain adequate records to prove that his services were performed out of state and therefore qualified for exemption from New Mexico gross receipts tax, his protest was denied.