JDJ Services, Inc.



The Taxpayer is a private, for-profit corporation that performed services for Amtrak as an independent contractor.  The Taxpayer’s inspection, maintenance, and cleaning of Amtrak rail cars was performed by the Taxpayer’s employees in Albuquerque during Amtrak’s scheduled stops.  The Taxpayer did not understand that New Mexico’s gross receipts tax is imposed on the seller, not the buyer, and relied on Amtrak’s statutory exemption from state and local taxes.  Following a 2006 audit, the Taxpayer was assessed for gross receipts tax on its receipts from performing services for Amtrak in New Mexico.  The Taxpayer protested, arguing that it was entitled to claim Amtrak’s exemption from state taxes; that it was engaged in interstate commerce; that it was entitled to the deduction for interstate transportation provided in § 7-9-56; and that it relied on a tax exemption certificate received from Amtrak.  The Hearing Officer rejected these arguments, holding:  (1) the Taxpayer did not qualify for Amtrak’s statutory exemption from tax; (2) the assessment of gross receipts tax did not violate the commerce clause; (3) the Taxpayer was not engaged in transporting persons or property and could not claim the deduction in 7-9-56; and (4) the Taxpayer’s reliance on the representations of Amtrak did not excuse the Taxpayer from payment of taxes due to the state.  Protest denied.