Hamza Bendera/Marrakech Express

13-5

The Taxpayer operated a shop in New Mexico in 2008 and 2009, that sold pipe tobacco, cigarettes, pipes and other smoking accessories.  The Taxpayer failed to pay the Tobacco Products Tax (TPT) on pipe tobacco that he purchased from June 2008 through December 2009.  The Department learned of the Taxpayer’s activities selling pipe tobacco and checked its records on the business.  The Taxpayer was registered under a CRS number, but had not been paying TPT.  The Department conducted an audit of the Taxpayer, and repeatedly requested documentation from the Taxpayer during the audit period.  The Taxpayer did not provide the requested documentation.  On February 1, 2011, the Department assessed the Taxpayer for the TPT, penalty and interest.  The Taxpayer filed a formal protest of the assessment.  As part of his protest, the Taxpayer argued that the method used by the Department to calculate his TPT was unfair.  The Department estimated the liability using average tobacco purchases of regional tobacco purchasers of a similar size, as the Taxpayer did not provide other documentation that could be used to calculate TPT.  The Hearing Officer found that the method used was reasonable and that the Taxpayer was liable for the assessed TPT, penalty and interest.  The Taxpayer’s protest was denied.