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Strategic Consulting Associates



On October 28, 2014, the Taxpayer filed a claim with the Department for a refund of gross receipts taxes for the reporting periods from January 1, 2006 through March 1, 2008.  On November 10, 2014, the Department denied the Taxpayer’s claim for refund, citing that the statute of limitations had expired.  On November 20, 2014, the Taxpayer protested the Department’s denial of claim for refund.  The Taxpayer began as a sole proprietorship sometime in late 2005 or early 2006, performing consulting services mainly outside of New Mexico, some in New Mexico.  The Taxpayer consulted with the Department as part of setting up the business, and states that he was told that the gross receipts tax was required on all of the Taxpayer’s receipts, whether from in-state or out-of-state clients.  The Taxpayer did not receive any written advice from Department employees and did not know the names of the Department employees he had consulted with.  During the period in question, the Taxpayer paid gross receipts tax on all of his receipts from out-of-state consultation services.  In 2008, the downturn in the economy caused the Taxpayer’s business to stagnate, so the business was stopped and the sole proprietor got employment elsewhere.  In April 2013, the Taxpayer was revived as a corporation with a new CRS number.  As part of reviving the business, the Taxpayer consulted with a tax preparer, who informed him that any receipts derived from the performance of out-of-state services was not subject to gross receipts.  As a result, the Taxpayer filed a claim for refund in January 2014, for a reporting period in 2013.  That claim was granted.  The Taxpayer then filed the claim for refund at issue.  The last reporting period for which the Taxpayer wanted to claim a refund was the period ending on March 31, 2008, and under the statute of limitations (Section 7-1-26 NMSA 1978) the claim for refund must be filed within three years of the end of the calendar year in which the tax was due, which would have been no later than December 31, 2011.  The Taxpayer’s claim for refund was made well beyond the three-year statute of limitations. The Taxpayer’s protest was denied.