On March 4, 2013, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the periods from January 31, 2007 through September 30, 2011. On April 24, 2013, the Taxpayer filed a formal protest letter. The Taxpayer sells licenses to use software in New Mexico, mainly to car dealerships. The Taxpayer admits that its sales in New Mexico are subject to gross receipts tax. The Taxpayer contracts directly with its customers when it sells the software licenses. The customers are required to make an initial down payment, and then frequently need to use financing options, either directly with the Taxpayer or with a lender to pay for the software licenses. The Taxpayer has a separate agreement with the lenders it recommends to customers, but these lenders are free to decline to finance the customers and the Taxpayer cannot bind the lenders in any transaction. With regard to the assessment, the Taxpayer argued that the lenders were responsible for the gross receipts taxes on its contracts with its customers, and that the lenders in fact paid the gross receipts tax. The Taxpayer argued that the assessed amounts were incorrect, but did not provide any evidence. The Department argued that the Taxpayer was required to pay gross receipts tax on all of its sales and if the lenders were paying gross receipts tax, that tax was their own, and they were not paying the Taxpayer’s gross receipts taxes. The Taxpayer presented no evidence or argument regarding any specific exemption or deduction that it believed applied to its receipts, nor did the Taxpayer meet any of the necessary conditions for equitable recoupment. The Taxpayer’s protest was denied.
Market Scan Information Systems, Inc.