On August 12, 2016, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax periods from January 31, 2009 through December 31, 2014. On November 9, 2016, the Taxpayer filed a protest letter with the Department. The Taxpayer provides hospice services from health care practitioners. The services provided are commercial contract services or Medicare part C services that are paid for by managed health care providers or by health care insurers and are not otherwise deductible. During the time at issue, the Taxpayer claimed a deduction from gross receipts tax under Section 7-9-93 NMSA 1978. During an audit, the deductions under that section were denied and the Taxpayer was assessed. Section 7-9-93 NMSA 1978 was amended by the legislature during the 2016 legislative session to clarify the type of health care provider that may take certain deductions. The Taxpayer argued that the statute does not limit the entity that may take the deduction and that the regulations that attempt to create such a limitation are improper. The Department argued that the deduction is limited to health care practitioners and those health care facilities, such as the Taxpayer, cannot take the deduction. The Department also argued that the regulation is consistent with the legislative intent of the statute. The Hearing Officer determined that the statute provided for any taxpayer who had receipts of qualifying payments to take the deduction. Therefore, the Taxpayer was entitled to take the deduction under the statute. The Taxpayer pointed out that under the current statute signed into law after the 2016 regular session, the Taxpayer would not be entitled to take the deduction. The Hearing Officer also determined that the amended statute would only apply going forward from the date it was enacted. For the foregoing reasons, the Taxpayer’s protest is granted.
Golden Services Home Health And Hospice