On April 21, 2107, the Department assessed the Taxpayer for workers’ compensation fees, penalty, and interest for periods starting March 31, 2011 through December 31, 2015. On April 21, 2017, the Department also assessed the Taxpayer for gross receipts tax, penalty, and interest for the period starting June 30, 2011 through February 29, 2016. On July 25, 2017, the Taxpayer submitted its timely formal protest of the assessments. The Taxpayer is a licensed provider of hospice care services that is authorized by the federal authorities to provide services to Medicare and Medicaid patients. The main issue to be decided in this protest is whether or not the Taxpayer’s receipts from Medicaid, for the room and board of its patients residing in nursing home facilities, are excluded from gross receipts tax under the Gross Receipts and Compensating Tax Act. The Taxpayer argues that the receipts received from Medicaid to compensate the nursing home facilities for room and board are not taxable because the Taxpayer was acting in a disclosed agency capacity. The Hearing Officer pointed out that the invoices from the nursing homes were all issued to the Taxpayer referencing the patient’s name. Therefore, the invoices were expected to be paid by the Taxpayer and not anyone else. The invoices were then used by the Taxpayer to prepare its own invoices for room and board that were submitted electronically to Medicaid via the medical care organization. The invoices from the Taxpayer did not reference the nursing homes that the patients resided in and payment was made directly to the Taxpayer. There was no indication that the payment being received by the Taxpayer was being claimed on behalf of a nursing home. The Hearing Officer determined that the Taxpayer did not provide any evidence to establish that it had authority to act on behalf of the nursing home facilities and therefore did not establish that it was a disclosed agent. The Taxpayer argued that the nursing homes should have already paid gross receipts tax on this amount and therefore based on Section 7-1-28 (F) NMSA 1978; equitable recoupment the assessment should be abated. There are three elements that must be met to allow equitable recoupment, of which, the Taxpayer was unable to provide and the Department could not verify based on confidentiality laws. In regards to the worker’s compensation assessment, no evidence or arguments were provided in this manner and it was determined that the protest in regards to this should be denied. The Hearing Officer determined that the Department’s assessment of tax, penalty, and interest was correct. For the forgoing reasons, the Taxpayer’s protest is denied.
Del Corazon Hospice LLC