Inn of the Anasazi


On October 2, 2020, the Department issued the Taxpayer an account balance notice indicating penalty due because of the late filing and payment of gross receipts tax. On October 18, 2020, the Taxpayer responded with a formal protest of the penalty. The Taxpayer, a hotel in Santa Fe, explained that the return had been filed late because the COVID-19 health emergency had caused it to close and furlough staff that normally would have filed the return. The extension provided by legislation due to COVID-19 allowed for late payment of gross receipts tax only if the tax return was filed by April 25, 2020. The tax return was filed in July of that year. Though the Hearing Office sympathized with the Taxpayer regarding the severe impact of the pandemic on its business, in order for the penalty to be abated the Taxpayer would need to show non-negligence. In this case the Hearing Officer determined that two of the criteria within the definition of negligence had been met: that it had failed to exercise a degree of ordinary business care and prudence that reasonable taxpayers would exercise, and that it had shown inaction where action was required. Other means provided in regulation to demonstrate non-negligence, such as illness or damage to records, were not applicable in this case. Since there was not a provision in law to support the abatement of the penalty, the Hearing Officer denied the request for abatement and ordered the protest denied.