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Trader Barbs Old Town LLC


On August 12, 2019, the Department assessed the Taxpayer for gross receipts tax for periods in 2013 through 2016. On November 12, 2019, the Taxpayer filed a formal protest of the assessment. The Taxpayer sold jewelry out of her shop in Albuquerque and sometimes sold customized jewelry shipped by mail to buyers outside the state. The Taxpayer claimed that the tax she was assessed came from sales made outside the state and which were not subject to gross receipts tax. Though the Taxpayer lost most of her records during this period because of a flood in her basement, she was able to provide considerable support of her long-term business practices. She was able to show years of ledgers prepared by a CPA, a shipping analysis of out-of-state sales, bank statements, and credit card receipts that she used to reconstruct which receipts were out-of-state sales. The Taxpayer also had evidence showing her usual process for the sale of customized jewelry sold out-of-state, such as records of when a credit card would be charged and customer phone numbers which would be obtained for out-of-state sales, providing further support. The Department argued that these records were not enough to support out-of-state sales, but the Hearing Officer disagreed, determining that the evidence presented did show that the Taxpayer had been making good faith attempts to document sales and report the gross receipts correctly and that the Department had failed to meet the shifting burden of proof that its assessment was correct. This having been determined, the Hearing Office ordered the assessment be abated and the protest granted.