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Home Dialysis of New Mexico LLC


The Department denied the Taxpayer’s request for refund of gross receipts tax for periods in 2013 through 2016 because it disallowed the deduction claimed by the Taxpayer on its amended returns. The Taxpayer provided home dialysis services to patients and believed that it qualified for the deduction which, in its 2007 version, allowed payments made by a managed health care provider for commercial contract services by a health care practitioner within the scope of their practice to be deducted. In 2016, the statute specified that the receipts had to be that of a health care practitioner. The Department argued that taxpayer was an outpatient facility, an entity excluded from the deduction, and that the entity itself was not a health care practitioner, which the deduction stated were the only individuals who could claim the deduction. It also argued whether the Taxpayer was performing health care services because the entity’s employees were only instructing patients how to operate the dialysis machines from home. The Hearing office did not agree with any of these arguments and determined that the Department did not properly support its arguments with evidence. The Hearing Officer determined that the Taxpayer was not a license outpatient facility under regulation and relied on a previous decision which had determined that an entity is allowed to take the deduction if its employees met the definition of health care practitioners under the statute. Also, the Hearing Officer rejected the Department’s argument that it was not providing health care services within the scope of its practice, as the entity’s employees were health care practitioners working with patients to make sure the dialysis equipment functioned properly and were monitoring the dialysis at all times. Having reached these conclusions, the Hearing Officer decided that the deduction should be allowed and granted the protest.