On November 21, 2022, the Taxpayer requested a refund for motor vehicle excise taxes paid. On December 8, 2022, the Department denied the application for refund. On February 3, 2023, the taxpayer protested the denial of the refund. The Taxpayer argued they overpaid the motor vehicle excise tax on four trailers that were fitted with electric generators used primarily as a power source at oilfield drilling sites. The Taxpayer argued that only the value of the trailers, excluding the value of the generators that can be separated from the trailer, should be subject to the tax. The Taxpayer pointed to the federal definition of “parts or accessories” as the reason why the generator should be excluded from the value. The Department cited Regulation 3.11.4.7(D) NMAC defining “price paid” to include accessories. The Hearing Officer determined that as the motor vehicle excise tax does not define “accessory” the federal definition could be relied on and that the generators do not contribute to the function of trailer. The protest was granted.
