The Taxpayers filed a formal protest after the Department denied their request for a refund of gross receipts taxes. Taxpayers own or control numerous telecommunications tower sites in New Mexico. Wireless carriers installed antennas and related telecommunications equipment at and on the tower sites to transmit and receive cell phone calls. The Taxpayer asserted that its agreements with wireless telecommunications carriers qualified as deductible real‑property leases under Section 7-9-53(A) NMSA 1978. The Department denied the refund request, determining that the agreements conveyed only limited licenses or access rights for the placement and operation of telecommunications equipment. Upon review, the hearing office evaluated the evidence, in comparison to the principles set forth in Quantum v. State Taxation and Revenue Department and found that the carriers did not obtain exclusive possession of the telecommunications carriers’ towers. The towers remained under the continuing control of the owner, despite contractual language characterizing the arrangements as leases. The Hearing Officer concluded that the agreements constituted licenses or limited rights of use rather than leases of real property. The protest was denied.
