On April 30, 2019, the Department issued a return adjustment notice denying the refund request on the Taxpayer’s personal income tax return and instead assessed tax in the amount of $328.31. On July 29, 2019, the Taxpayer submitted a formal protest contesting the assessment. The issue to be decided in the case was whether it was appropriate for the Taxpayer to be allowed a credit for taxes paid to Arkansas on the New Mexico return, and if allowed how much the credit should be. The Taxpayer and his spouse are both residents of New Mexico and used the allocation and apportionment schedule of the income tax return so that certain types of income earned in another state would not be included on the New Mexico return. The income that the Taxpayer allocated to New Mexico did not include the rental income and capital gains that was earned in Arkansas and, consequentially, the Taxpayer was not being taxed on the New Mexico return on that income. When calculating the credit for taxes paid to another state, an individual multiplies the credit amount by the percentage allocated to the other state on the apportionment schedule. By doing this the credit allowed is only for income that was taxed in both states. Though the Taxpayer had sufficient evidence of the fact that he had paid tax to Arkansas, the credit calculated was not multiplied by the percentage of income allocated to Arkansas and so the Department adjusted this amount. The Hearing Officer determined that this adjusted amount calculated by the Department was correct. This having been decided, the Hearing Officer ordered that the assessment amount on the adjustment notice was correct and the protest denied.