On September 14, 2016, the Department assessed the Taxpayer as a successor in business for tax, penalty, and interest for tax periods starting March 31, 2009 ending August 31, 2015. On December 12, 2016, the Taxpayer filed a formal protest letter with the Department. The Taxpayers was the owner of a prior company of which is now being assessed as a successor in business. The first company did not own any property or inventory and most of its construction work was built on tribal lands. The first company was having issues due to late payments from customers and so the Taxpayer started another business to bid on other contracts outside of tribal lands. The Department had issued an audit selection letter on September 5, 2014 and the Taxpayer created the second company on September 29, 2014. Per Regulation 220.127.116.11(A) NMAC, there are eight factors that help determine if there is a successor in business. During the hearing, the Hearing Officer went through each factor and evaluated them against the facts provided to determine if the Taxpayer was in fact a successor in business. The Hearing Officer determined that the Taxpayer is a successor in business and that the tax is due. However, the Hearing Officer determined as the Taxpayer was originally assessed in September 2016 the penalty and interest should be abated. This decision was based on a recent legislative law change in 2017 to Section 7-1-61 NMSA 1978, which now specifically states that a successor in business is responsible for tax, penalty, and interest. For the forgoing reasons, the Taxpayer’s protest is granted in part and denied in part.