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Caleb Dutton Dutton Diesel Repair



On February 11, 2015, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax periods of June 30, 2009 through December 31, 2009; April 1, 2010 through December 31, 2010; and April 1, 2011 through December 31, 2011.  On April 3, 2015, the Taxpayer filed a protest to the assessments.  The Taxpayer was conducting business running a repair shop in New Mexico during the periods in question.  The Taxpayer primarily does repairs and sells parts to UPS Oasis, who resells the Taxpayer’s repair services and parts to its parent corporation.   The Taxpayer failed to timely file CRS reports for the tax periods at issue.  The Department conducted a limited scope audit on the Taxpayer.  The Taxpayer then filed CRS reports in January 2015 for the assessed periods.  The Taxpayer claimed deductions for large portions of his gross receipts, relying on his acceptance of a multistate jurisdiction sales and use tax certificate (MTC) from Oasis.  The Taxpayer requested appropriate tax documents for New Mexico from Oasis when he began doing business with them, and believed that his receipts were not taxable because they provided him with the MTC.  The Taxpayer did business with other entities and did not pay or file gross receipts taxes on those transactions either.  The Taxpayer also argued that his gross receipts were less than those assessed and should be limited to the amounts reported in his late filed CRS reports.  The Taxpayer had no evidence to support this and was unable to overcome the presumption of correctness on the assessed amounts.  The Taxpayer accepted a timely MTC in good faith and argued that he was entitled to deduct his receipts.   However, the Department recognizes MTCs only in reference to sales of tangible personal property, not the sale of services.  The Department argued that because of this, the MTC was totally inapplicable to the Taxpayer’s gross receipts.  The Taxpayer explained that he read the MTC, but did not understand the footnotes where it indicated that the MTC was not recognized in New Mexico for the sale of services.  He also said that he relied on Oasis’ representations that this was the correct tax document for New Mexico.  The Hearing Officer found that the MTC was not appropriate and the Taxpayer was correctly assessed by the Department.  The Taxpayer’s protest was denied.