On January 31, 2015, the Department mailed the Taxpayer a Notice of Limited Scope Audit commencement for tax years 2008 through 2011. The Taxpayer was audited through the Department’s Schedule C mismatch program with the Internal Revenue Service. It was found that the Taxpayer reported business income for the years in question, yet failed to register or file gross receipts tax for the years in question. During the taxable years at issue, the Taxpayer was an associate for a “down the line” sales organization. The Taxpayer received commissions from the company when customers purchased products, and commissions are subject to the gross receipts tax. The Taxpayer recruited customers in New Mexico who would make purchases from the company’s website using a code specific to the Taxpayer, and the company would ship the products to the customers from its headquarters in Utah. The Taxpayer also recruited distributors in New Mexico, who would then recruit customers. The Taxpayer also received a commission when the customers of the distributors she recruited made a purchase. On July 23, 2015, the Department issued four gross receipts tax assessments for principal, penalty and interest for the tax years 2008 through 2011. On October 21, 2015, the Taxpayer protested the assessments. For the tax years at issue, the Taxpayer received 1099s from the company. The company entered into a TS-22 agreement with the Department beginning in 2011, which was retroactively applied to the 2009 tax year. This agreement allows a taxpayer to pay gross receipts tax on behalf of another taxpayer. Per this agreement, the company charged and collected gross receipts taxes on the resale of its products by a New Mexico distributor on behalf of that distributor. In February 2011, the company stopped collecting gross receipts tax on the sale of its products to New Mexico customers because of advice from multiple Department employees that the company did not have sufficient nexus with New Mexico. The company has no employees in New Mexico, no offices, no ownership of inventory, and uses outside shipping companies to deliver products into New Mexico. The company did have independent contractors working in New Mexico to establish and maintain a market in New Mexico by recruiting and shepherding customers to purchase products through the company’s website. The Taxpayer believed that her commissions were not taxable pursuant to Section 7-9-66 NMSA 1978, because the underlying sales were not taxable. The hearing officer found that, due to its use of independent contractors in New Mexico, the company did have nexus and the underlying transactions were taxable, despite the incorrect information previously received from a few Department employees. As a result, the Taxpayer’s commissions received from the company were taxable as well. The hearing officer did order the penalty to be abated as the Taxpayer had reasonable grounds to believe that her commissions where not taxable because of statements made to her by the company as a result of their communications with the Department. The gross receipts tax principal and interest were correctly assessed. The Taxpayer’s protest was granted in part and denied in part.