The Taxpayer is a limited liability company created in 2006 as a small northern New Mexico female-owned business to facilitate bidding on a prospective contact with Los Alamos National Security (LANS). Taxpayer decided to partner with a company having a current contract with LANS in order to position itself to be awarded the prospective bid as an incumbent. Due to the company financial issues, Taxpayer purchased the stock and subsequently purchased all of assets of the company including its one valuable asset, the current contract that the company had with LANS. At the time of the purchase, the Taxpayer was aware that this other company had a tax debt with the Department. The Taxpayer was not awarded the new LANS contract. On April 2, 2009, the Department assessed Taxpayer for unpaid gross receipts tax, plus interest, as a successor in business to the other company. Penalty was not assessed. The Taxpayer filed a written protest to the assessment. The two issues to be decided at hearing were whether the Taxpayer was liable as a successor in business for gross receipts originally assessed to the other company, and whether the Taxpayer’s liability would be limited to the amount paid in the purchase agreement. Based on all eight factors set forth in Regulation 184.108.40.206(A) NMAC, the Taxpayer was determined to be a successor in business. Additionally, the amount the Taxpayer paid to acquire the company exceeds the amount of the assessment, so the Taxpayer is liable for the entire amount. The Taxpayer’s protest was denied.
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