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Driscoll Woodworking



The Taxpayer, a woodworker, was an independent contractor for an Arizona company that acted as a general contractor on a construction project in New Mexico. The Taxpayer was not aware that services as an independent contractor are subject to the New Mexico gross receipts tax, and he failed to report or pay tax on this income. He did not ask for or receive a nontaxable transaction certificate (NTTC) from his customer. The Department audited the Taxpayer and notified him that he had 60 days to obtain possession of the NTTCs needed to support his deductions. The Taxpayer made several attempts to obtain an NTTC from the Arizona contractor, but was unsuccessful. The Department subsequently assessed the Taxpayer for gross receipts tax, penalty and interest. The Taxpayer protested the assessment, arguing that his services were sold for resale, and that his failure to produce an NTTC from the Arizona contractor was due to circumstances beyond his control. Held: The fact that the Taxpayer sold his services for resale is not sufficient to support a deduction in the absence of the NTTC required by statute.  New Mexico law states that if a taxpayer is not in possession of NTTCs within the 60-day notice period, the taxpayer’s deductions “shall be disallowed.” The responsibility for obtaining NTTCs is on the seller and not the buyer. The fact that the Arizona contractor would not cooperate with the Taxpayer does not excuse the Taxpayer for his failure to produce the required NTTC.  Protest denied.