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Fidel and Sadie Ann Avilucea



In 1998, the Taxpayers filed a claim for refund of personal income taxes paid during calendar years 1990 through 1993, based upon the fact that their income was earned while working as civilian employees for the Department of  Navy in Spain.  The Taxpayer’s argued that they were not residents, and were therefore not subject income tax on their income earned in Spain.  The Department denied the claim for refund based upon it being filed beyond the statute of limitation found at Section 7-1-26(C)(1) NMSA 1978.  Protest denied on the basis of the statute of limitations.  Even if the claim had not been time barred, the Taxpayer would not have been entitled to a refund.  This is because they maintained a home in New Mexico and always intended to return to New Mexico after their overseas tour of duty.  That establishes that they remained domiciliaries of New Mexico during the time they were in Spain.  Because New Mexico imposes an income tax on the income of all residents, regardless of where it is earned, and because “resident” is defined at Section 7-2-2(S) as a person domiciled in New Mexico, their income earned in Spain was subject to New Mexico personal income tax.