Gregory and Shirley Hale

01-02

Taxpayer protested the assessment of gross receipts tax on the basis that he had moved to New Mexico from California and was a mechanic who should not be expected to understand the nuances of how taxes apply in New Mexico. The Taxpayer also argued that since he paid passed on gross receipts tax when he purchased parts he used in repairing vehicles, he should not have to pay tax again when he is paid for performing repairs. Taxpayer also argued that he should be entitled to claim a deduction for his receipts based upon an NTTC which was not in his possession within the sixty days provided by Section 7-9-43(A). Finally, Taxpayer argued that he was financially unable to pay the assessment. Taxpayer’s protest was denied. Every taxpayer is under the reasonable duty to understand the tax consequences of his actions, either by his own efforts or by consulting a tax professional to advise him. The fact that the parts vendors paid tax on the parts the Taxpayer purchased does not relieve the Taxpayer of paying tax on his receipts. There are two separate transactions and two separate taxpayers.  If the Taxpayer had registered with the Department to pay gross receipts tax he could have obtained NTTC’s to issue to the parts vendors to avoid the pyramiding of tax. The Taxpayer’s failure to obtain an NTTC from his customer within 60 days after being given notice by the Department prevents the Department from honoring the NTTC which was later produced. Finally, the financial inability to pay tax is not a defense to the assessment of tax.