Larry L. Cotton



In 1996, the Taxpayer worked as an independent contractor performing maintenance services. In April 2000, the Department assessed the Taxpayer gross receipts tax, penalty and interest on his 1996 business receipts. Taxpayer protested the assessment, arguing: 1) he did not have a business but only provided services; 2) he was purchasing materials as an agent for the company that hired him and should not be subject to the gross receipts tax on reimbursed expenses; and 3) imposing tax on the Taxpayer’s reimbursed expenses is in double taxation. Held: 1) the Taxpayer was engaging in business in New Mexico as defined in Section 7-9-3(E) NMSA 1978; 2) the Taxpayer bought materials on his own account and not as a disclosed agent; and 3) there is no legal prohibition against double taxation; in addition, there was no double taxation in this case. Protest denied.