The Taxpayer is an out of state corporation specializing in commercial vehicle leases. In 2000, the NM General Services Department (GSD) requested bids for the leasing of vehicles to the state. The bid specifically stated that other state agencies seeking vehicles under the contract must sublease those vehicles from GSD. GSD awarded the contract to the Taxpayer and provided the Taxpayer with a Type 9 NTTC. The NTTC was faxed to the Taxpayer as a single-sided document with the title: “09 Governmental Agencies and Organizations.” Nothing on the face of the NTTC indicated that its use was limited to the sale of tangible personal property or alerted the Taxpayer that there was additional information on the back. The Taxpayer was aware that New Mexico law provided a deduction for leasing vehicles for subsequent lease and accepted the NTTC as evidence that it did not owe gross receipts tax on its receipts under the contract with GSD. Upon audit, the Department disallowed the NTTC and assessed the Taxpayer for gross receipts tax, penalty and interest. At the hearing on the Taxpayer’s protest, the Department did not introduce any evidence to explain how the Taxpayer would have known that the Type 9 NTTC it accepted from GSD was limited to the purchase of tangible personal property. Based on the facts presented, the Hearing Officer found that the Taxpayer accepted the Type 9 NTTC in good faith and was entitled to claim the deduction provided in § 7-9-50. Protest granted.
Merchants Automotive Group, Inc.