Roswell Lumber Co.



The Taxpayer operates retail businesses in New Mexico, selling building materials. Following a field audit, the Department assessed the Taxpayer for gross receipts tax, penalty and interest on receipts from the sale of construction materials for which the Taxpayer had accepted Type 9 NTTCs. The Taxpayer protested the assessment, arguing: 1) he was entitled to accept Type 9 NTTCs on sales of construction materials because the materials could be used for repairs as well as for new construction; 2) the Taxpayer was entitled to accept Type 9 NTTCs as conclusive proof that he was entitled to the deductions taken; and 3) requiring the Taxpayer to reject Type 9 NTTCs would create a hardship on the Taxpayer because government and nonprofit entities believe they are tax exempt and refuse to pay gross receipts tax on their purchases. Held: 1) repair work is included in the statutory definition of construction, and sales of materials to be used for this purpose do not qualify for the deductions provided in Sections 7-9-54 and 7-9-60 NMSA 1978; 2) the Taxpayer is not entitled to rely on NTTCs that do not apply to the transactions at issue; 3) the Taxpayer cannot be excused from compliance with the state’s tax laws simply because its customers do not understand the law.  Protest denied.