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Par Five Energy Services, LLC



On June 3, 2016, the Department issued a partial denial for the Taxpayer’s application for the high wage jobs tax credit. The Taxpayer filed a formal protest with the Department on June 20, 2016. The application was for periods starting January 10, 2011 and ending July 8, 2015. The Department’s partial denial included the denial of six employees over seven qualifying periods due to the employees being placed in existing empty positions, one employee over two qualifying periods due to an in house promotion with no outside advertisement of the position, and three employees that were determined not to be New Mexico residents. During the hearing, most of the facts presented in the case were undisputed. The Taxpayer argued that there are no written rules or regulations detailing the review process of the credit. The Department argued that its analyses were an appropriate interpretation of the statute and that published rule or regulations are not required. The Hearing Officer determined that the Department’s method for evaluating the jobs was reasonable. It was determined that the statute requires that qualified employees are hired into new jobs. Therefore, the replacements did not satisfy the statutory requirements for a new job. In the case of the in house promotion, the Taxpayer argued that the Department cannot restrict how an employer fills a job and that there is no requirement that the job must be publicly posted in statute. The Hearing Officer determined that the requirement by statute was that a new job was created, a fact that was not disputed by the Taxpayer or the Department, for that reason the new job in question in relation to the in house promotion was determined to be eligible for the credit. The last three positions in question were denied based on the employee’s residency. At the time of the hearing, two of those positions were no longer disputed. The Department argued that based on its database it shows that the employee was not a resident of New Mexico. The Taxpayer argued that there is sufficient evidence to establish that the employee was a resident of New Mexico. The Taxpayer provided tax documents from before and during the qualifying periods that show that the employee has an address in New Mexico. The Hearing Officer determined that the evidence provided by the Taxpayer was enough to show that the employee was a resident of New Mexico and therefore the Taxpayer was entitled to the credit on this employee. For the foregoing reasons, the Taxpayer’s protest was denied in part and granted in part.