On October 31, 2014, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax periods from January 1, 2008 through December 31, 2008; January 1, 2009 through December 31, 2009, January 1, 2010 through December 31, 2010; and January 1, 2011 through December 31, 2011. On January 27, 2015, the Taxpayer filed a protest to the assessments. The Taxpayer was engaged in business in New Mexico during the tax years in question, providing maintenance and repair services to foreclosed and vacant properties for another company. The Department determined that the Taxpayer was a non-filer for gross receipts tax for those tax years. The Department began an audit of the Taxpayer and requested proof of any nontaxable transaction certificates (NTTCs) by October 7, 2014. The Taxpayer produced a properly executed and timely NTTC for services. The Department rejected the NTTC because there was white correction fluid visible on it. The Taxpayer explained that the NTTC was issued to him in that condition. The Taxpayer contacted the buyer who issued the NTTC, and the buyer provided a letter to the Taxpayer confirming that the NTTC had been issued to the Taxpayer in 2008. The Department also contacted the buyer and was given the same confirmation, along with an explanation that when the buyer filled out the NTTC, she made an error on the Taxpayers address and added the correction fluid to fix that error. The Department refused to accept the NTTC and assessed the Taxpayer. There was no dispute as to the Taxpayers receipts were deductible, the issue was the execution of the NTTC. The Department issued that it was not properly executed because it had been altered. The Hearing Officer found that the correction fluid did not invalidate the proper execution of the NTTC in this situation. The Taxpayers protest was granted.
Joseph and Carmen Garcia