Sharon Ray



On September 2, 2014, the Department issued four assessments to the Taxpayer for gross receipts tax, penalty and interest for the tax years ending December 31, 2008, 2009, 2010 and 2011.  The Taxpayer filed a protest to the assessments on October 22, 2014.  The Taxpayer was audited through the Department’s Schedule C tapematch program with the Internal Revenue Service.  It was found that the Taxpayer reported business income for the years in question, for which she received a 1099, and she was not registered for gross receipts tax purposes in New Mexico.  During the taxable years at issue, the Taxpayer was an associate for a “down the line” sales organization.  The Taxpayer received compensation for recruiting and enrolling New Mexico customers and if the customer purchased product.  The Taxpayer’s commission was based on 10% of the product amount.  The Taxpayer received commissions from the company, and commissions are subject to the gross receipts tax.  The Taxpayer testified that the compensation she received was not from commissions, and also that she hired a CPA to prepare her income tax returns, and that the CPA did not advise her to register and file gross receipts tax returns.  The Hearing Officer found that the Taxpayer was correctly assessed for gross receipts tax, penalty and interest.  The Taxpayer’s protest was denied.