On February 25, 2016, the Department sent an assessment letter to the Taxpayer for the reporting periods January 1, 2009 through December 31, 2011 for gross receipts tax (GRT), penalty, and interest. On April 21, 2016, the Taxpayer filed a timely formal protest with the Department. During the periods at issue, the Taxpayer was in business conducting indirect sales of goods and services. The Taxpayer purchased inventory for resale including equipment and accessories and sold services in the form of service agreements for third party. GRT was collected on the sale of goods and reported to the Department. However, the Taxpayer concluded that the money made on commission for the sale of service agreements for a third party was seen as income that was put back into the business and therefore not taxable under GRT. At the end of the year the Taxpayer received a Form-1099 Misc. with Box 7 indicating “non-employment compensation” for tax years 2009, 2010, and 2011. The Department issued a Notice of Limited Scope Audit for the tax years 2009, 2010, and 2011 as the result of a schedule C mismatch. It was discovered that the mismatch was due to the non-employee compensation from the third party company. The resolution of the audit resulted in the assessment letter being sent to the Taxpayer which is the subject of the protest letter. During the hearing, the Taxpayer mentioned another audit for the 2002 tax year which concluded January 26, 2006 which was also based on a schedule C mismatch. The Taxpayer remembered being satisfied with the result of the first audit but could not recall how the audit was resolved or the documentation that was submitted to the Department. After the audit the Taxpayer went back to operating the business the same way as before the audit and did not consult with a tax professional or the Department on the commission income. The Department was unable to locate any documentation in reference to the basis for the resolution of the audit concluding January 26, 2006. There was also nothing found in Department rulings specific to the Taxpayer or in statutes and regulations regarding commission as a non-employee not being taxable for gross receipts tax. The Taxpayer asserted that she believed based on the outcome of the audit for 2002 that she was reporting and paying her GRT correctly. It was decided in the hearing by talking with the Taxpayer that she was not an employee of the third party in which she received the non-employee compensation from for the periods at issue. Per Section 7-9-3.5 NMSA 1978, “gross receipts” includes the total commission and fees derived from selling services in New Mexico. The hearing officer determined that the Taxpayer was being compensated by commission as an independent contractor for the services of procuring service agreements. For that reason the non-employee compensation was taxable for gross receipts purposes and the income was not subject to any statutory deduction or exemption The Hearing Officer also determined that the Taxpayer did not provide evidence to establish non-negligence and therefore the penalty was assessed correctly. The Department also does not have statutory authority to abate interest and therefore the assessment of the interest is correct. For the reasons above the Taxpayer’s protest is denied.