Bed Bath & Beyond, Inc.



On November 26, 2013, the Taxpayer filed a claim for refund of penalty paid on gross receipts taxes from September and October 2011.  On June 20, 2014, the Department denied the claim for refund.  On July 8, 2014, the Taxpayer filed a protest to the denial.  The Taxpayer began filing its CRS returns electronically, and pay electronically, in September and October 2011.  The Taxpayer entered a number incorrectly in setting up its electronic payments, which resulted in the payments failing to go through for September and October 2011.  The Taxpayer became aware of the problem, corrected it, and successfully submitted late payments for September and October 2011.  The Department assessed the Taxpayer for penalty and interest for these late payments.  In exchanges with the Department regarding this issue, the Taxpayer became aware that notices were mailed to the them by the Department that were addressed to the attention of their payroll department.  The Taxpayer informed the Department that this was incorrect, and that they did not receive this correspondence because it was routed to their outside payroll company.  The Taxpayer paid the assessment but, on June 25, 2012, submitted an application for refund with regard to the penalty.  This application included the Taxpayer’s address and the name of a contact person.  Nowhere did the application refer to or list their payroll department as a contact.  On July 2, 2012, the Department issued a denial of refund, which was again mailed to the payroll department and not received by the Taxpayer.  The Taxpayer began checking on the claim for refund and, when it learned of the denial, it filed a protest on October 10, 2013.  On October 28, 2013, the Department issued a denial of the protest because it was made more than the maximum of 90 days from the date of the denial on July 2, 2012.   The Taxpayer refiled its claim for refund on November 26, 2013, and that claim was denied on June 20, 2014.  The issues to be decided are whether the Department’s denial of the refund on July 2, 2012 was effective and barred the Taxpayer’s subsequent refiling of the claim, and if the denial was not effective, whether the Taxpayer’s claim for refund was properly denied.  The Hearing Officer found that the denial of the refund was not effective, as it was sent to the attention of the wrong department, and the Taxpayer was able to show that the correct address was provided on their forms.  As to the issue of the actual claim for refund, Section 7-1-69 NMSA 1978 provides that penalty shall be assessed when tax is not paid on time due to negligence.  The Taxpayer argued that it was not negligent because it made an honest mistake when it set up electronic payments.  Negligence includes inadvertence, and the refund was properly denied. The Taxpayer’s protest was denied.