{"id":4161,"date":"2020-11-12T12:06:19","date_gmt":"2020-11-12T19:06:19","guid":{"rendered":"https:\/\/www.tax.newmexico.gov\/tax-professionals\/?p=4161"},"modified":"2020-11-12T12:06:20","modified_gmt":"2020-11-12T19:06:20","slug":"tiller-design","status":"publish","type":"post","link":"https:\/\/www.tax.newmexico.gov\/tax-professionals\/2020\/11\/12\/tiller-design\/","title":{"rendered":"Tiller Design"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_row _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_column _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221; type=&#8221;4_4&#8243;][et_pb_text _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<div class=\"blogDateTitleContainer\">\n<div class=\"blogDateTitle\">07\/21\/2016<\/div>\n<\/div>\n<div class=\"blogItem\">\n<p><a href=\"https:\/\/realfile.tax.newmexico.gov\/16-38_tiller-design.pdf\">16-38<\/a><\/p>\n<p><span>On November 3, 2015, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the CRS reporting periods between January 1, 2012 and December 31, 2012.\u00a0 On January 29, 2016, the Taxpayer protested the assessment.\u00a0 The Taxpayer is comprised of a married couple who have two homes in Albuquerque that they rented out to vacationers through Vacation Rental By Owner (VRBO.com)\/HomeAway\u00a0during the relevant period.\u00a0 The advertisement for the homes included a rental fee, cleaning fee and tax rate of 7%.\u00a0\u00a0 The advertisement also included a list of accommodations and facilities provided.\u00a0 The Taxpayer entered into rental agreements with the families renting the properties.\u00a0 These agreements specified check-in and check-out dates and times, cancelation fees, additional charges for damages or extra required cleaning, guest occupancy limits, prohibitions on smoking and pets, and other pertinent information.\u00a0 The rental agreements were silent on the Taxpayer\u2019s rights to enter the premise during the rental period, inspect the premise, or to otherwise cancel or terminate the agreement or take possession of the property.\u00a0 The renters were provided with a set of keys during the rental period, and the Taxpayers retained an additional set of keys.\u00a0 The Taxpayers assisted the families that rented the property with any issues that arose during their stay, such as internet service issues or other maintenance issues.\u00a0 The issue to be decided is whether the Taxpayer\u2019s short-term rental of two homes through VRBO.com are subject to gross receipts tax.\u00a0 The Taxpayer argued that Regulation 3.2.116.10\u00a0NMAC\u00a0applies, which states that a person with three or fewer rental units is not subject to tax.\u00a0 The Department argued that the Taxpayer was subject to gross receipts tax under Section 7-9-53(B)\u00a0NMSA\u00a01978 because rental of a vacation home is similar to hotels, motels and guest ranches and constitutes a license to use real property rather than a lease of real property.\u00a0 The hearing officer found that, due to the nature of vacation rentals, and considering the advertisement and rental agreements, this arrangement is a short-term license, rather than a lease.\u00a0 The regulation pointed to by the Taxpayer is not part of statute and has less legal standing than the statute which was determined to fit the situation at hand.\u00a0 The hearing officer found that the assessments of gross receipts tax and interest, which is non-discretionary, were correct.\u00a0 However, because the Taxpayer reasonably relied on Regulation 3.2.116.10\u00a0NMAC, penalty was ordered to be abated.\u00a0 The Taxpayer\u2019s protest was granted in part and denied in part.<\/span><\/p>\n<\/div>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;]<\/p>\n<p><a href=\"\/all-nm-taxes\/tax-decisions-orders\/\">Back to Tax Decisions &amp; Orders<\/a><\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>07\/21\/2016 16-38 On November 3, 2015, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the CRS reporting periods between January 1, 2012 and December 31, 2012.\u00a0 On January 29, 2016, the Taxpayer protested the assessment.\u00a0 The Taxpayer is comprised of a married couple who have two homes in Albuquerque that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"960","footnotes":""},"categories":[43],"tags":[],"class_list":["post-4161","post","type-post","status-publish","format-standard","hentry","category-tax-decisions-orders"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Tiller Design : Tax Professionals<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tax.newmexico.gov\/tax-professionals\/2020\/11\/12\/tiller-design\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tiller Design : Tax 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