Malcolm Services, Inc.

02-14

The Taxpayer is a New Mexico corporation with a fiscal year ending July 31st. Section 7-2A-9.1 NMSA 1978 requires every taxpayer to make quarterly estimated payments during any taxable year in which the Taxpayer’s corporate income tax liability can reasonably be expected to be $5,000 or more. The Taxpayer did not make any estimated payments during the tax year ending July 31, 2000, although its liability for that year exceeded $5,000. In November 2000, the Department assessed the Taxpayer for penalty and interest due on the Taxpayer’s failure to make quarterly estimated payments. The Taxpayer protested the assessment, arguing that Regulation 3.4.9.10 NMAC excuses a corporation from the estimated payment requirement if its tax liability for the two preceding years was less than $6,000. Held: The Taxpayer’s reading of regulation 3.4.9.10 NMAC was incorrect. The Taxpayer was required to make quarterly estimated payments of corporate income tax during tax year 2000, and is liable for interest and penalty resulting from its failure to make such payments. Protest denied.