J.W. Jones Mechanical Contractors, Inc.

02-18

The Taxpayer is engaged in the construction business in New Mexico.  In March 1998, the Department audited the Taxpayer and delivered a “60-day letter” notifying the Taxpayer that it must have possession of all NTTCs needed to support its deductions within 60 days or the deductions would be disallowed. At the expiration of the 60-day period, the Taxpayer still had not provided NTTCs from several general contractors.  After the 60-day deadline had passed, the auditor received NTTCs from two contractors, but refused to accept them because they were not in the Taxpayer’s possession within the 60-day period required by statute. In October 2000, the Department assessed the Taxpayer for gross receipts tax, penalty and interest. The Taxpayer protested the assessment, arguing that there were extenuating circumstances to consider, and that it should not be required to pay gross receipts tax it had never collected from its customers. Held: Timely possession of NTTCs is mandatory and cannot be waived based on the Taxpayer’s lack of knowledge or other extenuating circumstances.  At the administrative hearing, the Taxpayer introduced sufficient evidence to support its deduction of receipts from one general contractor, but did not meet its burden of proving that receipts from the remaining construction projects were not subject to tax. Protest granted in part and denied in part.