James Otero and Tanja Ford

13-31

The Taxpayers were engaged in business in New Mexico in 2005 and 2006 in a vehicle washing service.  The Department determined that the Taxpayers were non-filers for gross receipts tax for 2005 and 2006.  On May 25, 2010, the Department assessed the Taxpayers for gross receipts tax, penalty and interest.  On June 16, 2010, the Taxpayers filed a protest to the assessment.  The Taxpayers produced a properly executed and timely nontaxable transaction certificate issued to them by a truck rental company.  The truck rental company contracted with other truck companies to provide services and maintenance, including vehicle washing.  The buyer subcontracted the Taxpayers to provide vehicle washes on trucks that were too large to fit into the buyer’s wash bays.  The hearing officer found that the Taxpayers were entitled to deduct the gross receipts.  As they do not owe gross receipts tax, the penalty and interest do not apply, so the entire assessments were ordered to be abated.  The Taxpayers’ protest was granted.