S.J. Tile

16-50

On February 23, 2016, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax period from January 1, 2012 through December 31, 2012.  The Taxpayer filed a protest to the assessment on May 20, 2016.  On March 21, 2016, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax periods from January 1, 2010 through December 31, 2011.  The Taxpayer filed a protest to that assessment on June 16, 2016.  On July 29, 2016, a telephonic scheduling hearing occurred and the Taxpayer’s protests were consolidated.  The Taxpayer was in business from 1987 through 2012, and was a one-person operation in the business of tile setting.  Beginning in 2008, the Taxpayer only worked for construction contractors and did not collect or pay gross receipts tax.   The Taxpayer did not produce any nontaxable transaction certificates (NTTCs) from the construction contractors that he provided services to during the periods at issue.  The Taxpayer argued that he did not collect gross receipts tax and that the contractors he worked for paid the taxes.  The Taxpayer has been diabetic for the past twenty-two years.  He also became disabled and no longer works.  The Taxpayer suffers from kidney failure and blindness.  The issue to be determined is whether the Department properly assessed the Taxpayer for gross receipts tax, penalty and interest for the periods at issue.  New Mexico has a self-reporting tax system and it is the obligation of the Taxpayer to obtain and retain the necessary NTTCs, as well as file any necessary gross receipts taxes.  Because the Taxpayer failed to obtain the necessary NTTCs necessary to claim a deduction, the gross receipts tax, along with the mandatory interest, were found to be properly assessed.    In spite of his health problems, the Taxpayer was not able to prove that he was non-negligent in not filing gross receipts taxes, so the penalty was deemed to have been properly assessed as well.  The Taxpayer’s protest was denied.