All Medical Personnel Inc.

17-35

On May 5, 2016, the Department issued an assessment for gross receipts tax, penalty, and interest for the periods starting March 31, 2009 and ending September 30, 2015. The Taxpayer filed a timely protest of the assessment on July 27, 2016. The Taxpayer is a staffing agency that specializes in finding and recruiting medical professionals and then facilitates the staffing and payment of those medical professionals. The Taxpayer argued that they do not owe gross receipts tax to the state because it is a joint employer with businesses in New Mexico, has no physical presence, office, or staff in New Mexico. Third, the Taxpayer argues that based on Public Law 86-272 under 15 USCS Section 381 it believes that it has de minimus activities in New Mexico. Lastly, the Taxpayer argues that even if it was subject to tax it would be able to claim a healthcare deduction. The Department argues that gross receipts tax is due for the service that is being provided and the employees that the Taxpayer has working in New Mexico. Based on the service agreement that was provided at the time of the hearing, it was clear that the Taxpayer was an independent contractor responsible for locating employees, paying the employees, making sure that the employees had benefits, collection of any tax based withholdings, and workers compensation insurance. It was specified that the Taxpayer does not lease employees. However, the Taxpayer was being paid for the employee services and not the worker directly. The Taxpayer argued that based on the work that is performed that it is able to claim a deduction that applies to medical. The Hearing Officer determined that the Taxpayer does not fit the qualifications of the deduction mentioned. The Hearing Officer did bring up that a certain part of the assessment was beyond the statute of limitations. The Department noted that when the audit was completed it was only for January 2010 forward. The Hearing Officer determined that the Taxpayer is subject to gross receipts tax in New Mexico. The Taxpayer provides a service and employees workers who work in facilities in New Mexico. The Taxpayer also benefits monetarily for that exchange of service. The Hearing Officer ordered that the assessed reporting periods March 31, 2009 through November 30, 2009 be stricken from the assessment as they were found to be beyond the statute of limitation. It was further ordered, the amount of the assessment which resulted from the audit be carefully reviewed and anything from the 2009 periods mentioned above to make sure that any of that liability is removed from the amount due. The Department is then to provide the Taxpayer with a statement of account for current outstanding liabilities and update all interest calculation. When the information is provided to the Taxpayer they are to pay the updated gross receipts tax, penalty, and interest. For the reasons listed above, the Taxpayers’ protest is partially granted and is partially denied.