Raven Wolf Communications

01-25

In 1994, the Taxpayer started business as a consulting astrologer. All of the Taxpayer’s clients are located outside New Mexico. From 1994 to 1998, the Taxpayer paid gross receipts tax on her receipts from providing services to out-of-state clients on advice from a Department employee. In February 1998, the Taxpayer stopped paying gross receipts tax on those services after consulting with several accountants. In June 2000, the Taxpayer submitted documentation to the Department to obtain a definitive answer on whether her receipts were taxable. The Department determined that the Taxpayer did not owe gross receipts tax on her receipts and was granted a refund for taxes paid for reporting periods December 1996 forward. In November 2000, the Taxpayer submitted a claim for refund of taxes paid for reporting periods March 1994 through November 1996 that the Department denied. The Taxpayer protested the denial by raising an estoppel argument, asserting the Department misled the Taxpayer into paying tax she did not owe. Held: The Taxpayer’s claim for refund is barred by the three-year limitations period set out in Section 7-1-26 NMSA 1978, and the Department is not estopped from asserting the statute of limitations as a bar to the Taxpayer’s claims. Protest denied.