Gutierrez Aggregate Systems LLC

16-40

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.  On May 2, 2016, the Taxpayer filed a protest.  In 2012, the Taxpayer was engaged in business in New Mexico as a provider of construction services and materials.  The Taxpayer served as a subcontractor for another business during that time.  On November 21, 2015, the Department issued a notice of audit to the Taxpayer.  On that notice the Taxpayer was advised of its responsibility to obtain any necessary nontaxable transaction certificates (NTTCs) within 60 days of the letter.  The deadline for NTTCs was January 20, 2016.  The Taxpayer contacted the owner of the business for whom it was a subcontractor and requested an NTTC.  The owner assured the Taxpayer that it would give it an NTTC.  After repeated calls from the Taxpayer, the business executed the NTTC to the Taxpayer on March 15, 2016, almost two months after the deadline.  The Taxpayer argued that it was not at fault for the NTTC, and also that it was unfair to require it to pay taxes years later now that it is out of business.  The Department argued that the Taxpayer has the responsibility of obtaining NTTCs at the time of the transaction, but is then granted the 60 days by statute.  Section 7-9-43(A) NMSA 1978 also states that when a taxpayer is not in possession of the required NTTCs by the deadline then all claimed deductions requiring the NTTC shall be disallowed.  The Taxpayer also argued that it should not have to pay penalty, however it is the Taxpayer’s responsibility to obtain NTTCs at the time of the transaction and when this does not occur the deduction should not be taken.  The Taxpayer’s protest was denied.