Steve Ortiz

10-09

Taxpayer, a sole proprietorship, performed services for but did not obtain required nontaxable transaction certificates (NTTCs). As a result of the information-sharing program with the IRS, the Department conducted a limited scope audit of Taxpayer’s gross receipts tax for 2006 and advised him as to the necessity of possession of timely dated NTTCs to support his deductions or such  “deductions relating to the NTTCs will be disallowed.”  Taxpayer did not obtain the required NTTC’s by the deadline. The Department therefore disallowed the deductions and assessed the taxpayer for unpaid gross receipts tax, twenty percent penalty and ongoing interest.  The Taxpayer filed a protest to the assessments claiming he should be fined for obtaining the NTTC’s late but the tax, penalty and interest should be abated claiming the tax had already been paid by another and therefore it unfairly was double taxation. The hearing officer found that the Taxpayer was not entitled to the deductions based on not having the necessary NTTCs in possession by the allowed time period and the tax and interest were appropriate charges however the penalty was abated to ten percent based on the assessment being for 2006 taxes. 
 NOTE: The New Mexico Court of Appeals has overruled the 10% penalty issue mentioned in this decision.  (Case No. 30,932)