New Mexico State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in New Mexico, with full citations and the original source on every page.
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Did a construction NTTC protect crane-and-operator receipts when the project manager, rather than the subcontractor that issued the NTTC, paid the invoice?
Yes. US Field Service timely accepted a properly executed construction NTTC in good faith from the wind-power subcontractor that bought its crane-and-operator services. The project manager's payment o…
Which receipts from ATC Healthcare's New Mexico staffing franchise were taxable: payroll collections, franchise royalties, and administrative services?
ATC's payroll and client collections were taxable because it was the legal employer and failed New Mexico's disclosed-agency test. Pre-June 27, 2007 franchise royalties were abated under then-controll…
Could Good Karma reduce a gross receipts tax assessment by documenting out-of-state services and periods beyond the limitations period?
Yes, in part. Good Karma supplied documents showing that two companies' Form 1099 payments covered services performed outside New Mexico, and the Department also conceded that part of the assessment w…
Could a New Mexico freelance editor avoid a $276.96 negligence penalty because her longtime New York CPA never advised her about gross receipts tax?
No. Emily Metzloff owed gross receipts tax on editing services performed in New Mexico for out-of-state internet clients. Her New York CPA prepared only her income-tax returns, never discussed New Mex…
Could S.J. Tile avoid 2010-2012 gross receipts tax without NTTCs by arguing that its construction-contractor customers paid the tax?
No. S.J. Tile produced no NTTCs for its 2010-2012 tile-setting receipts and no specific evidence that construction contractors paid gross receipts tax on its behalf, so equitable recoupment and double…
Are the franchise royalty fees I collect from my New Mexico franchisees taxable, or is the trademark-license part of the fee exempt from gross receipts tax?
They are taxable, and the franchisor lost. A & W Restaurants, Inc. licenses New Mexico franchisees to run A&W restaurants and collects a continuing royalty fee (5% of gross sales) plus an advertising …
Could a paid family caregiver deduct independent-contractor receipts without an NTTC because the healthcare company said it paid gross receipts tax?
No. Anthony Martinez was an independent contractor paid to care for his grandfather, so his receipts were taxable. The healthcare company refused to issue an NTTC, and Martinez produced no proof that …
Could a tile installer deduct resale-service receipts using an incomplete Type 2 NTTC and a correct Type 5 NTTC obtained after the 60-day audit deadline?
No. Hector Martinez's Type 2 NTTC was the wrong series and was incomplete, while his correct Type 5 NTTC was executed after the mandatory 60-day audit deadline. The AHO upheld $28,268.57 tax and $3,96…
Did timely Type 6 construction NTTCs protect architectural design-build receipts when the pre-2012 transactions technically required Type 5 resale certificates?
Yes. SMPC's architectural services were resold by general contractors in taxable design-build contracts, so the transactions qualified for the service-for-resale deduction. Although the pre-2012 work …
Did third-party lenders' financing of car dealerships' software licenses relieve the software seller of New Mexico gross receipts tax?
No. Market Scan sold taxable software licenses directly to customers, while its recommended lenders made separate financing loans that they were free to decline. Market Scan did not prove that the len…
Could a contractor recover gross receipts tax on depreciable equipment and systems incorporated into a county-owned fire station?
No. Weil Construction's remaining claimed equipment, piping, cabling, electrical systems, signage, and other items were incorporated into a county fire-station project, making them taxable constructio…
Was a painter exempt as an employee when he received Forms 1099 and lacked evidence of withholding, benefits, or employer control?
No. Luis Fernandez did not prove employee status; the company issued Forms 1099, and there was no evidence of withholding, FICA, workers' compensation, unemployment coverage, or control over his paint…
Could a construction subcontractor use an NTTC obtained almost two months after the audit deadline when the buyer caused the delay?
No. Gutierrez Aggregate repeatedly asked its customer for an NTTC, but the buyer did not obtain and execute the certificate until March 15, 2016, almost two months after the January 20 deadline. The m…
Were two Albuquerque homes rented for three-to-seven-day VRBO stays exempt as leases of three or fewer real-property units?
No. Tiller Design regularly advertised two homes for short stays with check-in and checkout dates, guest limits, amenities, maintenance help, and no transfer of exclusive property rights. The AHO trea…
Were a sole proprietor's reimbursed bills, surveying pay, and year-long equipment rentals excluded from New Mexico gross receipts tax?
No. Professional Services Company did not prove it received TKG funds as a disclosed agent or separately billed reimbursements. It also did not prove employee status for surveying work, and $26,567.75…
Did a Chapter 7 discharge eliminate a sole proprietor's New Mexico gross receipts tax debt when he did not prove timely returns or the federal timing requirements?
No. General Design and Construct abandoned its NTTC arguments at the hearing and relied only on a Chapter 7 discharge. It supplied no evidence addressing the federal timing exceptions and did not prov…
Did Type 5 and Type 6 NTTCs protect retail-store installation receipts when one certificate omitted the seller name and the service provider lacked a contractor license?
Yes, for three customers. Capacity Builders' complete Type 5 certificate supported service-for-resale receipts; an incomplete Type 5 certificate was accepted in good faith after timely submission; and…
Was a 2016 assessment of 2011-2012 construction receipts timely when the contractor underreported gross receipts tax by more than 25%?
Yes. Kinsey Construction reported far less on its New Mexico CRS returns than on federal Schedule C, with discrepancies exceeding 25% in both 2011 and 2012. That triggered the six-year assessment peri…
Were a New Mexico USANA associate's downline sales commissions deductible because the Utah company's underlying product sales lacked New Mexico nexus?
No. USANA products were delivered and consumed in New Mexico, and its local associates and distributors established and maintained the company's market, creating substantial nexus under the law applie…
Are voluntary tip-jar payments to a Santa Fe Plaza street musician subject to New Mexico gross receipts tax?
No. Roark Barron operated Luscous Music as a business and properly paid tax on $10 compact-disc sales, but Plaza listeners had no obligation to pay for his street performances. Their voluntary tip-jar…
Did a Type 9 government NTTC exempt DNA and drug-testing services sold to New Mexico's Children, Youth and Families Department?
No. Mobile Blood Services sold laboratory testing services to CYFD, while the Type 9 NTTC CYFD issued covered tangible personal property rather than government purchases of services. The tax and inter…
A serious illness caused me to fall behind on my gross receipts tax filings — can New Mexico waive the negligence penalty for a medical hardship?
No — the penalty stood, and the protest was denied. M & M Stores, Inc. runs three Albuquerque gas-station convenience stores; its manager and accountant, Murad Hijazi, handles its monthly gross receip…
Could MANS Construction obtain a gross receipts tax refund after it mistakenly included separately stated tax in reported receipts?
Yes, in part. MANS Construction proved that an October 2012 White Sands billing included $66,407.66 of separately stated gross receipts tax that it mistakenly left in reported receipts. The AHO ordere…
Could a tile subcontractor deduct 2008-2009 receipts using an NTTC submitted more than three years after the 60-day audit deadline?
No. S.J. Tile could deduct construction receipts supported by timely NTTCs, but the TAJ Construction certificate arrived more than three years after the July 6, 2012 deadline and could not be consider…
Could self-employed contractor Jimmy Stuart have New Mexico penalty and interest removed because paying them would cause financial hardship?
No. Jimmy Stuart admitted the tax but sought relief from penalty and interest because of financial hardship. Interest was mandatory, and his failure to investigate and report CRS taxes was negligence.…
Did a later Department review and partial abatement reopen Robert Hooper's expired 90-day deadline to protest gross receipts tax assessments?
No. Robert Hooper did not protest three February 9, 2015 assessments by the May 11 deadline. The Department's later review of additional documents and partial 2011 abatement did not restart the mandat…
Was Reggie Olguin's assessment protest timely when he mailed it before the deadline but used the wrong Department address and it was never received?
No. Reggie Olguin prepared and mailed a protest before the January 25, 2016 deadline, but he transposed the Department's street and post-office-box information. The Department never received the impro…
Was Linda Wasko's Type 5 NTTC untimely when it was executed one day after the deadline printed on the Department's audit notice?
Not proven. Linda Wasko obtained the correct Type 5 NTTC on August 26, 2015, one day after the deadline printed on an audit notice dated June 26. But credible testimony showed the notice might not hav…
Were Bogle Management's farm-management fees and payroll reimbursements excluded from New Mexico gross receipts as receipts of a disclosed agent?
No. Bogle Management was doing business in New Mexico through managers it supplied to two farms. Its management fees belonged to Bogle, and its payroll reimbursements were not excluded because it did …
Could for-profit hospital HealthSouth use New Mexico's managed-care health-service gross receipts deduction despite regulations excluding hospitals?
Yes. Section 7-9-93 limited the source and nature of deductible managed-care payments, but did not restrict which taxpayer could claim them. The AHO held that regulations excluding hospitals added a l…
Did Mountain Liquors become liable as a successor when it took a defaulting tenant's inventory and continued the same grocery, liquor, and deli business?
Yes, for tax only. Mountain Liquors took Trail House Enterprises' grocery and liquor inventory after lease default, continued the same store and deli at the same property, used existing signage, and p…
Did Sol Bookkeeping become a successor to a related accounting firm when it retained shared software, employees, goodwill, and some former clients?
Yes. The two companies had operated simultaneously and separately, but after the older accounting firm closed, Sol retained shared billing software, kept employees associated with both businesses, ser…
Could an auto restorer deduct services sold to dealerships for resale, or rely on dealer-issued NTTCs, when the vehicles were later subject to motor vehicle excise tax?
No. The service-for-resale deduction required the dealership's resale to be subject to gross receipts tax, but vehicle sales were instead exempt and subject to motor vehicle excise tax. Hubbard Lovell…
Could Pete's Landscaping deduct firewood sold to restaurants that used it for cooking or heat when Department employees approved Type 2 NTTCs?
Yes, for the restaurant sales backed by timely, properly executed Type 2 NTTCs. Pete's Landscaping knew the restaurants used rather than resold the firewood, but it accepted the certificates only afte…
Were Video Factory's recorded and edited presentations delivered on DVDs to the State Bar tangible personal property covered by its nonprofit NTTC?
Yes. The State Bar paid only when Video Factory delivered completed movies on DVDs, and the recording and minimal editing had no independent value without that physical product. The AHO treated the fi…
Were Love Tree Builders' cash receipts from Minnesota storm cleanup subject to New Mexico gross receipts tax because they appeared on the owner's federal Schedule C?
No. A Schedule C match showed $24,201 not reported on New Mexico CRS returns, but Love Tree Builders credibly proved the cash came from emergency cleanup and repair services performed in Minnesota aft…
Could new real estate appraiser Ricardo Romero avoid penalty because he did not know he had to file CRS returns and pay gross receipts tax?
No. Ricardo Romero began a real estate appraisal sole proprietorship in 2012 but did not consult a tax professional or Department employee about CRS duties, file returns, or pay gross receipts tax tha…
Did Frank's Electric avoid negligence penalties by voluntarily finding and correcting gross receipts and withholding underpayments caused by its accounting system?
No. Frank's Electric hired a new bookkeeper who found that its accountant-developed system had underreported gross receipts and withholding tax, and the company voluntarily amended the returns. But in…
Could locksmith That’s the Key avoid penalty and interest because it honestly believed re-keying receipts from Fannie Mae and Freddie Mac were tax-exempt?
No. That's the Key conceded and paid gross receipts tax on re-keying services for Fannie Mae and Freddie Mac but sought removal of penalty and interest. Its belief that the entities were exempt was ho…
Was a medically supervised protein powder prescribed by a doctor of oriental medicine a prescription drug deductible from New Mexico gross receipts?
No. The obesity-treatment protein powder was distributed through licensed medical professionals and required monitoring for ketoacidosis, but its ingredients were food substances and it could legally …
Could Sandia Development deduct construction materials sold to LANL when it had letters referring to an NTTC but obtained the actual Type 6 certificate after the audit deadline?
No. Sandia Development had emails and a letter suggesting LANL intended to furnish an NTTC, but neither party could produce a timely executed certificate and the NTTC database showed only a Type 6 cer…
Did a nine-year delay in referring Precision Eye Center's protest eliminate or reduce interest after the parties agreed the original tax assessment was too high?
No additional interest relief was available for delay. The parties agreed that NTTC-backed receipts, insurance payments, postage reimbursements, credits, and a 2005 eyeglass deduction substantially re…
Did Archaeological Support Services owe two $5 late-filing penalties when it mailed zero-liability CRS returns in envelopes shared with another business?
Only one. Archaeological Support Services had no taxable receipts but kept its CRS number and mailed quarterly zero returns in the same envelopes as the owner's wife's business returns. Because the De…
Were a public-school employee's 1099 payments for gym monitoring and one annual student trip taxable independent-contractor business receipts?
No. Larry Gonzales monitored Albuquerque Public Schools gym use at his principal's direction to protect school property, so the AYBL payments were wages for activity within his APS employment despite …
Could Family Workshop deduct Medicaid counseling payments because an insurer subsidiary acted like a managed-care organization, and were older assessments time-barred?
No deduction applied. Section 7-9-93 expressly excluded services to Medicaid patients from “commercial contract services,” regardless of whether the paying subsidiary was a managed-care provider. Fami…
Could Santa Fe Baking avoid negligence penalties after its office manager omitted 33 months of gross receipts tax while continuing to file and pay withholding tax?
No. Santa Fe Baking's office manager omitted the gross receipts portion of CRS returns for 33 months while continuing to file and pay withholding tax. The AHO held that Department system silence was n…
Could Denise Thomas deduct property-inspection receipts using a Type 2 NTTC received about two months after the Department's 60-day deadline?
No. Thomas performed taxable property-inspection services and did not possess an NTTC by the Department's May 12, 2015 deadline. The buyer delivered a Type 2 NTTC in August, about two months late. Sec…
Was Brent's HVAC & Plumbing a successor to an owner's failed air-conditioning corporation, and did it owe the corporation's full tax assessment?
Brent's was a successor because essentially all unrepossessed equipment from the failed air-conditioning corporation was transferred outside its ordinary business. But Brent's primarily served homeown…
Could an independent hunting guide deduct payments with an NTTC executed after the 60-day audit deadline when a Department employee failed to respond before time expired?
The deduction failed, but penalty was abated. Burton Buchan was an independent hunting guide, not the outfitter's employee. Flat Landers did not obtain an NTTC by the April 1, 2015 deadline, and the l…
Were Medicaid room-and-board payments excluded from Star Hospice's gross receipts when it passed the funds to nursing homes that actually provided the room and board?
No exclusion applied. Medicaid paid Star Hospice 95% of the nursing-facility room-and-board rate, and Star contractually paid the homes 100%. Although the homes provided room and board, Star's contrac…
Could Saiz Trucking deduct dirt, gravel, hauling, and grading receipts from Albuquerque park projects as government sales, and which audit periods remained timely?
The City receipts were taxable because Saiz provided and installed dirt and gravel while building or altering parks, ballfields, and similar facilities. Government sales of tangible property could be …
Could Bed Bath & Beyond refile a penalty-refund claim after the Department mailed its first denial to the wrong internal department, and did its electronic-payment mistake justify a refund?
Bed Bath & Beyond could refile because the first denial was sent “ATTN Payro” even after it told the Department to use its Tax Department and named a refund contact; the misaddressed notice was ineffe…
Were James Szenasi's resale NTTCs timely when he received the audit letter on its printed deadline after an unexpectedly extended trip and obtained certificates days later?
Yes. Szenasi arranged a mail hold before traveling, unexpectedly extended his trip for a Washington course, returned August 25, and collected the audit letter on August 26—the deadline printed in it. …
Was Francis Brown a church employee exempt from gross receipts tax when he was paid hourly to oversee construction and restoration projects?
No employee exemption applied. The church paid Brown hourly and its priest selected projects and sometimes workers, but it withheld no tax, paid no employment benefits, issued Brown Forms 1099 while i…
Could Strategic Consulting recover 2006-2008 gross receipts tax in 2014 by relying on oral Department advice that out-of-state consulting receipts were taxable?
No. Strategic Consulting filed its $5,693.42 refund claim on October 28, 2014 for 2006 through March 2008 payments. Even the last period's claim was due by December 31, 2011, so the Department lacked …
Were Santa Fe Tow and Emergency Lock & Key acting as AAA's disclosed agents when AAA paid them fixed rates for roadside services to its members?
No. AAA imposed extensive branding, dispatch, background-check, and service-quality requirements, but written contracts expressly called the businesses independent contractors, denied agency, and gave…
Could Harold's Grading preserve an assessment protest postmarked one day after the 90-day deadline because a Department employee initially said “yes” to a January 31 date?
No. The Department served the October 30, 2014 assessment on October 31, making January 29, 2015 the 90th day. Harold's protest was postmarked January 30 and was one day late, depriving the Department…
Did a Multistate Tax Commission certificate protect Caleb Dutton's New Mexico diesel-repair receipts when the buyer resold the services and parts?
No. Dutton timely accepted the multistate certificate in good faith after asking Oasis for New Mexico tax documents, but New Mexico recognized MTC certificates as NTTCs only for sales of tangible pers…
Could CSW deduct pond-liner sales to an industrial-revenue-bond project as government sales after buying the liners tax-free with a Type 6 construction-material NTTC?
No. CSW bought the pond liners tax-free using a Type 6 NTTC, which identified them as construction material intended to become an ingredient or component of Intrepid's solar solution mine project. Sec…
Could Magnum Builders avoid negligence penalty by relying on accountants who believed later audit-document extensions also extended the expired 60-day NTTC deadline?
No. Magnum did not prioritize obtaining construction NTTCs when transactions occurred, despite its accountants' reminders. The Department hand-delivered a 60-day notice to Magnum's designated accounta…
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These are official tax letter rulings and advisory opinions issued by New Mexico's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.