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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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…
Did buying a Tennessee home and working mostly in Tanzania end a taxpayer's New Mexico domicile when his wife, primary U.S. visits, mail, and vehicles remained in New Mexico?
No. James Hellerman clearly intended Tennessee to be his home and worked mostly in Tanzania, but he did not prove that his established New Mexico domicile changed. His wife and valuable New Mexico hom…
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 Sonja Foote deduct cattle-breeding losses when seven of the nine federal profit-motive factors weighed against treating the ranch as a business?
No. Land and herd appreciation supported a profit motive, and startup losses were neutral, but seven factors weighed against the cattle operation. Foote showed no business plan, separate bank account,…
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 full-time state employee deduct cattle-operation losses when six federal profit-motive factors weighed against the ranch?
No. David Gonzales devoted substantial time to cattle and possible appreciation favored him, while drought-related losses were neutral, but six factors weighed against a profit motive. The AHO upheld …
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…
Could a building owner transfer part of a sustainable building tax credit after she had already claimed portions of the credit herself?
No. Kristin Ericksen could use the sustainable building credit or transfer the document granting it, and she could carry unused credit forward for seven years. But after she had claimed portions herse…
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…
Was an oil-and-gas tax payment timely when the company sent it to the New Mexico Land Office by mistake on the due date?
No. Yates Petroleum electronically sent its $944,935.20 payment to the New Mexico Land Office on the due date, but payment was legally required to reach the Taxation and Revenue Department. The Land O…
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…
Was natural gas used to generate electricity exempt from compensating tax as chemicals bought in 18-ton lots or as a manufacturing ingredient?
No. Natural gas qualified as chemicals or reagents and each invoice exceeded eighteen tons, but Tucson Electric did not prove how the gas was sold and delivered as a discrete 'lot.' Its alternative in…
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.…
Could Emcore Solar protest a proposed transfer of its approved advanced-energy tax credit before any sale or restructuring occurred?
No. Emcore Solar had not sold an ownership interest, merged, changed organizational form, or transferred its approved $675,444.07 advanced-energy credit. Without an actual transaction and resulting bu…
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…
Could John and Susan Grazier receive 2008-2010 income-tax refunds claimed in 2015 because hardship and Department conversations delayed their returns?
No. The Graziers filed their 2008, 2009, and 2010 personal income tax returns on November 19, 2015, after each three-year refund deadline had expired. Job loss, illness, inability to afford a preparer…
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…
Did paying more than 90% of Elizabeth Brower's 2014 income tax by January 2015 eliminate the penalty for short estimated installments earlier in the year?
No. Elizabeth Brower paid $4,100 of her $4,231 2014 liability by January 2015, exceeding 90%, but her April, June, and September cumulative payments did not reach the required 25%, 50%, and 75% instal…
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 the Greigs recover a $1,610 income-tax overpayment when their timely 2010 refund claims went unanswered but they waited until 2015 to act again?
No. The Greigs timely filed two 2010 claims for a $1,610 2008 income-tax overpayment, but the Department neither granted nor denied them. After 120 days, they had 90 more days to protest or sue, or th…
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…
Were payroll fees and gross receipts tax reimbursements paid through an actor loan-out company subject to the film credit's $5 million performing-artist cap?
Yes. Evolutionary Pictures' $255,166.52 payroll-processing fee and $1,025,000 gross receipts tax reimbursement to EPPSLO existed only because it paid out-of-state actors through that loan-out company.…
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 the Kuriyans recover a $14,957 income-tax refund after two timely claims went unanswered when they did not protest or sue within 210 days of either filing?
No. The Kuriyans timely requested a $14,957 refund on their October 2010 return and again on a December 2013 application the Department sent them. The Department acted on neither claim within 120 days…
Could Christina Evaro use New Mexico's one-year late-payment refund rule after filing her missing 2010 return in 2015 when wage withholding had paid the tax in 2010?
No. Evaro said she mailed a 2010 return claiming $595 in April 2011, but the Department had no record of it; even assuming receipt, she did not challenge the ensuing inaction within 210 days. Her Marc…
Could Irasema Cervantes Pettibone preserve a timely 2008 refund claim after Department inaction when she missed the 210-day challenge deadline because of disability and lack of notice?
No. Pettibone filed her 2008 return and refund claim on December 24, 2012, before the general deadline, but the Department did not act within 120 days and she did not protest or sue by July 21, 2013—t…
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…
Was Andrew Winton personally liable for an LLC restaurant's unpaid withholding tax because registrations listed him as an agent, manager, and officer?
No. Although Texas and New Mexico filings listed Winton as an LLC agent, manager, or officer, he did not own or operate the New Mexico restaurant, work there, receive pay, control accounts, handle fin…
Could Elizabeth Brower avoid estimated-tax penalties because her retirement distributions arrived mostly in December and she paid based on income received by each due date?
No. Brower was required to pay estimated personal income tax in installments using the lesser of 90% of current-year tax or 100% of prior-year tax. Although most retirement distributions arrived in De…
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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.