Could a New Mexico grain hauler deduct intrastate deliveries from a railhead to farms by assuming they were part of an interstate shipment under one contract?

Plain-English summary

Wesley Miller did not prove that his New Mexico grain deliveries were part of interstate transportation under a single contract. His assumption that his father's out-of-state customers had such contracts was not enough for the gross receipts deduction.

Miller's father, Larry Miller doing business as Big River Grain, transported grain for large out-of-state companies. When volume was high, he subcontracted work to Wesley Miller.

Wesley picked up grain at the Albuquerque railhead and delivered it to farms in Valencia and Bernalillo Counties. His own hauling was exclusively within New Mexico. His father paid him $33,193 in 2005 and $37,473 in 2006 as nonemployee compensation.

The deduction required proof of one interstate contract

Section 7-9-56(A) allowed receipts from in-state transportation when the property was moving in interstate or foreign commerce under a single contract. The regulation could extend that deduction to a subcontractor serving the party obligated under the interstate contract.

Miller was not a party to any contract with the out-of-state companies. He had never seen a contract and did not know whether one existed.

Shortly before the hearing, his father supplied a letter and eight weight tickets or invoices. Those materials did not show:

• that the grain originated outside New Mexico;
• the intended final destination under one through shipment;
• that Miller's in-state leg fulfilled the same contract; or
• that all of Miller's 2005 and 2006 receipts related to the listed shipments.

The nonduplicated invoices totaled only $3,915.72, compared with $70,666 of two-year 1099 income. One ticket showed grain picked up from storage, matching the regulation's example where the interstate contract had already ended before a local hauler moved the stored goods.

Without the contract, a bill of lading, witness testimony establishing its terms, or comparable evidence, Miller did not carry his burden.

A continuance was not required

The Department had asked for the single contract repeatedly beginning in January 2013. Miller still had not produced it four months later and requested a ten-day continuance only five days before the hearing.

Although the Department had delayed requesting the hearing for about two years, the decision found that Miller had long been responsible for substantiating the deduction. Five weeks' hearing notice provided a meaningful opportunity to be heard, and another ten days was unlikely to produce a contract that had remained unavailable.

Result: protest denied. The original assessments totaled $4,838.96 in tax, $967.78 in penalty, and $1,720.97 in interest, or $7,527.71. Interest continued until the principal was paid.

What this means for you

Local haulers handling interstate goods

The goods' out-of-state history is not enough. Keep the through contract, bill of lading, routing documents, and evidence that your leg completes the same interstate shipment.

Subcontractors claiming another carrier's deduction

Obtain the controlling contract from the prime carrier when the work begins. An assumption about the prime's relationship with customers will not establish your tax position.

Taxpayers seeking a continuance

Act early and show how more time will produce specific missing evidence. Prior agency delay did not excuse months of inaction after repeated document requests.

Common questions

Q: Was Miller's own hauling interstate?
A: No. He moved grain only between New Mexico locations.

Q: Can an intrastate leg ever qualify?
A: Yes, if it is proven to be part of interstate transportation under a single contract.

Q: Why weren't the weight tickets enough?
A: They did not establish the out-of-state origin, through destination, contract terms, or a link to most of the assessed receipts.

Q: What did pickup from storage suggest?
A: It suggested the interstate shipment had ended before Miller began the separate local haul.

Q: Why was the continuance denied?
A: Miller had received repeated requests and five weeks' hearing notice, yet sought only ten more days at the last moment without showing the contract would become available.

Citations and references

Statutes and regulations:

• NMSA 1978, § 7-1-17(C) — presumption of assessment correctness
• NMSA 1978, §§ 7-9-4, 7-9-3.3, and 7-9-5 — gross receipts tax and taxable-receipts presumption
• NMSA 1978, § 7-9-56(A) and Regulation 3.2.214.8 NMAC — single-contract interstate transportation deduction
• NMSA 1978, §§ 7-1-67 and 7-1-69 and Regulation 3.1.6.13 NMAC — interest and penalty
• NMSA 1978, § 7-1-24(D) and Regulation 3.1.8.9 NMAC — hearing scheduling and continuances

Cases cited:

• Wing Pawn Shop v. Taxation and Revenue Department, 111 N.M. 735 (Ct. App. 1991)
• TPL, Inc. v. New Mexico Taxation & Revenue Department, 2003-NMSC-007
• MPC Ltd. v. New Mexico Taxation & Revenue Department, 2003-NMCA-021
• Matthew v. Eldridge, 424 U.S. 319 (1976), as cited in the decision

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Wesley K. Miller / W & T Miller
• Decision PDF: D&O 13-15

Original ruling text

BEFORE THE HEARING OFFICER
OF THE TAXATION AND REVENUE DEPARTMENT
OF THE STATE OF NEW MEXICO

IN THE MATTER OF THE PROTEST OF
WESLEY K. MILLER No. 13-15
W & T MILLER
TO ASSESSMENT ISSUED UNDER LETTER
ID NO. L0986908736 and L1406939200

DECISION AND ORDER

A protest hearing occurred on the above captioned matter on May 7, 2013 before Brian

VanDenzen, Esq., Tax Hearing Officer, in Santa Fe. Mr. Richard Eisen, CPA, appeared

representing Wesley K. Miller/W&T Miller, (“Taxpayer”). Staff Attorney Susanne Roubidoux

appeared representing the State of New Mexico, Taxation and Revenue Department

(“Department”). Protest Auditor Thomas Dillon appeared as a witness for the Department.

Taxpayer Exhibits #1-6 were admitted into the record. Department Exhibits L1, L2, and L3 were

admitted into the record. All exhibits are more thoroughly described in the Administrative

Exhibit Log. Based on the evidence and arguments presented, IT IS DECIDED AND

ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On March 4, 2010, the Department assessed Taxpayer $2,261.82 in gross receipts

tax, $452.36 in penalty, and $984.50 in interest for a total assessment of $3,698.68 for the

reporting period ending December 31, 2005. [Letter id. no. L0986908736].

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 1 of 13

2. On March 4, 2010, the Department assessed Taxpayer $2,577.14 in gross receipts

tax, $515.42 in penalty, and $736.47 in interest for a total assessment of $3,829.03 for the

reporting period ending December 31, 2006. [Letter id. no. L1406939200].

3. On March 12, 2010, Taxpayer filed a formal written protest of the assessments.

4. On June 7, 2010, the Department acknowledged receipt of Taxpayer’s protest.

5. Taxpayer’s father, Larry Miller d/b/a Big River Grain, provided transportation

services to large out-of-state companies shipping grain to New Mexico customers. [Compact

Disc May 7, 2013, counter 29:20-29:51; counter 35:00-35:05].

6. Larry Miller would pick up grain at the railhead in Albuquerque and deliver the

grain to various farmers in Valencia County and Bernalillo County. [CD 5-7-13, 29:20-29:51].

7. When Larry Miller could not handle the volume of incoming grain shipments,

Larry Miller would subcontract the work out to his son, Taxpayer. [CD 5-7-13, 30:11-30:37].

8. Taxpayer’s subcontractor work for Larry Miller involved transporting grain from

the railhead to farmers in central New Mexico. [CD 5-7-13, 30:11-30:37].

9. Taxpayer’s deliveries of grain under subcontract with Larry Miller were

exclusively intrastate within New Mexico. [CD 5-7-13, 39:28-39:44].

10. Taxpayer is not a party to the contract between Larry Miller and the out-of-state

companies. [CD 5-7-13, 31:03-31:07].

11. Taxpayer did not receive a copy of the shipping contract between Larry Miller

and the out-of-state companies. [CD 5-7-13, 31:07-31:30].

12. Taxpayer has never seen a contract between Larry Miller and the out-of-state

companies. [CD 5-7-13, 31:55-31:59].

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 2 of 13

13. Taxpayer has no evidence/knowledge that Larry Miller ever had a formal contract

with the out-of-state companies; Taxpayer assumed that such a contract existed. [CD 5-7-13,

32:00-32:22].

14. For Taxpayer’s subcontracting work, Larry Miller issued Taxpayer a Form 1099

for 2005, reporting $33,193.00 in non-employee compensation. [Taxpayer Ex. #2].

15. For Taxpayer’s subcontracting work, Larry Miller issued Taxpayer a Form 1099

for 2006, reporting $37,473.00 in non-employee compensation. [Taxpayer Ex. #1].

16. On January 7, 2013, Department Protest Auditor Thomas Dillon sent Taxpayer’s

representative a letter indicating that the Department would need a copy of the single contract for

the out-of-state shipping services. [Department Ex. L1].

17. On February 18, 2013, Mr. Dillon sent Taxpayer’s representative a letter

requesting a copy of the single contract for the out-of-state shipping services to see whether

Taxpayer qualified for deduction. Mr. Dillon asked for the single contract by February 28, 2013.

[Department Ex. L2].

18. On March 6, 2013, Mr. Dillon again sent Taxpayer’s representative a letter

indicating that the Department needed to see the single contract for the out-of-state shipping

services in order to assess the merits of the protest. Since Taxpayer had not responded to the

three previous requests for the single contract, Mr. Dillon indicated that the Department would

request a protest hearing. [Department Ex. L3].

19. In response to Mr. Dillon’s repeated requests, Taxpayer did not produce a copy of

the single contract for the out-of-state shipping services to the Department.

20. On March 28, 2013, the Department requested a hearing.

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 3 of 13

21. On March 28, 2013, the Hearing Bureau sent Notice of Administrative Hearing,

scheduling this matter for a hearing five weeks later on May 7, 2013.

22. On May 2, 2013, five days before the scheduled hearing, Taxpayer moved to

continue the hearing because it needed more time to secure a copy of the single contract.

23. On May 3, 2013, the Hearing Bureau issued an Order Denying the Continuance.

That Order is part of the record of this proceeding.

24. On May 6, 2013, Larry Miller submitted a letter indicating that he contracted with

Wesley Miller to complete the delivery of cattle feed shipments from Garvey Processing,

Lansing Grain, and D.B.S. Commodities. [Taxpayer Ex. #5].

25. Attached to Larry Miller May 6, 2013 letter were eight weight tickets/invoices:

a. December 30, 2006, Taxpayer transportation of 53,280 lb. of stored

Lansing Grain grain to Edeal Dairy. [Taxpayer Ex. #6.1].

b. September 28, 2005, Taxpayer transportation of 56,820 lbs. of D.B.S.

grain from railcar to Edeal Dairy. The weight ticket included invoice #29153

totaling $727.92. [Taxpayer Ex. #6.2].

c. September 19, 2005, Taxpayer transportation of 44,860 lbs. of Garvey

Processing grain from railcar to Pareo Dairy. The weight ticket included invoice

1437, totaling $717.07. [Taxpayer Ex. #6.3].

d. September 15, 2005, Taxpayer transportation of 45,240 lbs. of Garvey

Processing grain from railcar to Pareo Dairy. The weight ticket included invoice

1430, totaling $736.91. [Taxpayer Ex. #6.4].

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 4 of 13
e. September 7, 2005, Taxpayer transportation of 58,680 lbs. of D.B.S.

Commodities product to Edeal Dairy. The weight ticket included invoice #28995,

totaling $1,007.66. [Taxpayer Ex. # 6.5].

f. September 6, 2005, Taxpayer transportation of 66,960 lbs. of D.B.S.

Commodities product to Edeal Dairy. The weight ticket included invoice #28995,

the same invoice attached to Taxpayer Ex. #6.5, and totaling $1,007.66.

[Taxpayer Ex. #6.6].

g. October 28, 2005, Taxpayer transportation of 56,940 lbs. of D.B.S.

Commodities product to Edeal Dairy. The weight ticket included invoice #29639,

totaling $726.16. [Taxpayer Ex. 6.7].

h. September 19, 2005, Taxpayer transportation of 61,800 lbs. of Garvey

Processing grain from railcar to Pareo Dairy. Invoice #1437 was attached to the

weight ticket for $717.07, the same invoice attached to Taxpayer Ex. #6.3.

[Taxpayer Ex. 6.8].

26. On May 7, 2013, at the beginning of the hearing, Taxpayer filed a formal

objection to the denial of the continuance.

27. At the hearing, Taxpayer did not produce a copy of a single contract showing that

the subcontracting transportation services Taxpayer provided to Larry Miller were part of

interstate commerce under a single contract.

DISCUSSION

There is one substantive issue and one procedural issue at dispute in this protest.

Substantively, Taxpayer argues that the assessed gross receipts tax, penalty, and interest for 2005

and 2006 should be abated because Taxpayer was entitled to a deduction under NMSA 1978,

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 5 of 13
Section 7-9-56 (1994). Procedurally, Taxpayer objects to the denial of a request for continuance

and argues prejudice in the inability to produce a single contract as evidence in this matter given

the denial of the continuance.

Presumption of Correctness and Burden of Proof.

Under NMSA 1978, Section 7-1-17(C) (2007), the assessments issued in this case are

presumed to be correct. Consequently, the Taxpayer has the burden to overcome the assessments

and establish that he was entitled to the claimed deductions. See Archuleta v. O'Cheskey, 84 N.M.

428, 431, 504 P.2d 638, 641 (NM Ct. App. 1972). Moreover, “[w]here an exemption or deduction

from tax is claimed, the statute must be construed strictly in favor of the taxing authority, the right to

the exemption or deduction must be clearly and unambiguously expressed in the statute, and the

right must be clearly established by the taxpayer.” Wing Pawn Shop v. Taxation and Revenue

Department, 111 N.M. 735, 740, 809 P.2d 649, 654 (Ct. App. 1991); See also TPL, Inc. v. N.M.

Taxation & Revenue Dep't, 2003 NMSC 7, ¶9, 133 N.M. 447, 451, 64 P.3d 474, 478 (N.M. 2002).

However, once a taxpayer rebuts the presumption of correctness, the burden shifts to the

Department to show the correctness of the assessed tax. See MPC Ltd. v. N.M. Taxation & Revenue

Dep't, 2003 NMCA 21, ¶13, 133 N.M. 217, 220, 62 P.3d 308, 311 (N.M. Ct. App. 2002).

Gross Receipts Tax and the Claimed Deduction.

For the privilege of engaging in business, New Mexico imposes a gross receipts tax on the

receipts of any person engaged in business. See NMSA 1978, Section 7-9-4 (2002). “Engaging in

business” is defined as “carrying on or causing to be carried on any activity with the purpose of

direct or indirect benefit.” NMSA 1978, Section 7-9-3.3 (2003). Under the Gross Receipts and

Compensating Tax Act, there is a statutory presumption that all receipts of a person engaged in

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 6 of 13
business are taxable. See NMSA 1978, Section 7-9-5 (2002). During 2005 and 2006, Taxpayer was

engaged in the transportation business as a subcontractor for his father, Larry Miller. As such, any

of Taxpayer’s receipts during 2005 and 2006 (unless otherwise exempted or deductable) were

presumed subject to gross receipts tax under NMSA 1978, Section 7-9-5 (2002).

In this protest, Taxpayer claims a deduction from gross receipts tax under NMSA 1978, §7-

9-56 (1994). In pertinent part, NMSA 1978, §7-9-56 (A) (1994) states that

[r]eceipts from transporting persons or property from one point to another in
this state may be deducted from gross receipts when such persons or
property… is being transported in interstate or foreign commerce under a
single contract.

(emphasis added). Regulation 3.2.214.8 (A) NMAC (05/31/01) further addresses the deduction:

[the deduction applies] to the receipts of persons who are not a party to a
single contract for the transportation of property or persons in interstate
commerce but who are selling such services to the person who is obligated
to furnish the transportation in interstate commerce under the terms of the
contract.

Regulation 3.2.214.8 NMAC (05/31/01) also provides several examples of whom might

qualify for a deduction under NMSA 1978, §7-9-56 (1994). Taxpayer argues that his services

qualify for deduction under the example articulated under Regulation 3.2.214.8 (B) NMAC

(05/31/01):

Example 1: X, a pipe supply house in Durango, Colorado, sells C in Las
Cruces, New Mexico, a truckload of pipe. T, a truck line service, regularly
transports property from Durango to Albuquerque. B, another truck line
service, has New Mexico authority to transport property from Albuquerque
to Las Cruces. X ships the pipe under a through bill of lading to Las Cruces
with T. T carries the pipe to Albuquerque. At Albuquerque B attaches a
tractor to T's trailer and carries the pipe on to Las Cruces. B can deduct the
receipts which B receives from hauling the pipe from a point in New Mexico
to another point in New Mexico. The pipe is being shipped in interstate
commerce under a single contract. T can deduct its receipts from this
transaction under the provisions of Section 7-9-56 NMSA 1978.

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 7 of 13
However, another example under Regulation 3.2.214.8 (D) NMAC (05/31/01) is also relevant to the

resolution of this protest:

Example 3: Y orders materials from an out-of-state supplier and the
materials are shipped to Albuquerque under a single contract. The materials
are stored in Albuquerque and then Y hires X, a local hauler, to take the
materials from the place of storage to the job site. X claims receipts from
performing this service are deductible under Section 7-9-56 NMSA 1978.
X's receipts are not deductible. X's hauling was not under the single contract
or tariff for the interstate shipment. The single contract has previously been
completed.

Having addressed the legal underpinnings of this issue, the remaining question is largely

factual and a question of the sufficiency of evidence: whether Taxpayer established that his portion

of intrastate transportation of grain to New Mexico farmers was part of the shipment of interstate

transportation under a single contract. Taxpayer did not introduce the contract between Larry Miller

and the out-of-state companies into the record. Taxpayer has never seen a single contract.

While the weight tickets and letter of Larry Miller do provide some circumstantial evidence

that such a single contract might have existed, they are not sufficient to find by the preponderance

that all of Taxpayer’s receipts in 2005 and 2006 resulted from Taxpayer’s intrastate transportation

services as part of interstate shipments under a single contract. Even though the companies might be

large out-of-state corporations, Larry Miller’s letter does not specify that the shipment of grain

originated from out-of-state. Further, the weight tickets and invoices do not specify whether the

grain originated from an out-of-state destination with an intended final destination. The weight

tickets also do not specify whether the New Mexico portion of the transportation was part of the

fulfillment of an interstate single contract. Moreover, those weight ticket invoices account only for a

small portion of Taxpayer’s receipts in the years in question. The non-duplicative invoices1 of all

the weight tickets totaled $3,915.72, an amount much smaller than Taxpayer’s 2005 and 2006 Form

1
Two of the weight tickets presented included duplicate invoices, as noted in FOF #25(f) and FOF #25(g).

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 8 of 13
1099 income totaling $70,666.00. Even if this evidence was arguably sufficient to qualify for the

deduction, at best it would only entitle Taxpayer to deduction of $3,915.72 of Taxpayer’s receipts in

2005 and 2006, a very small portion of the Department’s assessments of tax. Finally, Taxpayer Ex.

6.1 shows that Taxpayer picked up the shipped grain from storage. Picking up the grain from

storage suggests that the third example contained under Regulation 3.2.214.8 (D) NMAC

(05/31/01), as cited above, controls that Taxpayer is not entitled to the claimed deduction for that

invoice. Like in the third example, picking up a stored product suggests that single contract had

been completed upon delivery to storage.

Example 1 contained under Regulation 3.2.214.8 (B) NMAC (05/31/01) does not control

because there simply is not enough evidence to establish that the intrastate transportation services

Taxpayer provided were part of the completion of interstate shipment under a single contract. In

example 1, there was a bill of lading detailing the transportation from the out-of-state origin to its

final destination in New Mexico. No such evidence exists in this case. As discussed above, the

weight tickets do not provide clear evidence of an out-of-state origin and in-state destination for the

products that Taxpayer transported.

Ultimately, when claiming a deduction, Taxpayer has the burden to substantiate that he is

entitled to the claimed deduction. See Wing Pawn Shop v. Taxation and Revenue Department, 111

N.M. 735, 740, 809 P.2d 649, 654 (Ct. App. 1991); See also TPL, Inc. v. N.M. Taxation & Revenue

Dep't, 2003 NMSC 7, ¶9, 133 N.M. 447, 451, 64 P.3d 474, 478 (N.M. 2002). Taxpayer’s

representative in this case acknowledged that Taxpayer did not in fact know whether there was a

single contract in place between the large companies and Larry Miller, and simply assumed that

such a contract existed. Without producing a copy of the single contract, witness testimony, or other

more detailed evidence substantiating the intrastate transportation was part of the completion of

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 9 of 13
interstate commerce under a single contract, Taxpayer failed to demonstrate that he was entitled to

the claimed deduction under NMSA 1978, §7-9-56 (A) (1994) and failed to overcome the

presumption of correctness that attached to the Department’s assessments. Since Taxpayer made no

arguments about penalty and interest, Taxpayer also did not overcome the presumption of

correctness as to penalty and interest.

Denial of Continuance

Taxpayer’s representative argued that the notice of hearing left insufficient time to prepare

for the hearing and that the denial of the continuance prejudiced the ability to obtain a copy of the

single contract at issue in this matter. Taxpayer argued that it was unreasonable to deny Taxpayer’s

continuance on the grounds it was filed with short notice considering that the Department delayed

acting on this protest for two-years. This argument does not persuade.

The transactions at issue in this protest occurred in 2005 and 2006. When claiming a

deduction from tax, Taxpayer had an obligation to substantiate the claimed deductions. Nothing

about the procedural posture of this protest alters the basic fact Taxpayer did not have the single

contract supporting the deduction at the time of filing the 2005 and 2006 gross receipts tax returns.

Nor did Taxpayer present a copy of the single contract upon assessments on March 4, 2010, a time

when Taxpayer was clearly on notice that Taxpayer would need proof of his claimed deductions.

It is true that it took two years for the Department to request a protest hearing with the

Hearing Bureau. There is no explanation on this record for the Department’s delay in requesting

hearing. The Hearing Bureau first learned of this matter upon the Department’s filing of a request

for hearing on March 28, 2013. That same day, in compliance with NMSA 1978, Section 7-1-24

(D) (2003), the Hearing Bureau promptly mailed Notice of Administrative Hearing, scheduling this

matter for a protest hearing more than five-weeks later on May 7, 2013. Five-days before the

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 10 of 13
scheduled hearing, Taxpayer moved to continue this matter for an additional 10-days so that

Taxpayer could obtain a copy of the single contract. Given the constraints of the Hearing Bureau’s

docket, a forthcoming legislative change in statute under NMSA 1978, §7-1-242 likely to constraint

the docket further, and the five day notice of Taxpayer’s request for continuance, Taxpayer’s

request for a continuance was denied. See Regulation 3.1.8.9 NMAC (08/30/01) (granting Hearing

Officer independent authority to avoid delay in the proceeding and to rule on continuances).

While there is an unexplained Department delay in addressing this protest, it is also true that

the Department sent Taxpayer’s representative three letters referencing the need for presentation of

the single contract. Taxpayer did not submit the single contract in response to Mr. Dillon’s January

7, 2013 letter, the February 18, 2013 letter, or the March 6, 2013 letter. Since January 7, 2013,

Taxpayer has had express notice that the Department required a copy of the single contract in order

to grant Taxpayer a deduction under NMSA 1978, §7-9-56 (A) (1994). Yet, Taxpayer did not

present that single contract to the Department in response to those letters or by the May 7, 2013

hearing date, four months after Mr. Dillon’s letter. If Taxpayer was unable to obtain the single

contract in the four months since Mr. Dillon’s January 7, 2013 letter, it is unlikely that the granting

of an additional 10-day continuance—as Taxpayer asked for in the request for continuance—would

have been sufficient to secure the single contract.

In this case, Taxpayer had adequate notice of hearing and a reasonable opportunity to be

heard. See Matthew v. Eldridge, 424 U.S. 319 (1976) (“the fundamental requirement of due

process is the opportunity to be heard at a meaningful time and in a meaningful manner”); see

also Mills v. New Mexico State Bd. of Psychologist Exam'rs, 123 N.M. 421, 426 (N.M. 1997)

(“[p]rocedural due process requires notice and an opportunity to be heard…”). See also Cordova

2
2013 N.M. Laws, ch. 27, §7,codified at NMSA 1978, §7-1-24.1(A) (2013) (requiring setting of hearing within 90-
days of the protest).

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 11 of 13
v. Taxation & Revenue, Prop. Tax Div., 2005 NMCA 9, ¶22, 136 N.M. 713, 719 104 P.3d 1104,

1110 (N.M. Ct. App. 2004). Five-weeks is hardly an inadequate amount of notice to prepare for a

protest hearing, particularly for a protest involving a straight-forward factual and legal issue of

whether Taxpayer qualified for a claimed deduction for interstate transportation under a single

contract. At the protest hearing, Taxpayer was represented by a CPA, had an opportunity to present

evidence, witness testimony, cross examine the Department’s witness, and make argument.

Taxpayer complains that the denial of the continuance filed five-days before the hearing deprived

him of the opportunity to present the single contract. However, Taxpayer’s inability to obtain the

single contract did not result from the denial of the continuance but from Taxpayer’s own inactions

dating back until at least January 7, 2013, if not all the way back to the date of assessments in 2010.

Taxpayer’s protest is denied.

CONCLUSIONS OF LAW

A. Taxpayer filed a timely, written protest to the assessments. Jurisdiction lies over the

parties and the subject matter of this protest.

B. Taxpayer did not know whether a single contract existed and did not present a single

contract showing that his intrastate transportation services were part of a larger interstate transaction

under a single contract. Without proof that the transportation services rendered were part of

fulfillment of interstate commerce under a single contract, Taxpayer is not entitled to a claim a

deduction under NMSA 1978, §7-9-56 (1994).

C. Taxpayer did not overcome the presumption of correctness that attached to the

assessments of interest. See Regulation 3.1.6.13 NMAC (01/15/01). Under NMSA 1978, Section

7-1-67 (2007), Taxpayer is liable for accrued interest under the assessments, which continues to

accrue until the tax principal is satisfied.

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 12 of 13
D. Taxpayer did not overcome the presumption of correctness that attached to the

assessments of penalty. See Regulation 3.1.6.13 NMAC (01/15/01). Taxpayer was civilly

negligent and thus liable for civil penalty pursuant to NMSA 1978, Section 7-1-69 (2007).

For the foregoing reasons, the Taxpayer's protest of the assessments IS DENIED. Taxpayer

owes the assessed 2005 and 2006 tax, penalty, and interest. Under NMSA 1978, § 7-1-67 (2007),

interest continues to accrue until tax principal is paid.

DATED: June 3, 2013.

Brian VanDenzen, Esq.
Tax Hearing Officer
Taxation & Revenue Department
Post Office Box 630
Santa Fe, NM 87504-0630

In the Matter of the Protest of Wesley K. Miller, W & T Miller., page 13 of 13