Could a film worker exclude unexplained Schedule C income from New Mexico gross receipts tax by saying he had mixed W-2 wages into the business-income figure?

Plain-English summary

Kevin St. John could not remove an unexplained portion of his Schedule C business income from New Mexico gross receipts tax by saying it included W-2 wages. His federal return and supporting records did not reconcile, and he did not amend the return to identify the wage amount.

In 2006, St. John worked both as an employee in the film and ski industries and as an independent film contractor. New Mexico's IRS tape-match program found $23,630 in Schedule C business income but no reported gross receipts tax.

St. John supplied three 1099-MISCs, several W-2s, and two NTTCs. The Department accepted the certificates for receipts from Southwest Productions and Creative Services, removing $16,607 from the taxable amount. It assessed only the remaining $7,023 of the Schedule C figure.

Employee wages were exempt, but the records did not show which amount was wages

Section 7-9-17 exempted employee wages from gross receipts tax. The factual problem was proving which part of the Schedule C amount represented wages rather than contractor receipts.

St. John's records showed:

• $18,206.41 in 1099-MISC receipts;
• $18,099.75 in W-2 wages when the additional Park Group item was included;
• only $17,500 of wages reported on Form 1040; and
• $23,630 of business income reported on Schedule C.

No combination of the listed 1099 receipts and particular W-2s explained the Schedule C total. St. John said he had long included some wages on Schedule C, partly based on H&R Block consultations, so he could deduct more business expenses. But he could not identify which wages were included.

The Department encouraged him to amend the 2006 federal return. He did not. Without an amended Schedule C or other clear accounting, the Department could rely on the business-income figure he reported to the IRS.

The reporting error supported penalty and interest

The decision treated the erroneous mixing of wages and business income as negligence, even if inadvertent. St. John did not show that a qualified professional had advised him about the New Mexico gross receipts tax consequences after full disclosure of the facts.

Interest was mandatory from the original due date until payment.

Result: protest denied. As of the hearing, St. John owed $497.64 in tax, $99.53 in penalty, and $198.86 in interest, totaling $796.03. Interest continued at $0.04 per day.

What this means for you

Workers receiving both W-2s and 1099s

Keep wages and contractor receipts separate. W-2 wages may be exempt from gross receipts tax, while independent-contractor receipts are generally presumed taxable.

Taxpayers facing an IRS tape-match audit

Reconcile the federal return to source documents line by line. A general explanation that some business income was actually wages may not overcome the reported Schedule C number.

People discovering an old federal reporting error

An amended federal return can be critical evidence. The decision expressly relied on St. John's choice not to amend or otherwise identify the misclassified amount.

Common questions

Q: Did St. John receive credit for any nontaxable receipts?
A: Yes. Timely NTTCs supported $16,607 of receipts, and the Department excluded them.

Q: Why weren't all W-2 wages excluded?
A: Wages were exempt in principle, but St. John could not show which specific wages were included in his Schedule C total.

Q: What amount remained subject to gross receipts tax?
A: $7,023 of the reported Schedule C income.

Q: Why did the Department rely on Schedule C?
A: It was St. John's own federal business-income report, and he neither amended it nor supplied a consistent accounting.

Q: What remained due at the hearing?
A: $796.03, with interest continuing at $0.04 per day.

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, § 7-9-17 — employee-wage exemption
• NMSA 1978, § 7-1-67 — mandatory interest
• NMSA 1978, § 7-1-69 and Regulations 3.1.11.10-.11 NMAC — negligence penalty and exceptions

Cases cited:

• Wing Pawn Shop v. Taxation and Revenue Department, 1991-NMCA-024
• MPC Ltd. v. New Mexico Taxation & Revenue Department, 2003-NMCA-021
• Holt v. New Mexico Department of Taxation & Revenue, 2002-NMSC-034
• El Centro Villa Nursing Center v. Taxation and Revenue Department, 1989-NMCA-070

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Kevin St. John
• Decision PDF: D&O 13-19

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
KEVIN ST. JOHN No. 13-19
TO ASSESSMENTS ISSUED UNDER LETTER
ID NO. L0252924490

DECISION AND ORDER

A protest hearing occurred on the above captioned matter on July 2, 2013 before Brian

VanDenzen, Esq., Tax Hearing Officer, in Santa Fe. Mr. Kevin St. John (“Taxpayer”) appeared

pro se. Staff Attorney Peter Breen appeared representing the Taxation and Revenue Department

of the State of New Mexico (“Department”). Protest Auditor Mary Griego appeared as a witness

for the Department. Taxpayer Exhibits #1-4 and Department Exhibits A-D were admitted into

the record. All exhibits are more thoroughly described in the Administrative Exhibit Log. The

undersigned Hearing Officer also reviewed and printed out IRS Form 1040 (2006), IRS Form

1040, Schedule C (2006), and IRS 2006 Instructions for Schedule C (2006), which are included

in the administrative record for reference. Based on the evidence and arguments presented, IT IS

DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On November 30, 2010, the Department assessed Taxpayer $497.64 in gross

receipts tax principal, $99.52 in penalty, and $156.89 in interest for a total assessment of $754.05

for the reporting period ending December 31, 2006. [Letter id. no. L0252924480].

2. On December 3, 2010, Taxpayer filed a written protest of the assessment.

3. On January 18, 2011, the Department acknowledged receipt of Taxpayer’s

protest.

4. On May 21, 2013, the Department requested a hearing in this matter.

5. On May 22, 2013, the Hearing Bureau issued Notice of Administrative Hearing,

scheduling this matter for July 2, 2013.

6. In 2006, Taxpayer worked both as an employee in the film and ski industries, and

as an independent contractor in the film industry. [Taxpayer Ex. 1; Taxpayer Ex. 3; 07-02-13

CD 06:00-07:32; 07-02-13 CD 23:57-24:22].

7. The assessment in this matter originated from the Department’s Tape Match

program with the IRS. Under that program, the Department detected a mismatch between

Taxpayer’s reported 2006 IRS Schedule C business income of $23,630.00 and Taxpayer’s

reported New Mexico gross receipts tax liability of $0.00. [Department Ex. B; 07-02-13 CD

25:20-49].

8. The Department sent Taxpayer “Notice of Limited Scope Audit Commencement-

Schedule C Gross Receipts” on January 13, 2010. This Notice informed Taxpayer of the

$23,630.00 discrepancy between his Schedule C and State gross receipts tax information.

[Department Ex. B; 07-02-13 CD 39:20-39:58].

9. In response to the Notice of Limited Scope Audit, Taxpayer provided the

Department three 2006 1099-MISCs, five 2006 W-2s, and two nontaxable transaction certificates

(“NTTCs of NTTC”). [07-02-13 CD 25:49-26:02].

10. Taxpayer provided the following 2006 1099-MISCs totaling $18,206.41 to the

Department:

a. Creative Services, Inc., for $3,645.63. [Taxpayer Ex. 1.1].

b. Southwest Productions, Inc., for $12,960.78. [Taxpayer Ex. 1.2].

c. Mills/James Productions, for $1,600.00. [Taxpayer Ex. 1.3].

In the Matter of the Protest of Kevin St. John, page 2 of 12

11. Taxpayer proved the following NTTCs to the Department:

a. Type 16 NTTC executed by Southwest Productions, Inc. on October 1,

1999. [Taxpayer Ex. 2.1].

b. Type 16 NTTC executed by Creative Services, Inc. on April 1, 1997.

[Taxpayer Ex. 2.2].

12. In light of Taxpayer’s presentation of timely executed NTTCs, the Department

accepted that Taxpayer’s receipts from Southwest Productions, Inc. and Creative Services, Inc.

were nontaxable. Therefore, the assessed gross receipts tax did not include the $16,607 in total

receipts from those two companies and only imposed gross receipts tax on the remaining

$7,023.00 in business income that Taxpayer listed on his IRS Schedule C. [Department Ex. C;

07-02-13 CD 25:40-26:37; 07-02-13 CD 39:49-40:22].

13. Taxpayer provided the Department five 2006 W-2s totaling $17,499.75 as

follows:

a. Talent Services Int’l Corp., for $1000.00. [Taxpayer Ex. 3.1].

b. Santa Fe Ski Company for $2,904.75. [Taxpayer Ex. 3.2].

c. FPS Payroll Services, Inc., for $4,705.00. [Taxpayer Ex. 3.3].

d. Talent Paymaster, Inc., for $7,180.00. [Taxpayer Ex. 3.4].

e. PDEI, Inc., for $1,710.00. [Taxpayer Ex. 3.5].

14. At the hearing, Taxpayer presented a spreadsheet of this 2006 income that

included reference to a 2006 W-2 from Park Group for $600.00, though that W-2 was not

provided at hearing. Adding the Park Group W-2 to the other W-2s discussed in FOF #12,

Taxpayer had $18,099.75 in W-2 wage income in 2006. [Taxpayer Ex. 4].

In the Matter of the Protest of Kevin St. John, page 3 of 12

15. On line 7 of his 2006 IRS Form 1040 Individual Income Tax Return, Taxpayer

only reported $17,500 in wages and salaries from his W-2s identified in FOF #12 rather than

reporting $18,099.75, which is the total wage income with the Park Group W-2. [Department

Ex. D].

16. On line 12 of his 2006 IRS Form 1040 Individual Income Tax Return, Taxpayer

reported $13,960 in business income from his Schedule C. [Department Ex. D].

17. Although Taxpayer’s 2006 1099-MISCs totaled only $18,206.41, Taxpayer

reported $23,630.00 in business income on his 2006 IRS Schedule C. [Department Ex. B].

18. In 2006, in accord with his long standing practice and based partially on his

consultations with H&R Block over the years, Taxpayer included some unspecified income from

his W-2s on his IRS Schedule C in order to deduct more business expenses from his taxable

income. [07-02-13 CD 19:04-21:38].

19. In addition to Taxpayer’s $18,206.41 1099-MISC income, there is no possible

combination of any specific W-2 or series of W-2s that would total the $23,630.00 amount that

Taxpayer listed on his IRS 2006 Schedule C. Therefore, it is impossible to determine which W-2

or series of W-2s Taxpayer included in his Schedule C.

20. The Department encouraged Taxpayer to amend his 2006 federal 1040 income tax

return to remove his W-2 income from his Schedule C. Taxpayer did not amend his 2006 federal

1040 income tax return. [07-02-13 CD 28:04-29:55].

21. Taxpayer did not demonstrate which of his wage income from W-2s was included

in his Schedule C total of $23,630.00. Without either an amended Schedule C total

corresponding with the $18,207 in 1099-MISCs that Taxpayer provided or without other proof of

which W-2s were erroneously included in his original 2006 IRS Schedule C, the Department had

In the Matter of the Protest of Kevin St. John, page 4 of 12
no factual basis to further abate gross receipts tax because it could not determine which W-2s

had been included in the Schedule C. [07-02-13 CD 28:54-29:55; 07-02-13 CD 40:39-41:06;

07-02-13 CD 46:06-47:17].

22. As of the date of hearing, Taxpayer owed $497.64 in gross receipts tax, $99.53 in

penalty, and $198.86 in interest for a total outstanding liability of $796.03. Interest continues to

accrue at $0.04 per day. [Department Ex. A; 07-02-13 CD 29:59-30:27].

DISCUSSION

This case originates from the Department’s detection of a discrepancy between the

$23,630.00 in business income Taxpayer reported on his 2006 Schedule C to the IRS and the

$0.00 Taxpayer reported in 2006 New Mexico gross receipts tax. After conducting a limited

scope audit, where Taxpayer was given credit for $16,607 in deductible receipts supported by

timely executed NTTCs, the Department assessed Taxpayer gross receipts tax, penalty, and

interest on the remaining $7,023.00 in Taxpayer’s self-reported Schedule C business income.

Taxpayer protested, arguing that with the exception of $1,600.00 in his Mill James Production

receipts where he was not provided with a NTTC, all of his remaining 2006 income and receipts

was not subject to New Mexico gross receipts tax.

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

presumed correct. Consequently, the Taxpayer has the burden to overcome the assessment and

establish that he was entitled to the claimed deduction. See Archuleta v. O'Cheskey, 1972-NMCA-

165, ¶11, 84 N.M. 428, 431. 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, 1991-NMCA-

In the Matter of the Protest of Kevin St. John, page 5 of 12
024, ¶16, 111 N.M. 735, 740 (internal citation omitted); See also TPL, Inc. v. N.M. Taxation &

Revenue Dep't, 2003-NMSC-7, ¶9, 133 N.M. 447, 451. When 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.

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, § 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, § 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

business are taxable. See NMSA 1978, § 7-9-5 (2002). However, under NMSA 1978, Section 7-9-

17, “[e]xempted from gross receipts tax are the receipts of employees from wages…”

In 2006, the evidence established that Taxpayer worked as both an independent contractor in

the film industry and as an employee in the film and ski industries. Taxpayer, as an independent

contractor, was engaged in business and therefore his receipts were presumed subject to gross

receipts tax under Section 7-9-5. While Taxpayer’s receipts as an employee would not be subject to

gross receipts tax under Section 7-9-17, the problem in this matter is factual: because Taxpayer

included some of his employee wages as business income on his Schedule C filing with the IRS,

and there are discrepancies between his reported Schedule C income, his IRS 1040 tax return, and

the records he provided to the Department, there is no way to delineate which portion of his

Schedule C income is attributable to wages.

At hearing, Taxpayer initially seemed to present compelling evidence based on his

spreadsheet of 2006 income, Taxpayer Ex. 4, that he was entitled to further deductions. However,

in accord with the Department’s Mary Griego credible testimony at hearing and upon more careful

In the Matter of the Protest of Kevin St. John, page 6 of 12
mathematical review after hearing, the numbers contained on Taxpayer Ex. 4 remain at odds with

his 2006 IRS Schedule C and his 1040 tax return. On Taxpayer Ex. 4, Taxpayer listed $18,206.41

in 1099-MISC income and $18,099.75 in W-2 income, for a total 2006 income of $36,397.53.

Taxpayer reported $23,600 in business income on his 2006 IRS Schedule C, which is more than the

1099-MISC income total shown on Taxpayer Ex. 4. While Taxpayer testified that he included

some of his W-2 income as business income, no combination of Taxpayer’s $18,206.41 total 1099-

MISC business income with any particular W-2 or series of W-2s shown on Taxpayer Ex. 4 equals

the $23,630.00 in business income reported on his Schedule C. Moreover, while Taxpayer only

reported $17,500 in wage income on his 1040 tax return, at hearing Taxpayer demonstrated that he

in fact had $18,099.75 in 2006 wage income. While Taxpayer genuinely believed that Taxpayer

Ex. 4 contained all of his 2006 income, given the discrepancy in the numbers and the age of the

case, it is possible either that Taxpayer had some other income that year that he can no longer recall,

or his self-reported IRS Schedule C business income was inaccurate. Considering the presumption

of correctness and the presumption that all receipts of a person engaged in business are subject to

gross receipts tax until Taxpayer clearly establishes that the receipts are exempt, neither scenario

supports further exemption of taxes, especially because of the incongruence of the numbers.

Further, Taxpayer incorrectly reported some of his employee wage income from his W-2s

on his 2006 IRS Schedule C. Wage income listed on Taxpayer’s W-2s is employment income to be

reported specifically as wages on Line 7 of IRS Form 1040, U.S. Individual Income Tax Return

(2006). See Department Ex. D. Taxpayer’s independent contractor income contained on his 1099-

MISCs is business income that must be reported on the Schedule C, the total of which must be listed

on Line 12 of IRS Form 1040, U.S. Individual Income Tax Return (2006). See Department Ex. D.

In the 2006 Instructions for Schedule C, the IRS instructs taxpayers that they cannot combine self-

In the Matter of the Protest of Kevin St. John, page 7 of 12
employment income with statutory employee income on a single Schedule C. See IRS Form 1040

sched. C, C3 (2006).

In conducting this audit, the Department reasonably relied on Taxpayer’s self-reported 2006

IRS Schedule C business income as the starting basis for determining Taxpayer’s potential gross

receipts tax liability. Ultimately, Taxpayer had a duty to report his Schedule C income to the IRS

properly. Because Taxpayer erroneously included W-2 wage income as business income on his

Schedule C leading to the discrepancy in numbers in this matter, Taxpayer needed to amend his

2006 federal 1040 return and Schedule C. Absent amendment, the Department is entitled to rely on

the information that Taxpayer self-reported to the IRS on his Schedule C, and assess gross receipts

taxes accordingly. See e.g. Holt v. N.M. Dep't of Taxation & Revenue, 2002- NMSC-34, ¶23, 133

N.M. 11, 19 (N.M. 2002) (under a self-assessment system where taxpayers’ have a duty to report,

the Department may assess additional tax above the reported federal gross income amount when W-

2s demonstrated that a taxpayer made reporting errors on their federal income tax return).

Absent either an amended federal return (which the Department encouraged Taxpayer to

file) or some other clear evidence showing an accounting of Taxpayer’s 2006 Schedule C, the

Department has insufficient information to allow additional exemptions, deductions, or otherwise

abate the assessment. Taxpayer has not amended his 2006 IRS Schedule C to remove his employee

wages or in any other manner demonstrated what specific employee wage income from his W-2s he

included in his Schedule C business income. The information Taxpayer brought to hearing was

insufficient because the total W-2s wage income and the total business income are inconsistent with

what he reported to the IRS in 2006 on his 1040 tax return and Schedule C. Since all receipts of a

person engaged in business are presumed subject to gross receipts tax and since Taxpayer carries the

burden to clearly establish he is entitled to an exemption from tax under Wing Pawn Shop, ¶16,740,

In the Matter of the Protest of Kevin St. John, page 8 of 12
Taxpayer’s failure to either amend his Schedule C or otherwise demonstrate which specific

employee wages he included in his business income is fatal to his protest because he cannot show

what amount of the reported $23,600.00 business income he derived from his employee wages.

Factually, Taxpayer did not overcome the presumption of correctness that attached to the

Department’s assessment and did not establish he was entitled to exemption of gross receipts tax

under Section 7-9-17.

Interest.

When a taxpayer fails to make timely payment of taxes due to the state, “interest shall be

paid to the state on that amount from the first day following the day on which the tax becomes

due...until it is paid.” NMSA 1978, § 7-1-67 (2007) (italics for emphasis). Under the statute, the

Department has no discretion in the imposition of interest, as the statutory use of the word

“shall” makes the imposition of interest mandatory. See Marbob Energy Corp. v. N.M. Oil

Conservation Comm'n, 2009-NMSC-013, ¶22, 146 N.M. 24, 32 (use of the word “shall” in a statute

indicates provision is mandatory absent clear indication to the contrary). The language of the statute

also makes it clear that interest begins to run from the original due date of the tax and continues

until the tax principal is paid in full. The Department has no discretion under Section 7-1-67 and

must assess interest against Taxpayer from the time the tax was due but not paid until the tax is paid.

Penalty.

When a taxpayer fails to pay taxes due to the State because of negligence or disregard of

rules and regulations, but without intent to evade or defeat a tax, NMSA 1978 Section 7-1-69

(2007) requires that

there shall be added to the amount assessed a penalty in an amount equal
to the greater of: (1) two percent per month or any fraction of a month

In the Matter of the Protest of Kevin St. John, page 9 of 12
from the date the tax was due multiplied by the amount of tax due but not
paid, not to exceed twenty percent of the tax due but not paid.

(italics added for emphasis).

As discussed above, the statute’s use of the word “shall” makes the imposition of penalty

mandatory in all instances where a taxpayer’s actions or inactions meets the legal definition of

“negligence” even if a taxpayer’s actions or inactions were unintentional.

Regulation 3.1.11.10 NMAC defines negligence in three separate ways: (A) “failure to

exercise that degree of ordinary business care and prudence which reasonable taxpayers would

exercise under like circumstances;” (B) “inaction by taxpayer where action is required”; or (C)

“inadvertence, indifference, thoughtlessness, carelessness, erroneous belief or inattention.”

Inadvertent error meets the legal definition of “negligence” under the penalty statute. See El Centro

Villa Nursing Center v. Taxation and Revenue Department, 1989-NMCA-070, ¶10, 108 N.M. 795,

799. Here, Taxpayer’s erroneous calculation of his Schedule C business income, even if

inadvertent, constitutes civil negligence under El Centro Villa Nursing Center and Regulation

3.1.11.10 NMAC.

In instances where a taxpayer might otherwise fall under the definition of civil negligence

generally subject to penalty, NMSA 1978 Section 7-1-69 (B) (2003) provides a limited

exception: “No penalty shall be assessed against a taxpayer if the failure to pay an amount of tax

when due results from a mistake of law made in good faith and on reasonable grounds.” Further,

under Regulation 3.1.11.11 NMAC, there are several situations where a taxpayer can show

nonnegligence. In such nonnegligent situations, the Department either may choose not to assess

civil penalty or may abate civil penalty. Potentially relevant in this case is Regulation 3.1.11.11

(D) NMAC, which allows for abatement of penalty when a taxpayer “proves that the failure to

In the Matter of the Protest of Kevin St. John, page 10 of 12
pay tax or to file a return was caused by reasonable reliance on the advice of competent tax

counsel or accountant as to the taxpayer’s liability after full disclosure of all relevant facts…”

In this protest, Taxpayer testified that it became his practice over 30-years to include W-2

employee wage income in his Schedule C partially because he believed that was what H&R

Block advised him to do. However, there is no evidence that Taxpayer ever discussed the

potential gross receipts tax consequences of such an action with H&R Block or any other

qualified tax professional. Without such a discussion, it cannot be said that H&R Block’s advice

came after full disclosure of all relevant facts or that Taxpayer relied on that information on

reasonable grounds. Therefore, neither Section 7-1-69(B) nor Regulation 3.1.11.11 (D) NMAC

provides a basis to abate penalty in this case.

CONCLUSIONS OF LAW

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

parties and the subject matter of this protest.

B. Taxpayer’s was a person engaged in business in 2006, and therefore all of

Taxpayer’s receipts in that year are presumed subject to gross receipts tax under NMSA 1978,

Section 7-9-5 (2002). Because Taxpayer did not establish factually which portion of his receipts was

attributable to employee wage income, Taxpayer did not clearly establish he was entitled to the

exemption from gross receipts tax under NMSA 1978, Section 7-9-17. See Wing Pawn Shop v.

Taxation and Revenue Department, 1991-NMCA-024, ¶16, 111 N.M. 735, 740 (internal citation

omitted) (a taxpayer must clearly establish the right to an exemption from taxation).

C. Because of discrepancies between Taxpayer’s federally reported business income on

his Schedule C (which Taxpayer choose not to amend), his 2006 IRS 1040 tax return, and the total

income listed on the documentation presented to the Department and at hearing, Taxpayer did not

In the Matter of the Protest of Kevin St. John, page 11 of 12
overcome the presumption of correctness under NMSA 1978, Section 7-1-17 that attached to the

Department’s assessment.

D. Under NMSA 1978, Section 7-1-67 (2007), Taxpayer is liable for accrued interest

under the assessment. Interest continues to accrue until the tax principal is satisfied.

E. Under Regulation 3.1.11.10 (C) NMAC, Taxpayer’s erroneous belief that he could

report wage income on a single Schedule C was negligent and thus Taxpayer is liable for civil

penalty pursuant to NMSA 1978, Section 7-1-69 (2007). See El Centro Villa Nursing Center v.

Taxation and Revenue Department, 1989-NMCA-070, ¶10, 108 N.M. 795, 799.

For the foregoing reasons, Taxpayer's protest IS DENIED. Taxpayer owes $497.64 in

gross receipts tax, $99.53 in penalty, and $198.86 in interest (as of the date of hearing) for a total

outstanding liability of $796.03. Interest continues to accrue at $0.04 per day.

DATED: July 31, 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 Kevin St. John, page 12 of 12