Could Adecco exclude City of Albuquerque staffing receipts through a Type 9 NTTC, disclosed agency, employee leasing, or out-of-state services?

View original ruling (PDF)

Plain-English summary

Adecco USA's receipts from providing temporary staff to the City of Albuquerque were taxable. A Type 9 NTTC did not cover services, the City did not resell the staffing, Adecco was not the City's disclosed agent or a registered employee-leasing company, and back-office work outside New Mexico produced no separate exempt product.

Adecco had an Albuquerque office and contracted to fill City positions as needed. Its services included recruiting, screening, interviewing, hiring, paying wages and benefits, tracking time, and withholding and reporting payroll taxes.

The Department initially assessed $379,215.79 tax, $75,843.15 penalty, and $33,450.77 interest, totaling $488,509.71. It abated penalty in July 2012.

The Type 9 NTTC did not create a deduction

The City timely executed a Type 9 NTTC. But the certificate stated on its face that it covered tangible personal property only and could not be used to purchase services.

The good-faith safe harbor required more than timely possession. Adecco remained responsible for confirming that the transaction was of a type covered by a certificate and that the buyer would use the service in a nontaxable manner.

The decision held that safe harbor could protect a transaction that actually qualified for a statutory deduction despite a wrong certificate type; it could not transform an otherwise taxable transaction into a deductible one.

No service-resale deduction applied because the City used Adecco's temporary staffing and did not resell it to a third party. The bid documents also said tax determination and payment were Adecco's responsibility and required its hourly rate to include applicable taxes.

Adecco's attempt to bill the City separately for gross receipts tax showed that it had become alert to the issue. The City's refusal to raise the contracted rate did not show that it had misled Adecco about taxability.

Adecco was not a disclosed agent for the City

A disclosed agent needed power to bind the principal in a contract enforceable by a third party. Adecco had no power to bind the City to workers or others, and nothing disclosed to the workers that Adecco acted merely as the City's agent.

Instead, Adecco recruited, evaluated, screened, selected, and hired workers; set position pay rates; paid and guaranteed wages; provided benefits and leave; handled payroll taxes and timekeeping; paid unemployment claims; carried workers' compensation and liability insurance; indemnified the City; and bought $100,000 fidelity bonds for each worker.

The City supplied job descriptions, approved time, directed the work, and could terminate a placement. Those controls did not outweigh Adecco's employer obligations or establish a disclosed agency.

Adecco also disclaimed employee-leasing status and was not registered as an employee-leasing company, so the former joint-employer regulation did not apply.

Out-of-state administration produced no exempt product

Adecco argued that payroll and some recruiting occurred outside New Mexico. Section 7-9-13.1 concerned a product resulting from services performed outside the state and initially used in New Mexico.

The contract produced staffing services, not a separate product. Adecco also maintained a New Mexico office and provided the temporary workers in New Mexico, so the exemption did not apply.

The late amended protest was considered

Adecco added the out-of-state-services argument seven days before the hearing, though the statute contemplated supplementation at least ten days before.

The Department received additional response time, addressed the sole new issue in its brief, and showed no prejudice. The hearing officer therefore overruled the objection and considered the argument.

Result: protest DENIED. With penalty already abated, Adecco remained liable for $379,215.79 gross receipts tax plus interest through payment.

What this means for you

Staffing companies contracting with government

Government-customer status does not automatically exempt staffing receipts. Price the contract for applicable tax and obtain a certificate that corresponds to a real statutory deduction.

Sellers accepting NTTCs

Read the certificate's face and verify the underlying transaction. Timely acceptance does not make an unrelated certificate conclusive when no deduction applies.

Businesses claiming disclosed agency

Contract labels and customer control over daily work are not enough. The ability to bind the principal and actual disclosure to third parties are central, alongside who bears payroll and legal obligations.

Common questions

Q: Was the Type 9 NTTC timely?
A: Yes. It still failed because it covered property rather than services and no underlying service deduction applied.

Q: Did the City control the temporary workers' tasks?
A: Yes. It directed assignments and could terminate placements, but Adecco retained the employment, payroll, benefits, insurance, and indemnity obligations.

Q: Were wages merely pass-through receipts received for the City?
A: No. The decision found no disclosed agency and treated the staffing receipts as Adecco's taxable receipts.

Q: Did Adecco owe the original penalty?
A: No. The Department had abated penalty before the decision; principal and interest remained.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-9-3.5(A), 7-9-3(M), and 7-9-5 — gross receipts, services, and taxable-receipts presumption
• NMSA 1978, §§ 7-9-43(A) and 7-9-48 — NTTC safe harbor and service-resale deduction
• NMSA 1978, § 7-9-3.5(A)(3)(f) and Regulation 3.2.1.19(C) NMAC — disclosed-agency exclusion
• NMSA 1978, § 7-9-13.1(A) — product of services performed outside New Mexico
• NMSA 1978, § 60-13A-3(A) and former Regulation 3.2.1.19(E) NMAC — employee-leasing registration and exclusion
• NMSA 1978, § 7-1-24(B) — supplementing protest grounds

Cases cited:

• McKinley Ambulance Service v. Bureau of Revenue, 1979-NMCA-026 — NTTC safe harbor requires a certificate covering the receipts
• Gas Co. v. O'Cheskey, 1980-NMCA-085 — NTTC does not transform a taxable transaction
• Carlsberg Management Co. v. State, 1993-NMCA-121 — disclosed-agency factors
• Brim Healthcare, Inc. v. State, 1995-NMCA-055 — wage liability and agency analysis
• MPC Ltd. v. New Mexico Taxation and Revenue Department, 2003-NMCA-021 — employee-leasing and joint-employer analysis

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Adecco, Inc.
• Decision PDF: D&O 14-16

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
ADECCO USA, INC. No. 14-16
TO ASSESSMENT ISSUED UNDER
LETTER ID NO. L1550143040

DECISION AND ORDER

A formal hearing on the above-referenced protest was held on October 8, 2013, before

Monica Ontiveros, Hearing Officer. Adecco USA, Inc. (“Taxpayer”) was represented by Marc A.

Simonetti, Esq. and Andrew D. Appleby, Esq. of Sutherland Asbill & Brennan LLP and Michael

Hughes, Esq. of Silva & Gonzales, P.C. Ms. Diane Howell and Ms. Tonya Lain testified on

behalf of Taxpayer. Mr. Simonetti filed an Affidavit of Non-Admitted Lawyer with the Hearings

Bureau and as a non-admitted lawyer complied with Rule 24-106 NMRA. The Taxation and

Revenue Department (“Department”) was represented by Nelson Goodin and Susanne Roubidoux,

attorneys for the Department. Ms. Lizzy Vedamanikam appeared and testified as a witness for the

Department. Taxpayer filed a Brief in Support of Protest Hearing on November 14, 2013 and the

Department filed Taxation and Revenue’s Response to Adecco’s Post Hearing Brief on December

6, 2013.

The Department introduced into the record Exhibits A-C. Taxpayer introduced into the

record Exhibits 1, 2 and 11-20.1 Based on the evidence and arguments presented, IT IS

DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On March 9, 2012, the Department assessed Taxpayer in gross receipts tax in the

amount of $379,215.79 in principal; $75,843.15 in penalty; and $33,450.77 in interest for tax
period January 31, 2004 – September 30, 2010. Letter Id No. L1550143040. Sometime in July

2012, the Department abated penalty.

2. Taxpayer requested an extension to file a protest on April 4, 2012. The extension

of time was granted on April 17, 2012. Letter Id No. L0060104256.

3. On June 6, 2012, Taxpayer filed a protest to the assessment. Taxpayer protested

the disallowance of the deduction or exemption by the Department of the receipts from the City.

Taxpayer raised the issue of good faith in its protest filed on June 6, 2012.

4. On June 12, 2012, the Department acknowledged the protest. Letter Id No.

L0050698560.

5. On June 10, 2013, the Department requested a hearing in this matter.

6. On June 11, 2013, the Hearings Bureau mailed a Notice of Administrative Hearing

setting the hearing for September 9, 2013.

7. Taxpayer requested a continuance on July 17, 2013. The matter was reset for

October 8, 2013.

8. Taxpayer filed an Amended Protest on October 1, 2013. The only new issue raised

in the Amended Protest was whether the services were performed out of state.

9. The Department was provided an additional time to respond to the Amended

Protest.

1
The request for bid begins on pages 20-31 and then appears to skip to pages 260-285.

In the Matter of Adecco USA, Inc.
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10. Taxpayer is a Delaware corporation headquartered in Melville, New York.

Taxpayer is incorporated as a C corporation and had an office in Albuquerque, New Mexico

during the audit period. Exhibit 1, page AN.1; Exhibit 12-8.

11. During the tax period at issue, Taxpayer provided temporary staffing services in

New Mexico, but more specifically for the City of Albuquerque (“City”). Taxpayer and the City

entered into a contract for the provision of the temporary staffing services. The request for bid,

the request for bid response and the contract between the City and Taxpayer outlined the legal

obligations of each party. Exhibits 11, 12 and 13. The contract is incomplete.

12. Taxpayer and the City entered into a contract on or about December 24, 2008 with

an expiration date of November 14, 2009 for temporary staffing services. Exhibit 16-1.2 The

contract was extended through November 14, 2010. Exhibit 14-1; Exhibit 16-1.

13. The City entered into a contract with Taxpayer whereupon, Taxpayer would

provide temporary workers (“employees”3) on an “as needed” basis. Exhibit 13-2, paragraph 2.

14. Taxpayer provided employees to the City to supplement the City’s workforce in

special work situations like employee absences, temporary skill shortages, temporary provision of

specialized professional skills, seasonal workloads and special temporary assignments. Any

employee placed with the City could not work longer than two continuous years for the City.

15. The services that Taxpayer provided to the City included recruiting, selecting,

interviewing, hiring, paying, maintaining a software system that tracked the employees’ hours,

2
Taxpayers’ exhibits are numbered with the exhibit number first followed by a dash and then the page number.
3
The use of the word “employee” is used instead of the word “worker.” No inference should be drawn regarding the
legal relationship between the “employee” and the City.

In the Matter of Adecco USA, Inc.
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compensation and benefits, and withholding and reporting state and federal income tax from the

employees’ paycheck.

16. There were potentially 110 positions or jobs that could be filled by Taxpayer.

Exhibits 11-4 and 11-18.

17. Under the terms of the contract, the City, through an authorized City employee,

would request that a position be filled and Taxpayer had 24 hours in which to provide a qualified

employee for the job position. Exhibit 11-29, paragraph 18 and Exhibit 13-4, paragraph 22.

18. Prior to placing any employee, the City was requested to provide written

authorization signed by the Director of the Department of Finance and Administrative Services

and the City’s Chief Administrative Officer that sufficient funds existed prior to the placement of

the employee. Exhibit 13-2, paragraph 1. The City’s individual departments contacted the

Taxpayer requesting which positions needed filling. Exhibit 13-2, paragraph 4.

19. The City provided Taxpayer with bid descriptions to establish “performance

requirements for the employment of temporary staff personnel.” Exhibit 11-27. The job

descriptions provided by the City were titled “City of Albuquerque Job Description.” Exhibits 11-

32 through 11-134.

20. Taxpayer was required to fill jobs or positions based on the job descriptions

provided by the City. Exhibit 13-4, paragraph 25.

21. Taxpayer recruited and selected employees for the positions with the City. Exhibit

12-62. Taxpayer recruited the employees from referrals, direct mail, recruiting fairs, the internet,

open houses, Xpert online, Adecco Career Accelerator Program, partnership with U.S. Department

In the Matter of Adecco USA, Inc.
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of Labor, print and broadcast advertising, fax broadcasting, poster/flyers, classified ads,

partnership with jobs for America’s graduates, college recruiting, and job centers at airport

locations. Exhibit 12-62.

22. Taxpayer evaluated and selected candidates based on “competence.” Taxpayer

performed a web based assessment on the candidates along with a skills proficiency evaluation to

select employees to be placed with the City. Exhibit 11-29, paragraph 17; Exhibit 12-63; Exhibit

13-4, paragraph 21.

23. Taxpayer screened each applicant prior to placing the applicant in a position with

the City. The screening included an automated application process, a personal interview, a skills

and attitude test, an employer reference check, an employment eligibility verification, an I-9

verification, and a criminal background check. Exhibit 12-66.

24. The City did not participate in the recruiting, screening, testing or any other pre-

placement contact of the employees.

25. The pay rate for each position with the City was set by Taxpayer at the time

Taxpayer responded to the request for bid. Exhibit 11-20.

26. The City required Taxpayer to set out the difference or marginal rate between the

per hour wage Taxpayer paid to the employee in a position and the per hour wage Taxpayer

charged the City for each position at the time Taxpayer responded to the request for bid. Exhibit

11-20; Exhibit 12-33 through 12-38. The hourly rate was determined by the position and not the

employee who filled the position. Exhibit 12-33 through 12-38.

In the Matter of Adecco USA, Inc.
page 5 of 28

27. Taxpayer provided a web based system for approval of hours worked by the

employees and billing to the City. Exhibit 12-73. The employees entered the time into the web or

IVR. Exhibit 12-73. The City employees received an email to approve the hours. Exhibit 12-79.

The City employees approved the time records or modified the hours of employees placed with the

City by Taxpayer. Exhibit 12-79. Taxpayer, then, initiated an invoice to the City. Exhibit 12-79.

Exhibit 13-7, paragraph 41.

28. Taxpayer paid and guaranteed the wages of all the employees placed in positions

with the City. Exhibit 11-20; Exhibit 12-79. Taxpayer issued W-9s to these employees and

withheld state and federal tax from the wages of the employees it placed with the City. Exhibit

12-79. Taxpayer distributed its paychecks to the employees placed with the City. Exhibit 13-7,

paragraph 42.

29. Taxpayer was required to pay for all benefits such as health insurance, life

insurance, etc. Exhibit 11-27, paragraph 6 and Exhibit 13-2, paragraph 10. Taxpayer provided a

comprehensive benefits program which included medical and dental insurance, holiday pay,

service bonus, tuition reimbursement, direct deposit, 401(k) plan, short term disability and term

life insurance. Exhibit 12-68.

30. Taxpayer was required to pay for all holidays. Exhibit 11-27, paragraph 8 and

Exhibit 13-2, paragraph 12.

31. Taxpayer was required to pay for all sick and vacation leave. Exhibit 11-27,

paragraph 7 and Exhibit 13-2, paragraph 11.

In the Matter of Adecco USA, Inc.
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32. The City had unilateral authority to terminate an employee placed in any job

position. Exhibit 11-29, paragraph 19 and Exhibit 13-4, paragraph 23.

33. The City controlled the duties, the assignments and the work product of the

employees placed with the City. (CD 1:21-2:00).

34. Taxpayer’s employees rarely visited the work site of any of the employees placed

with the City. (CD 2:21).

35. If an employee had a dispute between his/her wages, the employee was required to

seek redress from Taxpayer.

36. Taxpayer was required to purchase a fidelity bond for each employee placed with

the City in the amount of $100,000.00 to protect the City from losses of monies, security and other

property caused by the employees placed by Taxpayer with the City. Exhibit 13-2, paragraph 6.

37. The contract between the City and Taxpayer provided that it was the responsibility

of Taxpayer to pay for “all taxes pertaining to employees.” Exhibit 13-2, paragraph 8. The

request for bid reiterated that it was Taxpayer’s responsibility to pay for all taxes pertaining to

employees. Exhibit 11-27, paragraph 4. The request for bid from the City stated that “the hourly

rate (unit price) for all bid items must include all applicable taxes and all other costs associated

with provide this service to the City.” Exhibit 11-4.

38. Taxpayer was required to provide worker’s compensation/employer liability

insurance, bodily injury liability insurance, and comprehensive liability insurance for each

employee placed with the City. Exhibit 13-4, paragraph 19.

In the Matter of Adecco USA, Inc.
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39. Taxpayer was required to pay all unemployment claims of the employees it placed

with the City. Exhibit 11-27, paragraph 5; Exhibit 13-2, paragraph 9.

40. There was no written contract between the City and any of the employees placed by

Taxpayer.

41. Taxpayer agreed to indemnify the City from any and all claims, suits, demands,

actions, or proceedings of every nature and description committed by Taxpayer’s employees while

they were placed with the City. Exhibit 11-275, paragraph L.

42. There was no tax liability for tax years 2004 and 2005. Exhibit 1, page AN1.3.

The Department did not assess Taxpayer for any liability for tax years 2005 through 2007. Exhibit

1, page AN1.4.

43. The Department issued its 60 day letter to Taxpayer on November 16, 2010 and it

required all nontaxable transaction certificates ( nttcs) to be in Taxpayer’s possession on or before

January 15, 2011. Exhibit A.

44. The City executed a Type 9 nttc to Taxpayer dated November 29, 2010. Exhibit

17-1. The nttc was in the possession of Taxpayer in a timely manner.

45. The nttc states on its face that a Type 9 may be used “(f)or the purchase of tangible

personal property only and may not be used for the purchase of services, for the lease of property

or to purchase construction materials for the use in construction projects.” Exhibit 17-1.

46. The City did not resell any of the temporary staffing services sold by Taxpayer to

the City to a third party.

In the Matter of Adecco USA, Inc.
page 8 of 28

47. Taxpayer did not sell tangible personal property for resale in support of a deduction

for a Type 9 NTTC.

48. Taxpayer’s receipts for the services it provided to the City were not deductible,

regardless of the type of nttc executed because its services were not resold to a third party.

49. The Type 9 nttc was not accepted in good faith by Taxpayer.

50. Taxpayer did not perform employee leasing services. Taxpayer’s Brief in Support

of Protest Hearing, page 12.

DISCUSSION

There are multiple issues raised in this protest. The issues presented are: is Taxpayer

entitled to the good faith safe harbor presented in NMSA 1978, Section 7-9-43; was Taxpayer a

disclosed agent for the City; were services provided outside New Mexico; and is Taxpayer

allowed to amend its protest seven days prior to the hearing notwithstanding the Department was

provided additional time to respond to the protest.

Burden of Proof and Standard of Review.

Section 7-1-17(C) provides that any assessment of taxes made by the Department is

presumed to be correct. NMSA 1978, Section 7-1-17(C) (2007). Accordingly, it is Taxpayer’s

burden to present evidence and legal argument to show that it is entitled to an abatement, in full or

in part, of the assessment issued against it. See, TPL, Inc. v. Taxation and Revenue Dep’t, 2000-

NMCA-083, ¶8, 129 N.M. 539, 542, 10 P.2d 3d 863, 866, cert. granted, 129 N.M. 519, 10 P.3d

843, rev’d on other grounds, 2003-NMSC-7, 133 N.M. 447, 64 P.3d, 474. When a taxpayer

presents sufficient evidence to rebut the presumption, the burden shifts to the Department to show

In the Matter of Adecco USA, Inc.
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that the assessment is correct. See, MPC LTD. v. N.M. Taxation and Revenue Dep’t., 2003-

NMCA-021, ¶ 13, 133 N.M. 217, 219-220, 62 P.3d 308, 310-311; Grogan v. New Mexico

Taxation and Revenue Department, 2003-NMCA-033, ¶11, 133 N.M. 354, 357-58, 62 P.3d 1236,

1239-40. Under NMSA 1978, Section 7-1-17(C) (2007), the assessment issued in this case is

presumed to be correct.

Consequently, Taxpayer has the burden to show that the Department’s assessment is

incorrect and establish that it was entitled to the deduction for services. See Archuleta v.

O'Cheskey, 1972-NMCA-165, ¶7, 84 N.M. 428, 431, 504 P.2d 638, 641. The courts have held that

“where 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-024, ¶16, 111 N.M. 735, 740, 809 P.2d 649, 654.

Gross Receipts.

In New Mexico, the general rule is that services performed within the State of New Mexico

are taxable. The term “gross receipts” is broadly defined in § 7-9-3.5(A)(1):

(1) “gross receipts” means the total amount of money or the value of other
consideration received from selling property in New Mexico, from leasing or
licensing property employed in New Mexico, from granting a right to use a franchise
employed in New Mexico, from selling services performed outside New Mexico, the
product of which is initially used in New Mexico, or from performing services in New
Mexico. In an exchange in which the money or other consideration received does not
represent the value of the property or services exchanged, “gross receipts” means the
reasonable value of the property or services exchanged;”

NMSA 1978, Section 7-9-3.5(A) (1) (2003). The Gross Receipts and Compensating Tax Act,

Sections 7-9-1 through 114, defines “service” as “all activities … which activities involve

In the Matter of Adecco USA, Inc.
page 10 of 28
predominately the performance of a service as distinguished from selling or leasing property. … In

determining what a service is, the intended use, principal objective or ultimate objective of the

contracting parties shall not be controlling.” NMSA 1978, Section 7-9-3(M) (2003). The

Supreme Court in 1937 decided in Comer v. State Tax Comm'n, 1937-NMSC-032, ¶37, 41 N.M.

403, 412, 69 P.2d 936, 941 that gross receipts shall include “all activities or acts engaged in

(personal, professional and corporate) or caused to be engaged in with the object of gain, benefit[,]

or advantage either direct or indirect."

In addition thereto, it is presumed that “all receipts of a person engaging in business are

subject to the gross receipts tax.” NMSA 1978, Section 7-9-5 (2002). Therefore, the presumption

is that Taxpayer’s receipts from the services that Taxpayer provided to the City which included

recruiting, selecting, interviewing, hiring, paying compensation and benefits, maintaining a

software system that tracked the employees’ hours and withholding and reporting state and federal

income tax from the employees’ paycheck with the City are presumed to be taxable. NMSA 1978,

Section 7-9-5(A) (2002). Exhibits 12-62.

Good Faith.

Taxpayer argued that its receipts from the City were deductible because it accepted a Type

9 nttc in good faith and therefore, under the safe harbor provision, the Type 9 nttc was conclusive

evidence and the only material evidence, that all of its receipts from the City were deductible.

Section NMSA 1978, §7-9-43(A) (2005) provides that:

[w]hen the seller or lessor accepts a nontaxable transaction certificate within
the required time and in good faith that the buyer or lessee will employ the
property or service transferred in a nontaxable manner, the properly
executed nontaxable transaction certificate shall be conclusive evidence, and

In the Matter of Adecco USA, Inc.
page 11 of 28
the only material evidence, that the proceeds from the transaction are
deductible from the seller's or lessor's gross receipts.

(Emphasis added.) When construing a statute, the statute should be interpreted to give the meaning

the Legislature intended and the interpretation should not render its application absurd, unreasonable,

or unjust. GEA Integrated Cooling Tech v. State Taxation and Revenue Dep’t., 2012-NMCA-010,

¶6, 268 P.3d 48, 51. The courts follow the plain language rule when construing tax statutes. GEA,

2012-NMCA-010, ¶7. In addition, “(w)hen statutory language is clear and unambiguous, this Court

must give effect to that language and refrain from further statutory interpretation.” Marbob Energy

Corp. v. N.M. Oil Conservation Comm’n, 2009-NMSC-013, ¶9, 146 N.M. 24, 28, 206 P.3d 135, 139.

For the safe harbor to apply, the words “good faith” and “nontaxable manner” cannot have an absurd

application and these words must have the intended meaning of the Legislature. The words also must

be read together and in their plainest language.

Thus in reviewing the statute in its most plain and intended meaning, the seller or Taxpayer

was required to accept a nttc in a timely manner and in good faith that the buyer will employ the

service in a nontaxable manner. There is no doubt that Taxpayer accepted a nttc in the required

time.4 However, the inquiry does not end at this point. Regulation 3.2.201.15 NMAC (05/31/01)

provides some guidance on what circumstances must exist prior to the safe harbor applying.

Regulation 3.2.201.15 states that:

Acceptance of [NTTCs] in good faith that the property or service sold
thereunder will be employed by the purchaser in a nontaxable manner is
determined at the time of each transaction. The taxpayer claiming the
protection of a certificate continues to be responsible that the goods delivered

4
The nttc was required to be in Taxpayer’s possession at the time the transaction occurred or no later than 60 days
from the Department’s notice to Taxpayer. NMSA 1978, §7-9-43(A) (2005) and regulation 3.20.201.8(A)(1) and (2).

In the Matter of Adecco USA, Inc.
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or services performed thereafter are of the type covered by the certificate.

Therefore, the determination is made if the buyer is employing the service in a nontaxable manner at

the time of each transaction and the taxpayer has a continued responsibility to make sure that the

service performed is covered by the certificate.

The courts have looked at the good faith safe harbor test. In Leaco Rural Tel. Coop. v.

Bureau of Revenue, 1974-NMCA-076, ¶15, 86 N.M. 629, 632, 526 P.2d 426, 429, the New Mexico

Court of Appeals decided that there are three requirements that must be met “before an NTTC

becomes conclusive evidence that proceeds of a transaction are deductible.” The court analyzed

NMSA 1978, Section 7-9-43(A) (2003)’s predecessor statue, NMSA 1953, Section 72-16A-13(A).

The good faith, safe harbor provision of both statutes is substantially the same. The court found that a

taxpayer must satisfy three statutory requirements before good faith may be applied: “timeliness of

acceptance of the NTTC, good faith acceptance of the NTTC and a properly executed NTTC.”

Leaco, 1974-NMCA-076, ¶15. (There was no issue that the nttc was properly executed.) The court

held that if all three requirements were met, then, the nttc becomes the only material and conclusive

evidence establishing that the taxpayer is entitled to the claimed deduction even when the buyer

improperly “issued” the nttc to the seller. See also, Rainbo Baking Co. v. Commissioner of Revenue,

1972-NMCA-139, 84 N.M. 303, 502 P.2d 406 (taxpayer’s receipts were deductible but taxpayer was

not in possession of the nttcs until after the audit. Since there was no showing of bad faith or that the

certificates were improperly executed, taxpayer’s final presentation of the nttc established that

taxpayer’s claim of good faith was conclusive evidence).

In McKinley Ambulance Serv. v. Bureau of Revenue, 1979-NMCA-026, ¶10, 92 N.M. 599,

In the Matter of Adecco USA, Inc.
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601, 592 P.2d 515, 517, the court, seven years, later held that the good faith safe harbor provision did

not protect a seller from taxation “unless the certificate covered the receipts in question.” This

means that the receipts must be deductible under a particular statutory deduction. The court went on

to say that since there was “no certificate applicable” for the type of services that taxpayer provided,

the Department’s denial of the deduction was proper. McKinley, 1979-NMCA-026, ¶13. Finally eight

years after Leaco the court intimated in Gas Co. v. O'Cheskey, 1980-NMCA-085, ¶12, 94 N.M. 630,

632, 614 P.2d 547, 549 that “[t]he issuance of a ‘Nontaxable Transaction Certificate’ does not operate

to transform an otherwise taxable transaction into a nontaxable transaction.” In Arco Materials v.

Taxation & Revenue Dep't, 1994-NMCA-062, ¶¶9-11, 118 N.M. 12, 15-16, 878 P.2d 330, 333-334,

rev’d on other grounds, 118 N.M. 647, 884 P.2d 803 (1994), the Court of Appeals held that a

taxpayer was not protected by good faith when a change in law rendered the executed nttc invalid for

the transaction in question. See also Proficient Food Co. v. New Mexico Taxation & Revenue Dep't,

1988-NMCA-042, ¶22, 107 N.M. 392, 397, 758 P.2d 806, 811 (taxpayer was not entitled to a

deduction when the nttc form presented was not timely and in the form proscribed by the

Department).

In many ways, these cases are not very instructive since they do not assist with the inquiry of

what good faith means. In Erica, Inc. v. N. M. Regulation and Licensing Dept, 2008-NMCA-065,

¶18, 144 N.M. 132, 140, 184 P. 3d 444, 452, a nontax case, in determining the meaning of good faith

in a different context, the court adopted Black’s Law Dictionary, 701 (7th ed. 1999) definition of good

faith as “(a) state of mind consisting in (1)honesty in belief or purpose, (2) faithfulness to one’s duty

or obligation, (3) observance of reasonable commercial standards of air dealing in a given trade or

In the Matter of Adecco USA, Inc.
page 14 of 28
business, or (4) absence of intent to defraud or to seek unconscionable advantage.”

Therefore in applying the holdings of these cases along with Black’s Law Dictionary’s

definition of good faith along with the statute and regulation, the good faith safe harbor rule applies if

the seller or Taxpayer was able to prove that the transactions were deductible under a specific

statutory deduction, regardless if the nttc is the wrong type and if the nttc was presented timely.

There also must be some evidence of faithfulness to one’s duty or obligation. Taxpayer argued that it

accepted the nttc in good faith because the City was a governmental entity; because the City said in

its request for bid that it would provide a nttc under appropriate circumstances; because the City

executed a number of nttcs to Taxpayer; and because Taxpayer was led to believe by the City that it

the transactions were exempt from gross receipts tax.

By turning first to Taxpayer’s faithfulness to one’s duty, the request for bid did not guarantee

that Taxpayer’s receipts were deductible as suggested by Taxpayer. The request for bid stated that

“(t)he City will, under appropriate circumstances, furnish a non-taxable transaction certificate.”

Exhibit 11-274, paragraph G. Taxpayer failed to cite to the remaining portion of the paragraph which

provides that “(d) etermination of whether the tax is due and payment of the tax is the responsibility

of the Offeror.” Exhibit 11-274, paragraph G. In addition, the contract between Taxpayer and the

City provides in paragraph 8 that it was the responsibility of Taxpayer to pay for “all taxes

pertaining to employees.” Exhibit 13-2. Again, the request for bid reiterated that it was

Taxpayer’s responsibility to pay for all taxes pertaining to employees. Exhibit 11-27, paragraph 4.

The request for bid from the City stated that “the hourly rate (unit price) for all bid items must

include all applicable taxes and all other costs associated with provide this service to the City.”

In the Matter of Adecco USA, Inc.
page 15 of 28
Exhibit 11-4.

There is no evidence the Hearing Officer could find supporting Taxpayer’s contention that

Taxpayer was misled by the City about whether Taxpayer’s receipts were deductible. There was

testimony from Dianne Howell that Taxpayer attempted to bill the City for gross receipts tax but that

the City refused to pay the charge. This testimony is compelling but only to show that Taxpayer was

alerted and at some point that it should have incorporated the gross receipts tax into its price. The

City was unwilling to alter the terms of contract or the marginal rate because Taxpayer failed to

incorporate the gross receipts into the marginal rate. The City required Taxpayer to set out the

difference or marginal rate between the per hour wage Taxpayer paid to the employee in a position

and the per hour wage Taxpayer charged the City for each position at the time Taxpayer responded

to the request for bid. Exhibit 11-20; Exhibit 12-33 through 12-38. The hourly rate was

determined by the position and not the employee who filled the position. Exhibit 12-33 through

12-38. Taxpayer was evaluated based on this marginal rate, which eventually led to Taxpayer

being awarded the contract by the City.

Taxpayer argued that its tax advisors conducted due diligence and therefore, it should be

entitled to the good faith harbor. This is a surprising statement because on the Type 9 nttc, it clearly

states that a Type 9 may be used “(f)or the purchase of tangible personal property only and may

not be used for the purchase of services, for the lease of property or to purchase construction

materials for the use in construction projects.” Exhibit 17-1. Taxpayer is correct in stating that a

Type 9 nttc may be issued by a governmental entity. However, the nttc clearly states that it may

In the Matter of Adecco USA, Inc.
page 16 of 28
only be used for the purchase of tangible personal property and may not be used for the purchase

of services.

The Department argued that the good faith safe harbor may only be utilized if a deduction is

available to a taxpayer. In other words, the good faith safe harbor applies in situations where a

taxpayer had a timely nttc in his or her possession but the nttc was of the wrong type. The transaction

was deductible but for the wrong type of nttc in the possession of taxpayer. The Hearing Officer

agrees with this position. In reading the line of cases beginning with Leaco, McKinley Ambulance

Serv. and Gas Co., the underlying transaction must be deductible before the good faith safe harbor

can apply. To allow the good faith safe harbor to apply where no deduction (or exemption) applies,

would render all of the deductions within the Gross Receipts Tax Act meaningless. If the good faith

safe harbor applied regardless if the transaction was eligible for a deduction, then anyone who

erroneously believed the transaction was deductible, would argue that the good faith safe harbor was

conclusive proof that it is deductible. There also would be no incentive for taxpayers to determine

whether their transactions were truly deductible. Therefore, Taxpayer did not submit sufficient

evidence to rebut the presumption that the transactions were deductible under the good faith safe

harbor provision.

No Deduction Applies.

Even assuming Taxpayer had the correct nttc, a Type 5 (Taxpayer had a Type 9 nttc), for the

resell of a service, in reviewing a summary of the transactions in the Department’s audit narrative

(Exhibits A and 1), the receipts from the City are not deductible under NMSA 1978, §7-9-48 (2000),

because the City did not resell any of the temporary staffing services sold by Taxpayer to the City

In the Matter of Adecco USA, Inc.
page 17 of 28
to a third party. For a transaction to be deductible under Section 7-9-48, the buyer of the services

must “resell the service in the ordinary course of business and the resale must be subject to the

gross receipts tax.” Since there was no resell of the service, this deduction does not apply to

Taxpayer’s transactions.

Disclosed Agent.

Taxpayer argued in the alternative, that while the receipts that it received from the City

were gross receipts, the receipts were not taxable to Taxpayer because an exemption applied to the

receipts or that Taxpayer received these receipts in a disclosed agency capacity for the City

pursuant to NMSA 1978, §7-9-3.5(A)(3)(f) (2010).5 Section 7-9-3.5(A)(3)(f) states that excluded

from gross receipts are “amounts received solely on behalf of another in a disclosed agency

capacity.” The Department defines what the test is to determine whether an agency relationship

exists. Regulation 3.2.1.19(C) (1) NMAC (12/30/03) provides that “(a)n agency relationship

exists if a person has the power to bind a principal in a contract with a third party so that the third

party can enforce the contractual obligation against the principal.” Taxpayer argued that all of its

receipts from the City should be exempted and that it had the same type of agency relationship as

in Carlsberg.

There are three relevant cases that analyze when a taxpayer is exempt from gross receipts

taxes because it acted in an agency relationship with the buyer of employee services. These cases

are somewhat similar to this matter. In the three cases Carlsberg, Brim and MPC LTD., there was

a triangular relationship between three parties whereby one of the parties was the seller of

5
The Hearing Officer applied the statute and the regulation in place at the time the tax was due. See, Kewanee Indus.

In the Matter of Adecco USA, Inc.
page 18 of 28
management or employment services, there was ultimate buyer of those services and the

employees themselves. Carlsberg is dissimilar from Brim and MPC LTD., insofar, as there were

different legal responsibilities of the agent and this is the only case where the court held that a

disclosed agency existed. In each case, there were employees who were employed by the taxpayer

but worked at the facility of the buyer. In each case, the seller of services argued that the receipts

it received from the buyer should be exempted because it paid wages to the employees who

worked at the facility of the buyer.

A real quick review of these cases is warranted to determine whether an agency

relationship existed in this case. When Carlsberg Mgmt. Co. v. State, 1993-NMCA-121, 116

N.M. 247, 861 P.2d 288 was decided, there was no specific statutory exemption allowing the

reimbursement amounts to be exempted from gross receipts. The Department, as a matter of

policy, allowed for reimbursed expenses to be exempted so long as the agency relationship was

disclosed. In Carlsberg the court held that it was a factual determination whether there was an

agency relationship between the principal and the agent. The factors the court considered were

whether there “a principal’s control over the agent” is present; and whether the “agent could bind

the principal in dealings with third parties.” Carlsberg, 1993-NMCA-121, ¶12. The court was not

concerned with who paid the employees, but who had the discretion in manner other than by the

terms of the agency relationship. Carlsberg, 1993-NMCA-121, ¶19. The Carlsberg court also

looked at the indemnification clause in the contract which provided that the owner was the

ultimate party responsible for wages. Carlsberg is the only case where the court has found that

Inc. v. Reese, 1993-NMSC-006, 114 N.M. 784, 845 P.2d 1238.

In the Matter of Adecco USA, Inc.
page 19 of 28
there was an agency relationship between a seller and buyer of management services.

Carlsberg was followed by Brim Healthcare, Inc. v. State, 1995-NMCA-055, 119 N.M.

319, 896 P.2d 498, where the court held that there was no agency relationship between the buyer

and the seller of management type services. In Brim, the court looked at whether the taxpayer was

legally liable for paying the wages of the employees. In Brim, the court held that because the

taxpayer was legally responsible for paying the wages of the employees and because there was no

broad indemnification clause which required to seller to pay the wages, the court held that the

taxpayer was liable for the gross receipts taxes.

Finally, the court of appeals took another look at the issue of agency relationship in MPC

LTD. v. New Mexico Taxation and Revenue Department, 2003-NMCA-021, 133 N.M. 217, 62

P.3d 308. In MPC LTD., the court looked at a regulation, 3.2.1.19(E) that allowed for an

exemption of gross receipts tax if the taxpayer was a “joint employer” and was engaged in

“employee leasing.” This paragraph of the regulation was repealed on September 30, 2010 and

examples 7 and 8 were added to regulation 3.2.1.19(C). Examples 7 and 8 of regulation

3.2.1.19(C) attempt to distinguish between a seller who is receiving receipts as an agent from

performing management type of functions and the receipts of a temporary employee agency,

wherein all the receipts are considered receipts. Regulation 3.2.1.19(C)(1) and 3.2.1.19(C)(2)

remained largely unchanged except for subparagraph numbering. Since the version of regulation

3.2.1.19(E) was in effect when the tax became due for all tax periods, this older version of the

regulation is applied to Taxpayer.

In the Matter of Adecco USA, Inc.
page 20 of 28
In applying Section 7-9-3(F)(2)(f) and regulation 3.2.1.19(E)(1) and (2) (repealed in

September 30, 2010), the central inquiry is whether Taxpayer was engaged in the employee

leasing business and was a joint employer for the City. There is no evidence to suggest that

Taxpayer was an employee leasing agency, since it was not registered as an employee leasing

agency. NMSA 1978, Section 60-13A-3(A)(2010). Since Taxpayer is not in the employee leasing

business, this repealed regulation, 3.2.1.19(E) does not apply to Taxpayer.

The only inquiry left is twofold: whether Taxpayer was an agent for the City and had the

power to bind the City in a contract and whether the City or Taxpayer had disclosed to the

employees placed with the City that Taxpayer was their employer or merely an agent for the City.

There is no evidence that Taxpayer had the power to legally bind the City in a contract with a third

party or the employees and that the third party or the employees, could enforce any legal

obligations against the City. Instead the facts show that Taxpayer was the employees employer

with zero disclosure to the employees that Taxpayer was the agent for the City.

A review of the evidence presented is warranted. The request for bid provided by

Taxpayer, clearly states that Taxpayer was required to provide worker’s compensation/employer

liability insurance, bodily injury liability insurance, and comprehensive liability insurance for each

employee placed with the City. Exhibit 13-4, paragraph 19. Taxpayer was also required to pay all

unemployment claims of the employees it placed with the City. Exhibit 11-27, paragraph 5;

Exhibit 13-2, paragraph 9. In addition, Taxpayer agreed to indemnify the City from any and all

claims, suits, demands, actions, or proceedings of every nature and description committed by

Taxpayer’s employees while they were placed with the City. Exhibit 11-275, paragraph L.

In the Matter of Adecco USA, Inc.
page 21 of 28
Taxpayer was required to purchase a fidelity bond for each employee placed with the City in the

amount of $100,000.00 to protect the City from losses of monies, security and other property

caused by the employees placed by Taxpayer with the City. Exhibit 13-2, paragraph 6. These

written contractual obligations between the City and Taxpayer indicate that if the legal recourse

for employees placed with the City was to seek redress from Taxpayer for both unemployment and

worker’s compensation injuries. In addition, if any of these employees committed any tortious

acts, Taxpayer was legally responsible for defending and paying any damages. The fidelity bond

Taxpayer purchased insured that the City could collect damages against Taxpayer for the

employees’ acts.

The second part of the test under the statute and the regulation is whether there was any

disclosure by either the City or Taxpayer that Taxpayer was an agent for the City. In reviewing

the services that Taxpayer provided to the City, the employees could only have believed that

Taxpayer was their employer. Taxpayer recruited, selected, interviewed, hired, paid compensation

and benefits, maintained a software system that tracked the employees’ hours, and withheld and

reported state and federal income tax from the employees’ paycheck. Taxpayer recruited the

employees from referrals, direct mail, recruiting fairs, the internet, open houses, Xpert online,

Adecco Career Accelerator Program, partnership with U.S. Department of Labor, print and

broadcast advertising, fax broadcasting, poster/flyers, classified ads, partnership with jobs for

America’s graduates, college recruiting, and job centers at airport locations. Exhibit 12-62.

Taxpayer evaluated and selected candidates based on “competence.” Taxpayer performed a web

based assessment on the candidates along with a skills proficiency evaluation to select employees

In the Matter of Adecco USA, Inc.
page 22 of 28
to be placed with the City. Exhibit 11-29, paragraph 17; Exhibit 12-63; Exhibit 13-4, paragraph

21. Taxpayer screened each applicant prior to placing the applicant in a position with the City.

The screening included an automated application process, a personal interview, a skills and

attitude test, an employer reference check, an employment eligibility verification, a I-9

verification, and a criminal background check. Exhibit 12-66. In reviewing the documents

provided by Taxpayer, there was no mention that Taxpayer was an agent for the City. In the

recruiting, hiring and selection process, the employees primarily dealt with Taxpayer and its

employees.

Taxpayer argued that the City “defined the responsibilities” of both Taxpayer and the City.

Brief, page 2. This statement “defining the responsibilities” does not assist with the test of

whether the employees believed that Taxpayer was an agent for the City. These responsibilities

were no more than part of the process in place for placing the employees with the City and paying

them. Taxpayer chose which employees to recruit, select and hire and it was Taxpayer that filled

potentially 110 positions or jobs. Exhibit 11-4 and 11-18. Taxpayer could not fill a position until

the City, through an authorized City employee, would request a position be filled and Taxpayer

had 24 hours in which to provide a qualified employee for the job position. Exhibit 11-29,

paragraph 18 and Exhibit 13-4, paragraph 22.6 Prior to placing any employee, Taxpayer was

notified if the Director of the Department of Finance and Administrative Services and the City’s

Chief Administrative Officer in writing confirmed that sufficient funds existed prior to the

placement. Exhibit 13-2, paragraph 1. It was only after the Director confirmed there was

6
Taxpayer argued that the City determined which candidate to hire for the position. Brief, page 2. However, the

In the Matter of Adecco USA, Inc.
page 23 of 28
sufficient funds, that the City’s individual departments contacted the Taxpayer with which

positions needed filling. Exhibit 13-2, paragraph 4

Taxpayer argued that it was the City that controlled the work and performance of the

employees. The City did provide job descriptions to establish “performance requirements for the

employment of temporary staff personnel.” Exhibit 11-27. The job descriptions provided by the

City were titled “City of Albuquerque Job Description.” Exhibits 11-32 through 11-134. This fact

alone does not assist with the general inquiry of whether the employees believed that Taxpayer

was their employer or merely an agent for the City. There is no evidence that the employees ever

saw a City of Albuquerque job description.

The employees only dealt with Taxpayer for pay issues. The pay rate for each position

with the City was set by Taxpayer at the time Taxpayer responded to the request for bid. Exhibit

11-20. The City only required Taxpayer to set out the difference or marginal rate between the per

hour wage Taxpayer paid to the employee in a position and the per hour wage Taxpayer charged

the City for each position at the time Taxpayer responded to the request for bid. Exhibit 11-20;

Exhibit 12-33 through 12-38. The hourly rate was determined by the position and not the

employee who filled the position. Exhibit 12-33 through 12-38. It was Taxpayer who provided a

web based system for approval of hours worked by the employees and billing to the City. Exhibit

12-73. The employees entered the time into the web or IVR. Exhibit 12-73. The City employees

received an email to approve the hours. Exhibit 12-79. The City employees approved the time

records or modified the hours of employees placed with the City by Taxpayer. Exhibit 12-79.

exhibits suggest otherwise.

In the Matter of Adecco USA, Inc.
page 24 of 28
Taxpayer, then, initiated an invoice to the City. Exhibit 12-79. Exhibit 13-7, paragraph 41.

Finally it was Taxpayer who paid the wages of all the employees placed in positions with the City.

Exhibit 11-20; Exhibit 12-79. Taxpayer issued W-9s to these employees and withheld state and

federal tax from the wages of the employees it placed with Taxpayer. Exhibit 12-79. Taxpayer

distributed its paychecks to the employees placed with the City. Exhibit 13-7, paragraph 42.

Taxpayer also was required to pay for all benefits such as health insurance, life insurance, etc.

Exhibit 11-27, paragraph 6 and Exhibit 13-2, paragraph 10. Taxpayer provided a comprehensive

benefits program which included medical and dental insurance, holiday pay, service bonus, tuition

reimbursement, direct deposit, 401(k) plan, short term disability and term life insurance. Exhibit

12-68. Taxpayer was required to pay for all holidays. Exhibit 11-27, paragraph 8 and Exhibit 13-

2, paragraph 12. Taxpayer was required to pay for all sick and vacation leave. Exhibit 11-27,

paragraph 7 and Exhibit 13-2, paragraph 11.

Taxpayer is correct and the Hearing Officer agrees that the City had unilateral authority to

terminate an employee placed in any job position. Exhibit 11-29, paragraph 19 and Exhibit 13-4,

paragraph 23. The City controlled the duties, the assignments and the work product of the

employees placed with the City. Taxpayer’s employees did not supervise the employees and

visited the work site of any of the employees placed with the City on a quarterly basis. However,

this is insufficient evidence to prove that the employees knew that Taxpayer was the City’s agent.

Services Performed Outside of New Mexico.

Taxpayer argued that because it was headquarter in Delaware, that some of the services it

performed for the City were performed outside of New Mexico and therefore exempt from gross

In the Matter of Adecco USA, Inc.
page 25 of 28
receipts taxes. The services that Taxpayer claimed were performed outside of New Mexico were

the payroll activities and some of the recruiting activities. Brief, page 19-20. Taxpayer cites to

Section 7-9-13.1(A) to support its position. Section 7-9-13.1(A) provides that “exempted from the

gross receipts tax are the receipts from selling services performed outside New Mexico the product

of which is initially used in New Mexico.” NMSA 1978, Section 7-9-13.1(A)(1989).

This statute does not apply to Taxpayer. Taxpayer did not produce a product which was

the result of a service performed outside of New Mexico. During the tax period in question,

Taxpayer had an office in Albuquerque and employees. Taxpayer contracted with the City with no

product that resulted from the contract, only services. This exemption does not apply to Taxpayer.

Amended Protest.

The Department argued that it was unfair for Taxpayer to file an amended protest seven

days before the hearing and that it violated Section 7-1-24. Section 7-1-24(B) provides that

“…the taxpayer may supplement the statement at any time prior to ten days before any hearing

conducted on the protest…” NMSA 1978, Section 7-1-24(B) (2013). The statute attempts to

balance the taxpayer’s right to present its case before the Hearings Bureau and the Department’s

ability to respond to the arguments made by a taxpayer. In this case, the choices were to move the

hearing date to meet the 10 day requirement for protests to be amended or to continue the hearing

and allow the Department additional time to present its case. The Department did not request

additional time to respond to Taxpayer’s arguments and in fact filed a brief responding to all of

Taxpayer’s arguments. There was only one new issue raised in the Amended Protest, which the

Department raised in its brief. The Department almost appears to be arguing that Taxpayer is

In the Matter of Adecco USA, Inc.
page 26 of 28
stuck with the arguments it originally made in its protest filed on June 2012 almost forgetting that

the solution to the seven day versus 10 day issue was to move the hearing. In light of allowing a

taxpayer the greatest opportunity to respond and defend itself in a hearing, the objection by the

Department is again overruled.

CONCLUSIONS OF LAW

A. Taxpayer filed a timely written protest on June 6, 2012 to the assessment issued

under Letter Id No. L1550143040 and jurisdiction lies over the parties and the subject matter of this

protest.

B. Taxpayer did not receive a Type 9 nttc in good faith from the City.

C. The Type 9 nttc Taxpayer received from the City was not conclusive evidence that its

receipts from the City were deductible.

D. No specific statutory deduction applied to the receipts received by Taxpayer from the

City.

E. The City did not resell the services it purchased from Taxpayer.

F. Taxpayer was not a disclosed agent for the City and its receipts were not exempt.

G. Taxpayer was not engaged in employee leasing services with the City.

H. Taxpayer did not perform its services outside of New Mexico.

I. The Department was not prejudiced in any way by allowing Taxpayer to amend its

protest seven days prior to the hearing.

J. Taxpayer did not present sufficient evidence to prove it was entitled to either an

exemption or a deduction.

In the Matter of Adecco USA, Inc.
page 27 of 28
K. Interest is due and owing on the principal amount of tax due until the date the

principal is paid.

L. Taxpayer owes gross receipts tax in the amount of $379,215.79 in principal and

interest accrued through date of payment in interest for tax period January 31, 2004 – September

30, 2010.

For the foregoing reasons, the Taxpayer's protest is DENIED.

DATED: May 22, 2014.

Monica Ontiveros
Hearing Officer
Taxation & Revenue Department
Post Office Box 630
Santa Fe, NM 87504-0630

NOTICE OF RIGHT TO APPEAL

Pursuant to NMSA 1978, Section 7-1-25 (1989), Taxpayer has the right to appeal this

decision by filing a notice of appeal with the New Mexico Court of Appeals within 30 days of the

date shown above. See, Rule 12-601 NMRA. If an appeal is not filed within 30 days, this

Decision and Order shall become final. A copy of the Notice of Appeal should be mailed to John

Griego, Taxation & Revenue Hearings Bureau at P.O. Box 630 Santa Fe, New Mexico 87504-

630. Mr. Griego may be contacted at 505-827-0466.

In the Matter of Adecco USA, Inc.
page 28 of 28