Could Harold's Grading preserve an assessment protest postmarked one day after the 90-day deadline because a Department employee initially said “yes” to a January 31 date?

Plain-English summary

Harold's Grading and Trucking lost its right to challenge a gross-receipts-tax assessment because its protest was postmarked one day after the mandatory 90-day deadline. A Department employee's initially ambiguous email did not create statutory estoppel, and the administrative hearing officer lacked power to grant equitable estoppel.

The Department assessed gross receipts tax, penalty, and interest on October 30, 2014. Harold's received the assessment by certified mail on October 31.

Ninety days from service was January 29, 2015. The protest was postmarked January 30.

The 90-day filing rule was jurisdictional

Section 7-1-24(C) required a taxpayer protest within 90 days after mailing or service of an assessment. The mandatory word “shall” left no discretion to accept a late filing.

The cited regulations and cases treated an untimely protest as removing Department authority to consider the assessment challenge. A one-day delay was still late.

The email exchange did not change the deadline

Office manager Antoinette Dominguez asked a Department employee whether Harold's had until January 31. He replied “yes” and said the protest had to be filed within 90 days of the assessment.

Dominguez then requested clarification. A few minutes later, the employee identified October 30 as the assessment date and repeated that filing was due within 90 days of that date.

Although the first answer was somewhat ambiguous, the follow-up supplied the correct assessment date and rule before the deadline.

Neither statutory nor equitable estoppel applied

Statutory estoppel required action based on a personal written ruling from the Secretary that interpreted the relevant statute and showed required legal review. The employee's emails were not such a ruling.

To the extent Harold's sought equitable estoppel, the hearing officer found that remedy belonged to the courts and could not be granted by an administrative agency.

Result: protest DENIED. The late assessment protest was properly rejected. The ruling did not state the assessed dollar amounts and did not decide the underlying tax merits.

The discussion cites the deadline as “NMSA 1978, § 7-2-24(C),” while the conclusions cite Section 7-1-24. This page follows the Tax Administration Act citation used in the conclusions and preserves the original wording below.

What this means for you

Taxpayers receiving an assessment

Record both mailing and service dates immediately, calculate the earliest possible deadline, and file before that date. Do not wait for the final day.

Businesses asking the Department about deadlines

Ask for the exact calendar date, not only a rule description. Independently verify the calculation against the governing statute and preserve the full exchange.

Taxpayers considering estoppel

Informal emails are not the same as a formal Secretary ruling. Also separate remedies an administrative hearing officer can grant from equitable relief available only through a court.

Common questions

Q: When was the assessment served?
A: October 31, 2014.

Q: What was the 90th day after service?
A: January 29, 2015.

Q: When was the protest postmarked?
A: January 30, 2015.

Q: Did the employee say January 31 was acceptable?
A: The first reply began with “yes,” but the employee then clarified that the deadline was 90 days from the October 30 assessment.

Q: Could the hearing officer forgive one late day?
A: No. The decision treated the deadline as mandatory and jurisdictional.

Q: Did the hearing officer decide whether the assessment itself was correct?
A: No. It decided only that the merits protest was untimely.

Citations and references

Statutes and regulations:

• NMSA 1978, § 7-1-24(C) — 90-day assessment-protest deadline
• NMSA 1978, §§ 7-1-60 and 9-11-6.2(B)-(C) — statutory estoppel and formal Secretary rulings
• Regulations 3.1.7.10 and 3.1.7.11 NMAC — rejection and jurisdictional effect of an untimely protest

Cases cited:

• Associated Petroleum Transport v. Shepard, 1949-NMSC-002 — two-day-late statutory protest and lack of jurisdiction
• Lopez v. New Mexico Department of Taxation and Revenue, 1997-NMCA-115 — denial after missing the protest deadline
• Chan v. Montoya, 2011-NMCA-072 — mandatory statutory filing deadline
• AA Oilfield Service v. New Mexico State Corporation Commission, 1994-NMSC-085 — administrative agency cannot grant equitable estoppel
• Marbob Energy Corp. v. New Mexico Oil Conservation Commission, 2009-NMSC-013 — mandatory meaning of “shall”

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Harold’s Grading and Trucking, Co.
• Decision PDF: D&O 15-20

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
HAROLD’S GRADING AND TRUCKING, CO., No. 15-20
TO THE DENIAL OF PROTEST ISSUED UNDER
LETTER ID NO. L1708255184

DECISION AND ORDER

A formal hearing on the above-referenced protest was held May 29, 2015, before Hearing

Officer Dee Dee Hoxie. The Taxation and Revenue Department (Department) was represented by

Mr. Brad Odell, Chief Legal Counsel. Ms. Andrea Umpleby, Auditor, Mr. Tom Dillon, Auditor,

and Mr. Rene Gonzalez also appeared on behalf of the Department. Ms. Antoniette Dominguez,

Officer Manager, and Ms. Sharon Domingez, Owner, appeared on behalf of Harold’s Grading

and Trucking, Co. (Taxpayer). Ms. Antointte Dominguez represented the Taxpayer. All

references to Ms. Dominguez in the body of this decision refer to Ms. Antoinette Dominguez.

The Hearing Officer took notice of all documents in the administrative file. Based on the

evidence and arguments presented, IT IS DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On October 30, 2014, the Department assessed the Taxpayer for gross receipts tax,

penalty, and interest.

2. The Taxpayer received that notice of assessment on October 31, 2014.

3. On January 30, 2015, per the postmark, the Taxpayer filed a formal protest letter.

4. On February 9, 2015, the Department denied the Taxpayer’s protest as it was not filed

timely.

5. Ninety days from the assessment on October 30, 2014 was January 28, 2015. Ninety

days from the service on October 31, 2014 was January 29, 2015.

6. On March 6, 2015, the Taxpayer filed a protest to the denial of the protest to the

assessment.

7. On March 25, 2015, the Department filed a Request for Hearing asking that the

Taxpayer’s protest be scheduled for a formal administrative hearing.

8. On March 27, 2015, the Hearings Bureau issued a notice of hearing. The hearing date

was set within ninety days of the protest.

9. Ms. Dominguez corresponded with the Department on behalf of the Taxpayer regarding

the assessment. Ms. Dominguez believed that they had until January 31, 2015 to file a

protest to the assessment.

10. Ms. Dominguez asked Mr. Gonzalez in an email if they had until January 31, 2015 to file

a protest.

11. Mr. Gonzalez responded by saying yes and that the protest had to be filed within 90 days

of the assessment.

12. Ms. Dominguez replied and asked for clarification on the date of the assessment.

13. Mr. Gonzalez replied that the date of the assessment was October 30, 2014, and that the

protest had to be filed within 90 days of that date.

14. The Department provided a signed certified return receipt from the mailing of the

assessment that showed that the assessment was delivered to the Taxpayer on October 31,

2014.

15. Ms. Dominguez did not understand how to calculate the 90 days and believed that they

had until January 31, 2015.

Harold’s Grading and Trucking, Co.
Letter ID No. L1708255184
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16. Ms. Dominguez felt that by replying yes to her question regarding January 31, 2015, the

Department had misled her as to the deadline and should be estopped from asserting the

90-day deadline.

DISCUSSION

The issue to be decided is whether the Taxpayer’s protest was properly denied as it was

filed more than 90 days after the assessment.

Deadline to file a protest.

“Any protest by a taxpayer shall be filed within ninety days of the date of the mailing to

or service upon the taxpayer by the department of the notice of assessment”. NMSA 1978, § 7-

2-24 (C) (emphasis added). The word “shall” indicates that the provision is mandatory, not

discretionary. See Marbob Energy Corp. v. N.M. Oil Conservation Comm’n., 2009-NMSC-013,

¶ 22, 146 N.M. 24. Any protest that is not filed within the time will not be accepted and divests

the Department of authority to consider the protest. See 3.1.7.10 and 3.1.7.11 NMAC. When a

taxpayer fails to file a protest within that deadline, consideration of the protest is properly

denied. See Lopez v. N.M. Dep’t. of Taxation and Revenue, 1997-NMCA-115, ¶ 6-10, 124 N.M.

270. See also Associated Petroleum Transp. v. Shephard, 1949-NMSC-002, ¶ 6-11, 53 N.M. 52

(holding that a protest filed two days after the statutory deadline for filing was not timely and

that there was no jurisdiction to hear the protest). See also Chan v. Montoya, 2011-NMCA-072,

¶ 7, 150 N.M. 44 (holding that a complaint that was not filed within the statutory deadline for

filing was not timely and should be denied).

The Taxpayer failed to file the protest within 90 days of the service of the assessment.

The Taxpayer’s protest was filed one day late. Therefore, the protest was properly denied.

Estoppel.

Harold’s Grading and Trucking, Co.
Letter ID No. L1708255184
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For statutory estoppel to apply, a taxpayer must establish that their actions were done “in

accordance with any ruling addressed to the party personally and in writing by the secretary”.

NMSA 1978, §7-1-60 (1993). Rulings must be written statements of the secretary that interpret the

statutes to which they relate. See NMSA 1978, § 9-11-6.2 (B) (1995). In order to be effective,

rulings must be reviewed by the attorney general or the Department’s legal counsel and the fact of

the review must be indicated on the ruling. See NMSA 1978, § 9-11-6.2 (C) (1995). Mr.

Gonzalez’s emails to the Taxpayer do not constitute a ruling and statutory estoppel does not apply.

To the extent that the Taxpayer’s arguments might encompass equitable estoppel, they are

overruled as hearing officers cannot grant equitable estoppel. See AA Oilfield Service v. New

Mexico State Corp. Comm’n, 118 N.M. 273, 881 P.2d 18 (1994) (holding that an administrative

agency cannot grant the equitable remedy of estoppel because that power is held exclusively by the

judiciary). Moreover, Mr. Gonzalez’s initial reply to the Taxpayer’s question might be somewhat

ambiguous since he prefaced his reply with “yes”, but his email sent a few minutes later clarified

the requirement that the protest must be filed within 90 days of the October 30, 2014 assessment.

CONCLUSIONS OF LAW

A. The Taxpayer filed a timely written protest to the denial of protest issued under

Letter ID number L1708255184, and jurisdiction lies over the parties and the subject matter of this

protest.

B. The Taxpayer filed its protest to the assessment more than 90 days after the notice of

assessment was served. Therefore, the Taxpayer failed to file a timely protest to the assessment.

See NMSA 1978, § 7-1-24.

C. The protest was properly denied. See id. See 3.1.7.10 and 3.1.7.11 NMAC. See

Lopez v. N.M. Dep’t. of Taxation and Revenue, 1997-NMCA-115.

Harold’s Grading and Trucking, Co.
Letter ID No. L1708255184
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For the foregoing reasons, the Taxpayer's protest is DENIED.

DATED: June 29, 2015.

Dee Dee Hoxie
DEE DEE HOXIE
Hearing Officer
Taxation & Revenue Department
Post Office Box 630
Santa Fe, NM 87504-0630

Harold’s Grading and Trucking, Co.
Letter ID No. L1708255184
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