Was a 2016 gross receipts tax refund claim timely when the application was hand-delivered on December 30, 2019 but stamped January 3, 2020 and supplemented in April?

Plain-English summary

Copper Canyon Investments proved that its gross receipts tax refund claim was hand-delivered on December 30, 2019, one day before the statutory deadline. The Department was ordered to issue the remaining $8,011.56 refund.

After a 2017 audit, Copper Canyon learned it might have overpaid gross receipts tax. It filed an initial refund claim in late 2017 or early 2018, but the Department returned it as improperly filed because it lacked an explanation and supporting information.

The company prepared a second application around November 2, 2019 for March 2016 through February 2017. A packet containing the supporting documentation was hand-delivered to the Department's Albuquerque office on December 30, 2019. The application itself bore an office stamp dated January 3, 2020.

The Department later requested additional information in March 2020, granted an extension because of the public-health emergency, and received the material in April. It partially granted the original $10,023.51 request by paying $2,011.95 for later periods, but denied $8,011.56 for the 2016 periods solely because it considered the claim complete after the December 31, 2019 deadline.

The hearing officer found the December 30 delivery date more likely than not. Testimony from both company representatives, an affidavit concerning the hand delivery, the sequence of three submissions, and the January 3 stamp all supported that finding. The close stamp date bolstered rather than defeated the delivery evidence because New Year's Day intervened.

The Department did not rebut the showing. Its witness repeatedly said the claim was filed on July 23, 2020, but that was the date of the protest—nearly three months after the April 25 refund denial—and reflected confusion between the two processes.

Under the 2019 version of Section 7-1-26(C), a request for additional information did not make the claim incomplete when the taxpayer supplied enough information for a determination. The Department did make a determination and granted the later-period portion; it identified no substantive defect in the 2016 portion beyond timeliness.

Result: protest GRANTED; the Department had to refund $8,011.56.

What this means for you

Delivery evidence can establish a filing date

An agency date stamp is important, but it may not be conclusive when testimony, affidavits, delivery records, timing, and the surrounding submission history establish an earlier hand delivery.

Keep proof of physical submissions

Signed delivery affidavits, copies of packet contents, contemporaneous notes, receipts, and follow-up communications can decide a limitations dispute.

A later information request need not reset the claim date

The applicable completeness rule focused on whether sufficient information was submitted for the Department to decide the claim, not the last date on which any supplemental document arrived.

Separate the refund claim from the protest

The claim seeks money from the Department; the protest challenges a later denial. Confusing those filing dates can materially change the limitations analysis.

Common questions

Q: What was the filing deadline?
A: December 31, 2019, three years after the end of 2016.

Q: Why didn't the January 3 stamp make the claim late?
A: The total evidence showed the application was inside a packet hand-delivered December 30; the stamp followed within a few business days around the New Year's holiday.

Q: Did Copper Canyon receive any refund before the hearing?
A: Yes. The Department granted $2,011.95 for later periods and disputed only $8,011.56 for 2016.

Q: Did April 2020 supplementation make the claim incomplete until then?
A: No. Under the controlling 2019 language, the claim was not incomplete when sufficient information allowed a determination.

Q: Was there another reason to deny the 2016 refund?
A: No. The Department's stated ground was solely the statute of limitations.

Citations and references

Statutes and regulation:

• NMSA 1978, § 7-1-26(A), (C), and (F) — refund claims, completeness after an information request, and the three-year deadline
• NMSA 1978, § 7-1B-8 — hearing timing
• Regulation 3.1.9.8 NMAC — filing by delivery to the Department

Cases:

• Schneider National, Inc. v. State of New Mexico Taxation and Revenue Department, 2006-NMCA-128 — circumstantial evidence and affidavits proving delivery
• Kilmer v. Goodwin, 2004-NMCA-122 — Department representations do not displace the refund deadline
• Marbob Energy Corp. v. New Mexico Oil Conservation Commission, 2009-NMSC-013 — mandatory effect of “shall”

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Copper Canyon Investments, LLC
• Decision PDF: D&O 21-09

Original ruling text

1 STATE OF NEW MEXICO
2 ADMINISTRATIVE HEARINGS OFFICE
3 TAX ADMINISTRATION ACT

4 IN THE MATTER OF THE PROTEST OF
5 COPPER CANYON INVESTMENTS, LLC
6 TO THE DENIAL OF REFUND
7 ISSUED UNDER LETTER ID NO. L1406019248

8 v. AHO No. 21.01-001R, D&O No. 21-09

9 NEW MEXICO TAXATION AND REVENUE DEPARTMENT

10 DECISION AND ORDER

11 On March 26, 2021, Hearing Officer Dee Dee Hoxie, Esq. conducted a videoconference

12 hearing on the merits of the protest to the denial of refund. The Taxation and Revenue

13 Department (Department) was represented by Kenneth Fladager, Staff Attorney, who appeared by

14 videoconference. Elvis Dingha, Auditor, also appeared by videoconference on behalf of the

15 Department. Copper Canyon Investments, LLC (Taxpayer) was represented by its managing

16 member and employee, Miles Gray and Sherry Gray, who appeared by videoconference. Mr.

17 Gray, Ms. Gray, and Mr. Dingha testified. The Hearing Officer took notice of all documents in

18 the administrative file. Taxpayer’s exhibits #1 (statement); #2 (notes); #3 (Letter L0191436592);

19 #4 (form); #5 (emails); #7 (affidavit); #8 (emails); and #10 (refund application) 1 were admitted

20 without objection. Skipped numbers are the result of proposed exhibits that were disallowed as

21 they duplicated documents, such as the protest and hearing notice, that were already contained in

22 the administrative file.

23 The main issue to be decided is whether the Taxpayer is entitled to a refund for tax

24 periods from March 31, 2016 through November 30, 2016. The Department denied the claim for

25 refund solely based on the statute of limitations. The Hearing Officer considered all of the

1
Citations to exhibits in the decision will be noted as “Ex. #”.
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1 evidence and arguments presented by both parties. Based on the preponderance of the evidence,

2 the Taxpayer’s claim for refund was delivered to the Department on December 30, 2019, so it

3 was made within the three-year statute of limitations, and the Hearing Officer finds in favor of

4 the Taxpayer. IT IS DECIDED AND ORDERED AS FOLLOWS:

5 FINDINGS OF FACT

6 1. On April 25, 2020, under letter id. no. L1406019248, the Department issued a

7 partial denial of refund to the Taxpayer. The Taxpayer applied for a refund of $10,023.51 for the

8 tax periods from March 31, 2016 through February 28, 2017. The refund was partially granted

9 in the amount of $2,011.95. The Taxpayer’s remaining claim for refund of $8,011.56 was denied

10 for the tax periods in 2016 based on the statute of limitations. [Admin. file L1406019248;

11 Testimony of Mr. Dingha].

12 2. On July 23, 2020, the Taxpayer filed a timely written protest to the denial of

13 refund. [Admin. file protest].

14 3. On July 29, 2020, the Department acknowledged its receipt of the protest.

15 [Admin. file L1483732656].

16 4. On January 11, 2021, the Administrative Hearings Office first learned of the

17 Taxpayer’s protest when the Department filed a request for hearing. [Admin. file request].

18 5. On February 5, 2021, a telephonic scheduling hearing was conducted, which was

19 within 90 days of the request as required by statute. [Admin. file].

20 6. The Taxpayer was audited in 2017 and learned that it might be entitled to a refund

21 on gross receipts taxes. [Testimony of Ms. Gray; Ex. #1].

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1 7. Either in late 2017 or early 2018, the Taxpayer filed a claim for refund for the tax

2 periods from December 31, 2014 through February 28, 2017. [Testimony of Ms. Gray; Ex. #1;

3 Ex. #3].

4 8. The Taxpayer’s claim for refund was neither approved nor denied at that time;

5 rather, the Department advised the Taxpayer that its claim was improperly filed as it lacked

6 information on the basis of the refund claim. [Testimony of Ms. Gray; Ex. #3].

7 9. Both before it filed its claim for refund and after it received the rejection of the

8 improperly filed claim, Ms. Gray spoke to Department employees about the process. She

9 inquired about timeframes and was never told that there was a deadline, which she documented

10 with handwritten notes. [Testimony of Ms. Gray; Ex. #2, Ex. #3].

11 10. The Department’s application for refund form does not inform taxpayers of a

12 deadline for filing. [Ex. #4].

13 11. The Department’s letter rejecting the improperly filed claim informed the

14 Taxpayer that it could refile its application for refund, and it advised that “[t]here is a limitation

15 of time to file a claim with the Department pursuant to Section 7-1-26 NMSA 1978.” [Ex. #3].

16 12. On or about November 2, 2019, the Taxpayer prepared a second application for

17 refund for the tax periods from March 2016 to February 2017 and attached documentation as the

18 basis of its claim. [Testimony of Ms. Gray; Testimony of Mr. Gray; Ex. #10].

19 13. On December 30, 2019, a packet of information was delivered to the

20 Department’s office on Central Avenue in Albuquerque, New Mexico on behalf of the Taxpayer.

21 [Testimony of Mr. Gray; Testimony of Ms. Gray; Ex. #7].

22 14. The packet of information included the documentation that formed the basis of the

23 claim for refund. [Testimony of Mr. Gray; Testimony of Ms. Gray].

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1 15. The Taxpayer’s second application for refund was stamped at the Albuquerque

2 office on January 3, 2020. [Ex. #10].

3 16. Based on the totality of the evidence, it is more likely than not that the Taxpayer’s

4 second application for refund was contained in the package delivered to the Albuquerque office

5 on December 30, 2019. [Testimony of Mr. Gray; Testimony of Ms. Gray; Ex. #7; Ex. #10].

6 17. On or about March 13, 2020, the Department requested additional information on

7 the Taxpayer’s claim for refund. [Testimony of Ms. Gray; Ex. #1; Ex. #5].

8 18. The Department granted an extension of time to provide the additional

9 information based on the ongoing public health state of emergency. [Testimony of Ms. Gray,

10 Ex. #5].

11 19. On or about April 10, 2020, the Taxpayer provided additional information to the

12 Department. [Testimony of Ms. Gray; Testimony of Mr. Gray; Ex. #1].

13 20. When the Taxpayer provided the additional information in April 2020, the

14 Department considered the claim for refund to be complete. [Testimony of Mr. Dingha].

15 21. The Department denied the claim for refund for the 2016 tax periods because the

16 refund claim was complete in 2020, which was more than three years past the end of the year in

17 which the tax was originally paid. [Testimony of Mr. Dingha].

18 22. The Department’s denial was based solely on the statute of limitations.

19 [Testimony of Mr. Dingha].

20 DISCUSSION

21 Timeliness of hearing.

22 The Taxpayer argues that the Department did not set a hearing within 90 days of its

23 protest as required by statute. The Taxpayer argues that it asked the Department to set the

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1 protest for a hearing in August or September 2020, and again in November 2020, but the hearing

2 was not requested until January 2021. [Ex. #8; Admin. file request]. Either party may file a

3 request for hearing with the Administrative Hearings Office no earlier than 60 days after the

4 protest was filed, and the Department is required to file a request for hearing within 180 days.

5 See NMSA 1978, § 7-1B-8 (2019). Generally, the deadlines will be calculated from the

6 Department’s acknowledgment of the protest. See 22.600.3.8 NMAC (2018). The Department

7 advised the Taxpayer in its acknowledgment letter that the Taxpayer had the right to request the

8 hearing from the Administrative Hearings Office and that the deadline for requesting a hearing

9 was 180 days. [Admin. file L1483732656]. The Taxpayer never filed a request for hearing with

10 the Administrative Hearings Office. [Admin. file]. The Department filed the request for hearing

11 with the Administrative Hearings Office on January 11, 2021. [Admin. file request]. Using the

12 date that the protest was filed, the 180th day on which to request a hearing was January 19, 2021.

13 Using the date that the protest was acknowledged, the 180th day on which to request a hearing

14 was January 25, 2021. Using either timeframe, the Department’s request for hearing was filed

15 timely.

16 After a request for hearing is filed by the Department, the Administrative Hearings Office

17 is required to set a hearing within 90 days of the request 2. See NMSA 1978, § 7-1B-8. As the

18 Department’s request for hearing was filed on January 11, 2021, the deadline to set a hearing is

19 April 12, 2021 3. A hearing was set and held on February 5, 2021, at which the Taxpayer failed

20 to appear. The hearing on the merits was set and held on March 26, 2021. Therefore, the

21 hearing was held within 90 days of the request for hearing, as required by statute. See id.

2
If a taxpayer files the request, then it is within 120 days from the request or within 90 days of the Department’s
answer, whichever is sooner. See id.
3
The 90th day is April 11, 2021, which falls on a Sunday, so the deadline becomes the following business day,
which is April 12, 2021.
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1 Statute of limitations for claiming a refund.

2 The Taxpayer argues it was not informed of the time limits by the Department’s employees

3 or forms. [Ex. #2, Ex. #3, Ex. #4]. The Taxpayer argues that it would be fundamentally unfair to

4 apply a time limit to it for that reason. A person may claim a refund within the time limits. See

5 NMSA 1978, § 7-1-26 (A) (2019). Generally, the deadline to file a claim for refund is three years

6 from the end of the calendar year in which “the payment was originally due or the overpayment

7 resulted from an assessment.” NMSA 1978, § 7-1-26 (F). Although the Department’s employees

8 may have denied that any timeframe existed for filing a claim, the Department’s letter to the

9 Taxpayer informed it that its first claim for refund was improperly filed as it was incomplete and

10 clearly stated that there was a time limit governed by the statute. [Ex. #3]. See also Kilmer v.

11 Goodwin, 2004-NMCA-122, 136 N.M. 440 (holding that representations by the Department’s

12 employees did not rise to the level of estoppel and that the statute of limitations still applied). The

13 payments for the 2016 tax periods were due in 2016. Therefore, the Taxpayer had three years from

14 the end of 2016 to file its claim for refund. The deadline to file its claim for refund was December

15 31, 2019.

16 Date that the refund claim was filed.

17 The critical issue in this protest is when the second claim for refund was filed. The

18 Taxpayer has consistently stated that it filed its initial claim, that the Department requested more

19 information, that it compiled more information and submitted it to the Department, that the

20 Department then asked for further documentation, that it requested a short extension due to the

21 ongoing public health state of emergency and then provided further documentation, and then the

22 claim was partially denied. [Testimony of Mr. Gray; Testimony of Ms. Gray; Ex. #1; Admin. file

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1 protest]. The documents provided also support the Taxpayer’s general timeline. [Ex. #3; Ex. #5;

2 Ex. #7; Ex. #10].

3 The exact date that the Taxpayer filed its second claim for refund was not explicitly clear

4 from the evidence presented. The Taxpayer argues that it filed its second claim for refund in

5 November 2019, as evidenced by the date it was signed. [Ex. #10]. The Taxpayer argues that the

6 packet delivered to the Department on December 30, 2019 was in response to the Department’s

7 request for further information. [Ex. #5, Ex. #7]. However, it appears that the Department

8 requested additional information from the Taxpayer in March 2020. [Ex. #1, Ex. #5]. It was clear

9 from the evidence that the Taxpayer filed an initial claim for refund that was rejected in 2018 as

10 improper. [Ex. #1, Ex. #3, Testimony of Ms. Gray]. The Taxpayer then compiled more

11 information and resubmitted a claim for refund. [Testimony of Mr. Gray; Testimony of Ms. Gray;

12 Ex. #1; Ex. #10]. The Taxpayer submitted a packet of information to the Department, which was

13 hand-delivered on December 30, 2019. [Testimony of Mr. Gray; Testimony of Ms. Gray; Ex. #7].

14 The Department had certainly received the second claim for refund by January 3, 2020. [Ex. #10].

15 The Department then requested additional information from the Taxpayer, which was provided in

16 April 2020. [Testimony of Mr. Gray; Testimony of Ms. Gray; Testimony of Mr. Dingha; Ex. #5].

17 The Taxpayer provided sufficient evidence to prove that it submitted documents related to its claim

18 for refund to the Department a total of three times: the initial claim that was rejected in 2018, the

19 packet of documents on December 30, 2019, and the additional documentation in April 2020.

20 [Testimony of Mr. Gray; Testimony of Ms. Gray; Ex. #3; Ex. #5; Ex. #7; Ex. #10]. Looking at this

21 evidence in conjunction with the date that the Department stamped the second claim for refund4, the

4
The date stamped was January 3, 2020, which was within a few days of the hand-delivery of documents on
December 30, 2019. December 30, 2019 was a Monday, January 1, 2020 was a federal holiday and fell on a
Wednesday, and January 3, 2020 was a Friday.
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1 Hearing Officer finds it more likely than not that the second claim for refund was contained in the

2 packet of information that was hand-delivered to the Department’s Albuquerque office on

3 December 30, 2019. The totality of the evidence, including circumstantial evidence and affidavit, is

4 sufficient to establish this as a fact by the preponderance. See Schneider National, Inc. v. State of

5 N.M. Taxation and Revenue Dep’t, 2006-NMCA-128, 140 N.M. 561 (holding that affidavits from

6 Department’s employees about their normal mailing practices combined with evidence that the mail

7 was delivered was sufficient prima facie evidence to establish when the mailing occurred). A claim

8 for refund is timely when it is delivered to the Department prior to the expiration of the statutory

9 time limits. See 3.1.9.8 NMAC (2010). Therefore, the Taxpayer’s claim for refund was filed

10 timely. See id. See also NMSA 1978, § 7-1-26.

11 A party relying on service by mail has the burden of proving that the mailing was done. See

12 Myers v. Kapnison, 1979-NMCA-085, ¶ 8, 93 N.M. 215. However, a party may rebut the

13 presumption that notice sent in a properly addressed letter was received. See State Farm Fire and

14 Casualty Co. v. Price, 1984, NMCA-036, ¶ 24, 101 N.M. 438. The Taxpayer is not relying on

15 mailing; it is relying on the hand-delivery of the packet on December 30, 2019. [Testimony of Mr.

16 Gray; Testimony of Ms. Gray; Ex. #7]. Nevertheless, the Department has the opportunity to rebut

17 the evidence presented. The Department argues that the second claim for refund was filed when it

18 was stamped by the Albuquerque office on January 3, 2020. [Ex. #10]. Given the Taxpayer’s

19 evidence that it submitted documents to the Department three times in relation to this refund claim5,

20 the date stamp, by itself, is not sufficient to establish the date of filing. Based on the close proximity

21 of time, the date stamp bolsters the Taxpayer’s claim that it submitted the second packet of

22 documents to the Department on December 30, 2019. The Department’s witness did not assert that

5
The first time that was rejected in 2018, the second time on December 30, 2019, and the final time in April 2020.
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1 the claim was filed in January. [Testimony of Mr. Dingha]. He testified that the second claim for

2 refund was made on July 23, 2020. [Testimony of Mr. Dingha]. That is the date when the protest

3 was filed. [Testimony of Mr. Dingha; Admin. file protest]. As the Department denied the claim for

4 refund on April 25, 2020, almost 90 days prior to July 23, 2020, this testimony is clearly inaccurate.

5 [Admin. file L1406019248]. The Taxpayer and the Department asked a number of questions to try

6 to clarify when the second claim for refund was filed, and the witness continued to assert that the

7 claim was made when the protest was filed6. [Testimony of Mr. Dingha]. The Department failed to

8 rebut the Taxpayer’s evidence.

9 The Department argues the Taxpayer’s claim for refund was not timely because its claim

10 was not complete until it provided the additional information in April 2020. Under a previous

11 version of the statute, when the Department requests additional information, “the claim for refund

12 will not be considered complete until the taxpayer provides the requested documentation.” NMSA

13 1978, § 7-1-26 (C) (2017). Under the current version of the statute7, when the Department requests

14 additional information, “the claim for refund shall not be considered incomplete provided the

15 taxpayer submits sufficient information for the department to make a determination.” NMSA 1978,

16 § 7-1-26 (C) (2019) (emphasis added). Use of the word “shall” indicates that the provision is

17 mandatory, not discretionary. See Marbob Energy Corp. v. N.M. Oil Conservation Comm’n.,

18 2009-NMSC-013, ¶22, 146 N.M. 24. The Taxpayer provided sufficient information as its claim

19 for later tax periods was granted and the only reason for denying the 2016 tax periods was the

20 statute of limitations. [Testimony of Mr. Dingha; Admin. file L1406019248]. Consequently, the

21 Taxpayer’s claim for refund of the 2016 tax periods was not considered incomplete when the

6
The Hearing Officer does not believe that Mr. Dingha was attempting to be deceitful or willfully misleading;
rather, it seems that Mr. Dingha was genuinely confused, did not understand the difference between the claim for
refund and the protest, and was conflating the two processes.
7
Which was in effect at the time that the Taxpayer filed its second claim for refund.
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1 Department requested additional information. See NMSA 1978, § 7-1-26 (C). Therefore, the

2 Taxpayer’s claim for refund was filed timely. See id.

3 CONCLUSIONS OF LAW

4 A. The Taxpayer filed a timely, written protest of the Department’s denial of refund and

5 jurisdiction lies over the parties and the subject matter of this protest.

6 B. The hearing was timely set and held within 90 days of the request for hearing, which

7 was filed timely by the Department. See NMSA 1978, § 7-1B-8 (2019).

8 C. There was sufficient circumstantial evidence in combination with the direct evidence

9 to establish that the Taxpayer’s claim for refund was filed when its packet of information was

10 delivered to the Department on December 30, 2019. See Schneider National, Inc., 2006-NMCA-

11 128. See also 3.1.9.8 NMAC.

12 D. The Taxpayer’s claim for refund was not considered incomplete based on the

13 Department’s request for additional information. See NMSA 1978, § 7-1-26.

14 E. The Taxpayer’s claim for refund was filed within three years of the end of the

15 calendar year when the payment was originally due. See id.

16 F. Since the Taxpayer’s claim for refund was filed timely and there was no other reason

17 for the denial, the refund shall be granted. See id.

18 For the foregoing reasons, the Taxpayer’s protest IS GRANTED. IT IS ORDERED that

19 the Department issue the Taxpayer’s refund of $8,011.56.

20 DATED: April 15, 2021.

21 Dee Dee Hoxie
22 Dee Dee Hoxie
23 Hearing Officer

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1 Administrative Hearings Office
2 P.O. Box 6400
3 Santa Fe, NM 87502

4 NOTICE OF RIGHT TO APPEAL

5 Pursuant to NMSA 1978, Section 7-1-25 (2015), the parties have the right to appeal this
6 decision by filing a notice of appeal with the New Mexico Court of Appeals within 30 days of the
7 date shown above. If an appeal is not timely filed with the Court of Appeals within 30 days, this
8 Decision and Order will become final. Rule of Appellate Procedure 12-601 NMRA articulates
9 the requirements of perfecting an appeal of an administrative decision with the Court of Appeals.
10 Either party filing an appeal shall file a courtesy copy of the appeal with the Administrative
11 Hearings Office contemporaneous with the Court of Appeals filing so that the Administrative
12 Hearings Office may begin preparing the record proper. The parties will each be provided with a
13 copy of the record proper at the time of the filing of the record proper with the Court of Appeals,
14 which occurs within 14 days of the Administrative Hearings Office receipt of the docketing
15 statement from the appealing party. See Rule 12-209 NMRA.

16 CERTIFICATE OF SERVICE

17 On April 15, 2021, a copy of the foregoing Decision and Order was submitted to the parties

18 listed below in the following manner:

19 Email Email

20 INTENTIONALLY BLANK
21
22 John Griego
23 Legal Assistant
24 Administrative Hearings Office
25 P.O. Box 6400
26 Santa Fe, NM 87502

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