I overpaid my New Mexico gross receipts tax — how long do I have to claim a refund before it's too late?

Plain-English summary

Battery Systems, Inc. files and pays its New Mexico gross receipts tax (GRT) monthly. For the periods April 30 through November 30, 2019, it filed and paid on time. Later it discovered it had overpaid — some of its sales were actually exempt — and in 2023 it filed a claim for refund. The Department granted the refund for the later periods (after November 30, 2019) but denied $6,104.48 for the April–November 2019 periods. The Hearing Officer denied the protest, agreeing the 2019 claim was too late.

The reason is a hard deadline. Under NMSA 1978, Section 7-1-26(F), a refund claim generally must be filed within three years of the end of the year in which the tax was originally due. Battery Systems' 2019 tax was due in 2019, so the three-year clock ran out on December 31, 2022. Because the refund claim wasn't made until 2023, it was "stale" and barred by the statute of limitations — regardless of the fact that the overpayment itself was real. As the Hearing Officer explained (citing Kilmer v. Goodwin), the limitation period exists to prevent stale claims and puts the responsibility on the taxpayer, who is best positioned to track its own refund rights, to act in time.

What this means for you

Anyone who thinks they overpaid gross receipts tax

Move quickly. New Mexico's refund window is three years from the end of the year the tax was due, not three years from when you discover the mistake. Overpaying on exempt or deductible sales doesn't extend the clock — if the deadline passes, a valid refund simply disappears.

Monthly GRT filers

Each month's tax is "due" in the year of the taxable event. For 2019 liabilities the whole year's refund window closed on December 31, 2022. Track your earliest open period so you don't lose the oldest months first.

Businesses reviewing past returns for exemptions

If a review turns up exempt sales you taxed by mistake, file the refund claim as soon as you can. Battery Systems recovered the still-open later months but permanently lost the 2019 months that had already aged out.

Tax professionals

This is a clean Section 7-1-26(F) application: the three-year period runs from the end of the calendar year of the due date, and an untimely refund claim is barred even when the overpayment is undisputed (Kilmer v. Goodwin; Sisters of Charity v. County of Bernalillo). The taxpayer bears the burden of proof under 22.600.3.24(B) NMAC.

Common questions

Q: My overpayment was real — why can't I get it back?
A: Because the refund claim was filed after the three-year statute of limitations expired. New Mexico bars stale refund claims regardless of the merits, so a late claim on a genuine overpayment is still denied.

Q: When exactly does the three-year clock start?
A: At the end of the calendar year in which the tax was originally due. For gross receipts tax due during 2019, the three years ran from December 31, 2019 and expired on December 31, 2022.

Q: I discovered the error only recently. Doesn't the clock start then?
A: No. The deadline runs from when the tax was due, not from when you found the mistake. The statute puts the burden on the taxpayer to identify and pursue refunds in time.

Q: Why did some of my refund get paid but not the rest?
A: The Department paid the periods still within the three-year window (after November 30, 2019) and denied only the older 2019 periods that had aged out. Different months age out on their own schedule.

Q: Can I rely on this decision for my own situation?
A: Not directly. A Decision and Order resolves one taxpayer's protest on its specific facts and is not a general ruling or advisory opinion of the Department. It does illustrate how strictly the refund deadline is enforced.

Citations and references

Statutes and rules:

• NMSA 1978, § 7-1-26(F) — three-year statute of limitations to claim a refund
• NMSA 1978, § 7-9-11 (1969) — gross receipts tax due the 25th of the month following the taxable event
• NMSA 1978, § 7-1-13(B) (2021) — returns due the same date the tax is due
• NMSA 1978, § 7-1B-8 (2019) — protest jurisdiction; 90-day hearing requirement
• Regulation 22.600.3.24(B) NMAC (2020) — the taxpayer has the burden of proof

Cases:

• Kilmer v. Goodwin, 2004-NMCA-122 (the limitation period prevents stale claims and places the onus on the taxpayer to file in time)
• Sisters of Charity v. County of Bernalillo, 1979-NMSC-044 (an untimely refund claim is barred by the statute of limitations)

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Battery Systems Inc
• Decision PDF: D&O 24-14

Original ruling text

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

4 BATTERY SYSTEMS, INC.
5 v. AHO No. 24.07-020R
6 TAXATION AND REVENUE DEPARTMENT D&O No. 24-14

7 DECISION AND ORDER
8 On September 19, 2024, Hearing Officer Dee Dee Hoxie, Esq. conducted a

9 videoconference hearing on the merits of the protest to the denial of refund. The Taxation and

10 Revenue Department (Department) was represented by Timothy Williams, Staff Attorney. Cheryl

11 Tafoya, Auditor, also appeared by videoconference on behalf of the Department. Battery

12 Systems, Inc. (Taxpayer) was represented by its accounting manager, Chris Fernandez, who

13 appeared by internet and telephone with another representative, Manny Almeida, by

14 videoconference. Mr. Almeida and Ms. Tafoya testified. The Hearing Officer took notice of all

15 documents in the administrative file. The Department’s exhibits A (the refund application) and

16 C (the protest) were admitted.

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

18 periods from April 30, 2019 through November 30, 2019. The Hearing Officer considered all of

19 the evidence and arguments presented by both parties. Because the Taxpayer’s claim for refund

20 was filed beyond the three-year statute of limitations, the Hearing Officer finds in favor of the

21 Department. IT IS DECIDED AND ORDERED AS FOLLOWS:

22 FINDINGS OF FACT

23 Procedural findings.

24 1. On October 11, 2023, the Department issued a denial of refund to the Taxpayer.

25 The Taxpayer’s refund claim was denied for $6,104.48 for the tax periods from April 30, 2019

26 through November 30, 2019. [Admin. file L1005955696; Testimony of Ms. Tafoya].
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1 2. On October 11, 2023, the Taxpayer filed a timely written protest to the denial of

2 refund. [Exhibit C].

3 3. On January 31, 2024, the Department acknowledged its receipt of the protest.

4 [Admin. file L1587320432].

5 4. On July 16, 2024, the Department filed a request for hearing with the

6 Administrative Hearings Office. [Admin. file request].

7 5. The hearing on the merits was conducted on September 19, 2024, which was

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

9 Substantive findings.

10 6. The Taxpayer files and pays its gross receipts tax monthly. [Testimony of Ms.

11 Tafoya].

12 7. The Taxpayer’s gross receipts tax and return are due on the 25th of the month

13 following when the taxable transaction took place. [Testimony of Ms. Tafoya]. See also NMSA

14 1978, § 7-9-11 (1969) (indicating that gross receipts tax is due on the 25th of the month following

15 the taxable event). See also NMSA 1978, § 7-1-13 (B) (2021) (indicating that returns are due the

16 same date as the tax is due).

17 8. The tax periods from April 30, 2019 through November 30, 20191 all have tax

18 dues dates in 2019. [Testimony of Ms. Tafoya].

19 9. Three years from the end of 2019 was December 31, 2022. [Testimony of Ms.

20 Tafoya].

21 10. The Taxpayer timely filed and paid its gross receipts tax for the tax periods.

22 [Testimony of Ms. Tafoya].

1
Throughout the decision, references to “the tax periods” mean from April 30, 2019 through November 30, 2019.
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1 11. Later, the Taxpayer learned that it had been overreporting its gross receipts tax

2 liability as some of its sales were exempt. [Testimony of Mr. Almeida].

3 12. The Taxpayer filed a claim for refund based on its conclusion that some of its

4 sales were exempt. [Testimony of Mr. Almeida].

5 13. Part of the Taxpayer’s claim for refund, for tax periods after November 30, 2019,

6 was granted. [Testimony of Ms. Tafoya].

7 14. The Taxpayer’s claim for refund on the tax periods was made for the first time in

8 2023. [Testimony of Ms. Tafoya; Exhibit A].

9 15. The Department denied the claim for refund on the tax periods because it was

10 made after the statute of limitations had run out. [Testimony of Ms. Tafoya].

11 DISCUSSION

12 Burden of proof.

13 “The taxpayer shall have the burden of proof, except as otherwise provided by law.”

14 22.600.3.24 (B) NMAC (2020).

15 Statute of limitations for claiming a refund.

16 Generally, a claim for refund must be made within three years of the end of the year in

17 which the tax was originally due. See NMSA 1978, § 7-1-26 (F). The Taxpayer did not dispute that

18 the tax was due and paid monthly in 2019. Three years from the end of 2019 was December 31,

19 2022. The Taxpayer’s claim for refund was made in 2023, which was past the three-year deadline

20 for taxes paid in 2019. [Testimony of Ms. Tafoya]. The statute of limitations prevents stale

21 claims and effectively places the onus on the taxpayer to pursue their claim in a timely manner

22 because the taxpayer is the one who can more easily keep track of their claims for refund. See

23 Kilmer v. Goodwin, 2004-NMCA-122, ¶ 16, 136 N.M. 440. If the claim is not filed within the

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1 three-year statute of limitations, the claim is barred by the statute. See NMSA 1978, § 7-1-26.

2 See also Kilmer, 2004-NMCA-122. See also Sisters of Charity v. County of Bernalillo, 1979-

3 NMSC-044, ¶ 24-28, 93 N.M. 42 (holding that an untimely filed claim for refund was barred by

4 the statute of limitations).

5 As the Taxpayer’s claim for the 2019 tax periods was made in 2023, it was made beyond the

6 statute of limitations. See NMSA 1978, § 7-1-26. Therefore, the Taxpayer’s claim was stale and

7 was barred by the statute. See id. See also Kilmer, 2004-NMCA-122.

8 CONCLUSIONS OF LAW

9 A. The Taxpayer filed a timely written protest of the denial of refund, and jurisdiction

10 lies over the parties and the subject matter of this protest. See NMSA 1978, § 7-1B-8 (2019).

11 B. The hearing was timely set and held within 90 days of the request for hearing. See

12 id. See also 22.600.3.8 NMAC (2020).

13 C. The Taxpayer’s claim for refund on the tax due and paid monthly in 2019 was

14 barred by the statute of limitations as it was not made within three years of the end of 2019. See

15 NMSA 1978, § 7-1-26. See also Kilmer, 2004-NMCA-122. See also Sisters of Charity, 1979-

16 NMSC-044.

17 For the foregoing reasons, the Taxpayer’s protest IS DENIED.

18 DATED: October 3, 2024.

19 Dee Dee Hoxie
20 Dee Dee Hoxie
21 Hearing Officer
22 Administrative Hearings Office
23 P.O. Box 6400
24 Santa Fe, NM 87502

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1 NOTICE OF RIGHT TO APPEAL

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

13 CERTIFICATE OF SERVICE

14 On October 3, 2024, a copy of the foregoing Decision and Order was submitted to the

15 parties listed below in the following manner:

16 First Class Mail & Email First Class Mail & Email
17
18 INTENTIONALLY BLANK

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