Tax & Rev v. Southwest Abatement

This memorandum opinion was not selected for publication in the New Mexico Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date. 1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 2 STATE OF NEW MEXICO TAXATION 3 AND REVENUE DEPARTMENT, 4 Plaintiff-Appellant, 5 v. NO. 31,117 6 SOUTHWEST ABATEMENT, INC., 7 Defendant-Appellee. 8 APPEAL FROM THE TAXATION AND REVENUE DEPARTMENT 9 Dee Dee Hoxie, Hearing Officer 10 Gary K. King, Attorney General 11 Amy Chavez-Romero, Special Assistant Attorney General 12 Santa Fe, NM 13 for Appellant 14 The Waggoner Legal Group 15 Robert M. Strumor 16 William J. Waggoner 17 Santa Fe, NM 18 for Appellee 19 MEMORANDUM OPINION 20 VANZI, Judge. 1 The State of New Mexico Taxation and Revenue Department (the Department) 2 appeals from the decision and order of its hearing officer concerning penalties due 3 from Southwest Abatement, Inc. (Taxpayer), in connection with gross receipts tax for 4 the tax year 2007. We reverse. 5 Prior to January 1, 2008, NMSA 1978, Section 7-1-69(A) (2003) (amended 6 2007), provided that a penalty of two percent per month or any fraction of a month 7 would be added to the amount of an assessment if a taxpayer failed to file a tax return 8 or to pay taxes when due because of negligence or disregard of Department rules or 9 regulations, but without intent to evade or defeat a tax. The statute then provided a 10 maximum penalty of ten percent. Section 7-1-69(A)(1). In 2007, the Legislature 11 amended Section 7-1-69 to increase the maximum penalty to twenty percent, effective 12 January 1, 2008. 2007 N.M. Laws, ch. 45, §§ 4, 16; NMSA 1978, § 7-1-69(A) (2007). 13 On November 4, 2008, the Department issued an assessment to Taxpayer for 14 gross receipts tax due for various tax periods in 2007, including compensating tax, 15 interest, and a twenty percent penalty. On December 3, 2008, the Department issued 16 another assessment for gross receipts tax due for three different tax periods in 2007, 17 including compensating tax, interest, and a twenty percent penalty. Taxpayer 18 protested the assessments. The hearing officer denied the protest but reduced the 19 penalty to ten percent based upon the 2003 version of Section 7-1-69. The [2] 1 Department appeals the hearing officer’s decision and order, and Taxpayer has timely 2 responded. 3 This Court has addressed the same issue raised in this appeal in GEA Integrated 4 Cooling Technology v. New Mexico Taxation & Revenue Department, 2012-NMCA- 5 010, ___ N.M. ___, ___ P.3d ___ (No. 30,790, Dec. 8, 2011). In GEA, we held that 6 the date of the assessment under Section 7-1-69 determines the maximum penalty that 7 the Department is to apply. GEA, 2012-NMCA-010, ¶ 10 . In that case, the 8 department issued an assessment in 2009 for gross receipts tax due in 2006 and 2007. 9 Id. ¶ 2. Thus, we held that the 2007 amendment and the twenty percent maximum 10 penalty applied to the assessment. Id. ¶ 15. Based on GEA, we reach the same result 11 in this case for Taxpayer’s 2007 tax year. We reverse the hearing officer’s decision, 12 and we hold that the Department’s imposition of the twenty percent maximum penalty 13 was the correct amount to apply in this case. 14 CONCLUSION 15 We reverse the decision of the hearing officer regarding the assessments for the 16 tax year 2007 to the extent that the hearing officer imposed the ten percent maximum 17 penalty. The 2007 amendment to Section 7-1-69 was in effect at the time the 18 Department issued its assessments on November 4, 2008, and December 3, 2008, and [3] 1 the Department could impose a twenty percent maximum penalty for the assessments 2 made for these tax years. 3 IT IS SO ORDERED. 4 __________________________________ 5 LINDA M. VANZI, Judge 6 WE CONCUR: 7 _________________________________ 8 CELIA FOY CASTILLO, Chief Judge 9 _________________________________ 10 JONATHAN B. SUTIN, Judge