This memorandum opinion was not selected for publication in the New Mexico Appellate 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 Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions.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 IN THE MATTER OF THE PROTEST 3 OF SAIZ TRUCKING AND EARTHMOVING, 4 TO ASSESSMENT ISSUED UNDER LETTER 5 ID. NO. L0680042816
6 SAIZ TRUCKING AND 7 EARTHMOVING,
8 Protestant-Appellant/Cross-Appellee,
9 v. No. A-1-CA-35026
10 NEW MEXICO TAXATION 11 AND REVENUE DEPARTMENT,
12 Respondent-Appellee/Cross-Appellant.
13 APPEAL FROM THE TAXATION & REVENUE DEPARTMENT 14 Dee Dee Hoxie, Hearing Officer
15 Wayne G. Chew, P.C. 16 Wayne G. Chew 17 Albuquerque, NM
18 for Appellant/Cross-Appellee
19 Hector Balderas, Attorney General 20 Elena Morgan, Special Assistant Attorney General 21 New Mexico Taxation & Revenue Department 22 Santa Fe, NM 1 for Appellee/Cross-Appellant
2 MEMORANDUM OPINION
3 VIGIL, Judge.
4 {1} Saiz Trucking and Earthmoving (Taxpayer) appeals from the hearing officer’s
5 decision and order partially granting and partially denying his protest of the New
6 Mexico Taxation and Revenue Department’s (the Department) assessments for gross
7 receipts taxes, penalty, and interest arising from its work for the City of Albuquerque
8 (City) between 2004 and 2010. Taxpayer makes two arguments on appeal: (1) the
9 evidence was insufficient to support the Department’s assessments of gross receipts
10 taxes, penalty, and interest against it; and (2) if this Court finds that Taxpayer is
11 entitled to deduct the gross receipts, then there will not be a 25 percent understatement
12 of its tax liability and therefore the Department will not have a right to three additional
13 years of assessments pursuant to NMSA 1978, Section 7-1-18(A), (D) (1994,
14 amended 2013). We affirm the hearing officer’s decision and order. Because this is
15 a memorandum opinion and the parties are familiar with the facts and procedural
16 posture of the case, we set forth only such facts and law as are necessary to decide the
17 merits.
18 BACKGROUND
2 1 {2} Taxpayer is a New Mexico corporation engaged primarily in the business of
2 moving and hauling dirt, gravel, spoils, and performing grading at project sites. After
3 an audit of Taxpayer’s tax returns, on February 9, 2012, the Department assessed
4 Taxpayer $606,943.41 in unpaid gross receipts taxes, a $121,388.71 penalty, and
5 $175,418.66 in interest for the tax periods from January 31, 2004 through March 31,
6 2010. Taxpayer protested the Department’s assessment, arguing that most of its gross
7 receipts were deductible as constituting the sale and installation of landscape
8 materials, and that part of the Department’s assessments was barred by the statute of
9 limitations. After a hearing on Taxpayer’s protest of the Department’s assessments
10 and entry of findings of fact and conclusions of law, the hearing officer determined
11 that Taxpayer was liable for the gross receipts taxes, penalty, and interest for the tax
12 periods between December, 2005 and March, 2010; however, because the assessments
13 from January, 2004 to November, 2005 did not occur until more than six years after
14 the tax was due, those assessments were untimely, barred by the statute of limitations
15 pursuant to NMSA 1978, Section 7-1-18(D), and therefore abated. Taxpayer appeals
16 the hearing officer’s decision and order to this Court pursuant to NMSA 1978, Section
17 7-1-25 (2015).
18 DISCUSSION
3 1 {3} Taxpayer argues that the Department failed to present substantial evidence to
2 support the assessments. Without citation to the record in support of its contention,
3 Taxpayer asserts that the hearing officer erred in upholding the Department’s
4 assessments because she “failed to recognize that . . . Taxpayer sold tangible items of
5 property which were not part of a construction project to the City within the meaning
6 of NMSA 1978, [Section] 7-9-54 [(2003, amended 2018)] and 3.2.212.14 NMAC, as
7 supported by the substantial uncontradicted evidence.” Taxpayer likewise fails to
8 specifically challenge the hearing officer’s findings of fact in accordance with our
9 Rules of Appellate Procedure. We therefore deem the hearing officer’s findings of fact
10 conclusive. See Rule 12-318(A)(4) NMRA (stating that an appellant’s arguments
11 “shall set forth a specific attack on any finding, or the finding shall be deemed
12 conclusive”).
13 {4} “Any assessment of taxes by the Department is presumed to be correct and, in
14 protesting the assessment of taxes, Taxpayer has the burden of proving the deductions
15 were proper.” Arco Materials, Inc. v. N.M. Taxation & Revenue Dep’t, 1994-NMCA-
16 062, ¶ 2, 118 N.M. 12, 878 P.2d 330, rev’d on other grounds by Blaze Constr. Co. v.
17 Taxation & Revenue Dep’t of State of N.M., 118 N.M. 647, 884 P.2d 803. If a
18 protestant of a tax assessment “is dissatisfied with the decision and order of the
19 hearing officer, the party may appeal to the court of appeals for further relief, but only
4 1 to the same extent and upon the same theory as was asserted in the hearing before the
2 hearing officer.” Section 7-1-25(A). On appeal, this Court “shall set aside a decision
3 and order of the hearing officer only if found to be: (1) arbitrary, capricious or an
4 abuse of discretion; (2) not supported by substantial evidence in the record; or (3)
5 otherwise not in accordance with the law.” Section 7-1-25(C). “When reviewing for
6 sufficiency of the evidence, we look to the whole record and review the evidence in
7 the light most favorable to the agency’s findings.” Arco Materials, Inc., 1994-NMCA-
8 062, ¶ 2.
9 Section 7-9-54(A)(3) (2003) provides:
10 A. Receipts from selling tangible personal property to the United 11 States or New Mexico or any governmental unit or subdivision, agency, 12 department or instrumentality thereof may be deducted from gross receipts or 13 from governmental gross receipts. Unless contrary to federal law, the deduction 14 provided by this subsection does not apply to:
15 ....
16 (3) receipts from selling construction material[.]
17 The applicable regulation further provides that:
18 A. Except when the landscape items are part of a construction project, 19 receipts from selling and installing landscape items such as plants, 20 shrubs, sod, seed, trees, rocks and ornaments are receipts from the sale 21 of tangible personal property. Therefore, the receipts from the sale and 22 installation of these landscape items pursuant to a contract with a 23 governmental agency may be deducted from gross receipts pursuant to 24 Section 7-9-54. . . . Receipts from selling these landscape items as part
5 1 of a construction project may not be deducted pursuant to Section 7-9-54.
2 3.2.212.14(A) NMAC.
3 {5} The hearing officer found, in pertinent part, that Taxpayer’s primary client
4 during the assessment period was the City’s Parks Department, which engages in the
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This memorandum opinion was not selected for publication in the New Mexico Appellate 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 IN THE MATTER OF THE PROTEST 3 OF SAIZ TRUCKING AND EARTHMOVING, 4 TO ASSESSMENT ISSUED UNDER LETTER 5 ID. NO. L0680042816
6 SAIZ TRUCKING AND 7 EARTHMOVING,
8 Protestant-Appellant/Cross-Appellee,
9 v. No. A-1-CA-35026
10 NEW MEXICO TAXATION 11 AND REVENUE DEPARTMENT,
12 Respondent-Appellee/Cross-Appellant.
13 APPEAL FROM THE TAXATION & REVENUE DEPARTMENT 14 Dee Dee Hoxie, Hearing Officer
15 Wayne G. Chew, P.C. 16 Wayne G. Chew 17 Albuquerque, NM
18 for Appellant/Cross-Appellee
19 Hector Balderas, Attorney General 20 Elena Morgan, Special Assistant Attorney General 21 New Mexico Taxation & Revenue Department 22 Santa Fe, NM 1 for Appellee/Cross-Appellant
2 MEMORANDUM OPINION
3 VIGIL, Judge.
4 {1} Saiz Trucking and Earthmoving (Taxpayer) appeals from the hearing officer’s
5 decision and order partially granting and partially denying his protest of the New
6 Mexico Taxation and Revenue Department’s (the Department) assessments for gross
7 receipts taxes, penalty, and interest arising from its work for the City of Albuquerque
8 (City) between 2004 and 2010. Taxpayer makes two arguments on appeal: (1) the
9 evidence was insufficient to support the Department’s assessments of gross receipts
10 taxes, penalty, and interest against it; and (2) if this Court finds that Taxpayer is
11 entitled to deduct the gross receipts, then there will not be a 25 percent understatement
12 of its tax liability and therefore the Department will not have a right to three additional
13 years of assessments pursuant to NMSA 1978, Section 7-1-18(A), (D) (1994,
14 amended 2013). We affirm the hearing officer’s decision and order. Because this is
15 a memorandum opinion and the parties are familiar with the facts and procedural
16 posture of the case, we set forth only such facts and law as are necessary to decide the
17 merits.
18 BACKGROUND
2 1 {2} Taxpayer is a New Mexico corporation engaged primarily in the business of
2 moving and hauling dirt, gravel, spoils, and performing grading at project sites. After
3 an audit of Taxpayer’s tax returns, on February 9, 2012, the Department assessed
4 Taxpayer $606,943.41 in unpaid gross receipts taxes, a $121,388.71 penalty, and
5 $175,418.66 in interest for the tax periods from January 31, 2004 through March 31,
6 2010. Taxpayer protested the Department’s assessment, arguing that most of its gross
7 receipts were deductible as constituting the sale and installation of landscape
8 materials, and that part of the Department’s assessments was barred by the statute of
9 limitations. After a hearing on Taxpayer’s protest of the Department’s assessments
10 and entry of findings of fact and conclusions of law, the hearing officer determined
11 that Taxpayer was liable for the gross receipts taxes, penalty, and interest for the tax
12 periods between December, 2005 and March, 2010; however, because the assessments
13 from January, 2004 to November, 2005 did not occur until more than six years after
14 the tax was due, those assessments were untimely, barred by the statute of limitations
15 pursuant to NMSA 1978, Section 7-1-18(D), and therefore abated. Taxpayer appeals
16 the hearing officer’s decision and order to this Court pursuant to NMSA 1978, Section
17 7-1-25 (2015).
18 DISCUSSION
3 1 {3} Taxpayer argues that the Department failed to present substantial evidence to
2 support the assessments. Without citation to the record in support of its contention,
3 Taxpayer asserts that the hearing officer erred in upholding the Department’s
4 assessments because she “failed to recognize that . . . Taxpayer sold tangible items of
5 property which were not part of a construction project to the City within the meaning
6 of NMSA 1978, [Section] 7-9-54 [(2003, amended 2018)] and 3.2.212.14 NMAC, as
7 supported by the substantial uncontradicted evidence.” Taxpayer likewise fails to
8 specifically challenge the hearing officer’s findings of fact in accordance with our
9 Rules of Appellate Procedure. We therefore deem the hearing officer’s findings of fact
10 conclusive. See Rule 12-318(A)(4) NMRA (stating that an appellant’s arguments
11 “shall set forth a specific attack on any finding, or the finding shall be deemed
12 conclusive”).
13 {4} “Any assessment of taxes by the Department is presumed to be correct and, in
14 protesting the assessment of taxes, Taxpayer has the burden of proving the deductions
15 were proper.” Arco Materials, Inc. v. N.M. Taxation & Revenue Dep’t, 1994-NMCA-
16 062, ¶ 2, 118 N.M. 12, 878 P.2d 330, rev’d on other grounds by Blaze Constr. Co. v.
17 Taxation & Revenue Dep’t of State of N.M., 118 N.M. 647, 884 P.2d 803. If a
18 protestant of a tax assessment “is dissatisfied with the decision and order of the
19 hearing officer, the party may appeal to the court of appeals for further relief, but only
4 1 to the same extent and upon the same theory as was asserted in the hearing before the
2 hearing officer.” Section 7-1-25(A). On appeal, this Court “shall set aside a decision
3 and order of the hearing officer only if found to be: (1) arbitrary, capricious or an
4 abuse of discretion; (2) not supported by substantial evidence in the record; or (3)
5 otherwise not in accordance with the law.” Section 7-1-25(C). “When reviewing for
6 sufficiency of the evidence, we look to the whole record and review the evidence in
7 the light most favorable to the agency’s findings.” Arco Materials, Inc., 1994-NMCA-
8 062, ¶ 2.
9 Section 7-9-54(A)(3) (2003) provides:
10 A. Receipts from selling tangible personal property to the United 11 States or New Mexico or any governmental unit or subdivision, agency, 12 department or instrumentality thereof may be deducted from gross receipts or 13 from governmental gross receipts. Unless contrary to federal law, the deduction 14 provided by this subsection does not apply to:
15 ....
16 (3) receipts from selling construction material[.]
17 The applicable regulation further provides that:
18 A. Except when the landscape items are part of a construction project, 19 receipts from selling and installing landscape items such as plants, 20 shrubs, sod, seed, trees, rocks and ornaments are receipts from the sale 21 of tangible personal property. Therefore, the receipts from the sale and 22 installation of these landscape items pursuant to a contract with a 23 governmental agency may be deducted from gross receipts pursuant to 24 Section 7-9-54. . . . Receipts from selling these landscape items as part
5 1 of a construction project may not be deducted pursuant to Section 7-9-54.
2 3.2.212.14(A) NMAC.
3 {5} The hearing officer found, in pertinent part, that Taxpayer’s primary client
4 during the assessment period was the City’s Parks Department, which engages in the
5 management, renovation, construction, and landscape of the City’s parks. Taxpayer’s
6 work, the hearing officer found, consisted of the hauling and installation of dirt,
7 gravel, and spoils, as well as performing grading at the City’s park construction
8 project sites, which included “parks, ballfields, and other similar facilities.” These
9 facts support the hearing officer’s conclusion that Taxpayer was providing landscape
10 items and services “to the City on various construction projects[.]” See NMSA 1978,
11 § 7-9-3.4(A) (2003) (defining “construction” as: (1) the building, altering, repairing
12 or demolishing in the ordinary course of business any: (a) road, highway, bridge,
13 parking area or related project; (b) building, stadium or other structure; (c) airport,
14 subway or similar facility; (d) park, trail, athletic field, golf course or similar facility;
15 . . . and (2) the leveling . . . of land”). Accordingly, because Taxpayer sold and
16 installed landscape items, e.g., dirt, gravel, and spoils, to and for the City as part of the
17 City Parks Department’s construction projects, as the hearing officer concluded, the
18 gross receipts for these transactions were not deductible under Section 7-9-54. See
19 3.2.212.14(A) NMAC.
6 1 {6} Because we conclude that Taxpayer was not entitled to deduct the gross receipts
2 from its work for the City, we do not reach Taxpayer’s second argument that the
3 Department did not have the right to assess it for three additional years pursuant to
4 Section 7-1-18(A), (D).
5 CONCLUSION
6 {7} The decision and order of the hearing officer is affirmed.
7 {8} IT IS SO ORDERED.
8 9 MICHAEL E. VIGIL, Judge
10 WE CONCUR:
11 12 M. MONICA ZAMORA, Judge
13 14 HENRY M. BOHNHOFF, Judge