AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The Tucson Electric Power Company (Taxpayer) co-owns the Luna Energy Facility, a power plant in New Mexico, and purchases natural gas from various third parties, including out-of-state vendors, to produce electricity. The Taxpayer applied for a tax refund of $434,860.92 for the tax period of July 1, 2011, through December 31, 2011, under the belief that its natural gas purchases qualified for a deduction under the Gross Receipts and Compensating Tax Act. The New Mexico Taxation and Revenue Department denied this refund application, leading to the Taxpayer's administrative protest (paras 2-3).

Procedural History

• Administrative Hearings Office: The administrative hearing officer denied the Taxpayer's protest of the Department's denial of the tax refund request.

Parties' Submissions

• Taxpayer: Argued that the purchases of natural gas qualified for a deduction under Section 7-9-65 of the Gross Receipts and Compensating Tax Act, as the natural gas was purchased in "lots" greater than eighteen tons, and thus not subject to compensating tax (para 3).
• Department: Responded that Section 7-9-65 does not apply to the Taxpayer's purchases of natural gas for electricity generation and that the Taxpayer failed to establish entitlement to the deduction (para 3).

Legal Issues

• Whether the Taxpayer's purchases of natural gas qualify for a deduction under Section 7-9-65 of the Gross Receipts and Compensating Tax Act (para 5).

Disposition

• The Court of Appeals affirmed the administrative hearing officer's decision to deny the Taxpayer's protest, but on different grounds than those relied upon by the administrative hearing officer (para 1).

Reasons

• The Court, led by Chief Judge Hanisee with Judges Zamora and Bosson concurring, held that Section 7-9-65—allowing deductions for "receipts from selling chemicals or reagents in lots in excess of eighteen tons"—does not apply to receipts for natural gas. The Court reasoned that the statute's plain language does not clearly and unambiguously allow for a deduction for the receipts from the purchase of natural gas. The Court also referenced a similar case regarding coal, emphasizing that if the Legislature intended to provide a deduction for natural gas, it would have specified so in the statutory language. The Court further noted that the Legislature has enacted other provisions specifically pertaining to natural gas, indicating that it did not intend for Section 7-9-65 to apply to natural gas. The Court concluded that the Taxpayer did not meet its burden to establish entitlement to the deduction under Section 7-9-65 (paras 5-16).