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

• Southwest Mobile Service and its owner, Richard Cameron, protested the New Mexico Taxation and Revenue Department's assessment of gross receipts taxes on services sold to an out-of-state buyer, Oasis. Oasis had provided a Multijurisdictional Uniform Sales and Use Tax Certificate (MTC) instead of the required Nontaxable Transaction Certificate (NTTC) for services. Despite Oasis paying the gross receipts taxes due and later providing a proper NTTC, the Department assessed taxes, penalties, and interest against Southwest Mobile due to the initial lack of a proper NTTC within a specified deadline (paras 4-6).

Procedural History

• Appeal from the N.M. Taxation and Revenue Department, Dee Dee Hoxie, Hearing Officer: The hearing officer denied Southwest Mobile's protest of the gross receipts taxes assessment.

Parties' Submissions

• Protestants-Appellants (Southwest Mobile Service and Richard Cameron): Argued that they are entitled to a deduction because they accepted the MTCs in good faith and contended that the MTC should be treated like an NTTC. They also argued for equitable estoppel against the Department from assessing the gross receipts tax (paras 8-9).
• Respondent-Appellee (New Mexico Taxation and Revenue Department): Argued that the MTC did not apply to Southwest Mobile's transactions and, therefore, is not eligible for the good faith provision in the Compact. They also contended that they do not have authority over buyers under the MTC and cannot require the buyer to provide information or examine its tax records (paras 14-16).

Legal Issues

• Whether the good faith provision applies to Southwest Mobile's acceptance of the MTCs (para 8).
• Whether the Department should be equitably estopped from assessing the gross receipts tax against Southwest Mobile (para 8).

Disposition

• The Court of Appeals of New Mexico reversed the hearing officer's decision, concluding that the good faith provision applies to Southwest Mobile's acceptance of the MTCs. The court did not reach the argument regarding equitable estoppel (para 19).

Reasons

• Per MICHAEL D. BUSTAMANTE, Judge (RODERICK T. KENNEDY, Judge, and STEPHEN G. FRENCH, Judge concurring):
  The court found that the good faith provision in the Compact applies to Southwest Mobile's acceptance of the MTCs, contrary to the Department's arguments. The Department's interpretation would negate the purpose of the good faith exception, which is meant to protect sellers who accept exemption certificates in good faith, even if the wrong form was used. The court also rejected the Department's argument regarding its limited authority over buyers issuing MTCs, stating that the Legislature intended the good faith provision to apply to out-of-state buyers. The court deferred to the hearing officer's finding that Southwest Mobile accepted the MTCs in good faith, supported by evidence and testimony at the hearing (paras 10-18).