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 New Mexico Taxation and Revenue Department (the Department) issued a tax assessment to Tindall Corporation (Tindall) for receipts from sales of precast concrete prison cells to six New Mexico counties. Tindall contested the assessment, arguing that these sales were tax-deductible as sales of tangible personal property to a government. An administrative hearing was held, and the hearing officer concluded in favor of Tindall, finding the sales were deductible under NMSA 1978, Section 7-9-54(A) (2003).

Procedural History

• Taxation and Revenue Department, March 21, 2011: The hearing officer concluded that the receipts from the sales of the cells were deductible as sales of tangible personal property to a government.

Parties' Submissions

• Plaintiff-Appellant (The Department): Argued that the receipts from the sales of the cells were either from construction activities or from the sale of construction materials, both considered a sale of a service and not eligible for the tax deduction under Section 7-9-54(A).
• Defendant-Appellee (Tindall): Contended that the sales were of tangible personal property to a government and thus deductible under Section 7-9-54(A).

Legal Issues

• Whether the receipts from Tindall's sales of precast concrete prison cells to six New Mexico counties are deductible as sales of tangible personal property to a government under NMSA 1978, Section 7-9-54(A) (2003).
• Whether Tindall's activities constituted construction activities or the sale of construction materials, making the receipts taxable under Section 7-9-54(A)(3).

Disposition

• The Court of Appeals affirmed the hearing officer's decision that the receipts from the sales of the cells were deductible as sales of tangible personal property to a government under Section 7-9-54(A).

Reasons

• WECHSLER, Judge, with KENNEDY, Judge, and HANISEE, Judge concurring, provided the reasoning for the court's decision. The court reviewed the hearing officer's decision under the standard of whether it was arbitrary and capricious, unsupported by substantial evidence, or not in accordance with the law. The court found substantial evidence supported the hearing officer's conclusion that the cells were portable or modular buildings, not construction activities or materials, and thus the sales were deductible under Section 7-9-54(A). The court considered the design and installation process of the cells, their intended use, and the nature of Tindall's business in reaching its conclusion. The court also noted that the Department's arguments did not provide sufficient evidence to overturn the hearing officer's findings.