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

• Taxpayer, a licensed producer of medical marijuana, sought refunds for gross receipts taxes paid on sales of medical marijuana from 2011-2016. These claims were denied, leading to formal protests and a consolidated hearing. The central issue was whether medical marijuana dispensed under the Compassionate Use Act qualifies as a "prescription drug" for purposes of a statutory deduction from gross receipts taxes (paras 2, 7).

Procedural History

• Administrative Hearings Office, Chris Romero, Hearing Officer: Denied Taxpayer's claims for tax refunds and consolidated protests, concluding that medical marijuana does not qualify as a "prescription drug" for the statutory deduction (para 2).

Parties' Submissions

• Taxpayer: Argued that medical marijuana dispensed under the Compassionate Use Act should qualify as a "prescription drug" for purposes of the statutory deduction from gross receipts taxes, thereby entitling them to refunds for the taxes paid (para 2).
• New Mexico Taxation & Revenue Department (Defendant-Appellee): Contended that medical marijuana does not constitute a "prescription drug" under the statutory definition and, therefore, does not qualify for the deduction from gross receipts taxes (paras 4, 11, 13-14).

Legal Issues

• Whether medical marijuana dispensed pursuant to the Compassionate Use Act qualifies as a "prescription drug" for purposes of the statutory deduction from gross receipts taxes under NMSA 1978, Section 7-9-73.2 (2007) (paras 1, 7).

Disposition

• The Court of Appeals of the State of New Mexico reversed the hearing officer's denial of Taxpayer's request for gross receipt tax refunds (para 18).

Reasons

• M. Monica Zamora, Judge, with J. Miles Hanisee, Chief Judge, and Julie J. Vargas, Judge concurring:
  The court applied de novo review due to the legal nature of the issue and rejected the Department's claim that the issue was not preserved for appeal. The court's analysis focused on statutory interpretation, emphasizing the intent of the Legislature and the specific definitions provided within the statute. The court found that medical marijuana dispensed under the Compassionate Use Act satisfies the statutory definition of "prescription drugs" because it is dispensed under state law by authorized individuals, prescribed for specified persons according to state law, and subject to federal restrictions on sale for safety. The court also considered the legislative intent and purpose behind both the Compassionate Use Act and the tax deduction statute, concluding that applying the deduction to medical marijuana sales aligns with the legislative goal of making medical treatment more accessible. The court rejected the Department's arguments that federal law or other statutory contexts should influence the interpretation, focusing instead on the specific language and purpose of the gross receipts tax provisions (paras 3-17).