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

• Santa Fe County contracted Weil Construction, Inc. (Weil) in 2012 to construct a fire station in Edgewood, New Mexico. Weil paid gross receipts tax on all receipts from the construction and passed these costs to Santa Fe County. Post-completion, a cost segregation study by Moss Adams LLP identified thirty-four items installed in the fire station potentially qualifying for a gross receipts tax deduction under the Gross Receipts and Compensating Tax Act. Weil filed a claim for a refund of $30,851 in taxes paid on these items, arguing they were tangible personal property, not construction material or services, and thus deductible (paras 2-3).

Procedural History

• Administrative Hearings Office: The Taxation and Revenue Department hearing officer disallowed the claimed deduction and denied Weil’s refund request, concluding all items were construction material and that Weil failed to establish their right to the deduction (para 1).

Parties' Submissions

• Plaintiff-Appellant (Weil Construction, Inc.): Argued that the hearing officer erred in concluding that Weil could not claim a deduction for the items installed in the fire station and that Weil failed to meet its burden to establish its right to the deduction. Weil relied on Regulation J to argue that the items qualified as tangible personal property for purposes of the deduction (paras 1, 3).
• Defendants-Appellees (Taxation and Revenue Department): Contended that all the disputed property was construction material as defined by statute, and that Regulation J could not override statutory provisions. Additionally, they argued that Weil failed to demonstrate that the claimed items were not part of a "building" under Regulation J, thus not meeting the burden of proof for the deduction (paras 5, 8).

Legal Issues

• Whether the hearing officer erred in concluding that Weil could not claim a deduction for items installed during the construction of a fire station.
• Whether Weil failed to meet its burden to establish its right to the deduction under the Gross Receipts and Compensating Tax Act and Regulation J (para 1).

Disposition

• The Court of Appeals affirmed the decision and order of the Taxation and Revenue Department hearing officer, denying Weil’s claim for a deduction and refund of gross receipts tax paid on items installed during the construction of a fire station (para 13).

Reasons

• The Court, per Judge Jennifer L. Attrep, with Judges M. Monica Zamora and Daniel J. Gallegos concurring, held that Weil failed to meet its burden of proof to establish entitlement to the deduction. The Court assumed, for the sake of argument, that Regulation J provided an avenue for deduction but found that Weil did not sufficiently demonstrate that the items in question were installed to perform, support, or serve the activities and processes conducted in the building and classified for depreciation under Section 168 of the Internal Revenue Code. The Court also noted that Weil's arguments on appeal did not sufficiently challenge the sufficiency of the evidence presented at the administrative hearing. Consequently, the Court did not need to address Weil’s remaining claim that the hearing officer misconstrued the law (paras 6-12).