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

• Online Radiology Medical Group, Inc. (Taxpayer) was assessed for gross receipts tax liability by the New Mexico Taxation and Revenue Department under the Gross Receipts and Compensating Tax Act. The Taxpayer contested this assessment, arguing against the application of the legal residuum rule in their tax protest adjudication and the determination that the stipends they received were subject to gross receipts tax.

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Taxpayer: Argued that the legal residuum rule should not apply to proceedings involving only monetary interests, particularly when its application benefits a government agency. Contended that the stipends were not subject to the Gross Receipts and Compensating Tax Act and that the administrative hearing officer's (AHO) decision was not supported by substantial evidence.
• Respondent-Appellee (New Mexico Taxation & Revenue Department): Supported the AHO's application of the legal residuum rule and its decision that the stipends were subject to gross receipts tax, arguing that the Taxpayer's appeal lacks merit.

Legal Issues

• Whether the legal residuum rule applies to tax protest adjudications involving only monetary interests.
• If the legal residuum rule is applicable, whether the AHO misapplied it in this case.
• Whether the AHO's finding that the stipends were subject to the Gross Receipts and Compensating Tax Act was supported by substantial evidence.

Disposition

• The decision and order of the administrative hearing officer upholding the assessment of gross receipts tax liability against the Taxpayer were affirmed.

Reasons

• The Court, consisting of Judges Ives, Bogardus, and Wray, held that:
  The legal residuum rule, which requires a residuum of competent evidence to support the findings of an administrative agency where a substantial right is at stake, does apply to tax protest adjudications. The Court found no basis to exclude taxation from the contexts in which the legal residuum rule applies, nor to apply the rule asymmetrically against state agencies (paras 2-5).
  The AHO did not misapply the legal residuum rule. The AHO correctly concluded that parts of the testimony critical to the Taxpayer's case were not based on personal knowledge and thus would not have been admissible in a jury trial. The Court found that the AHO's application of the rule, requiring some evidence that would be admissible under the Rules of Evidence, was not erroneous (paras 6-9).
  The AHO's finding that the stipends were taxable gross receipts is supported by substantial evidence. The Court determined that the AHO's assessment of testimonial and contract evidence, which revealed that the stipends compensated the Taxpayer for various functions including medical directorship and interventional support services, was conclusive. The absence of evidence to isolate Taxpayer’s remote radiology services from other compensated services justified the AHO's determination (paras 10-13).