New Mexico subcontractor required to pay gross receipts (sales) tax.

A subcontractor was required to remit sales tax because of its inability to provide proof of nontaxable transaction certificates (NTTCs) in a timely manner. These certificates were needed to support deductions previously claimed. The subcontractor argued that the general contractors originally told them the projects did not meet a gross receipts tax status, thus they were not in possession of all of the required NTTCs. The state denied the subcontractor’s argument citing lack of knowledge of its own tax liability was negligent and not a valid argument for abatement. In New Mexico, if a taxpayer does not obtain the required NTTCs within 60 days of receiving a notice from the Taxation and Revenue Department, the deductions become invalid. (In the Matter of the Protest of J.W. Jones Mechanical Contractors, Inc., New Mexico Taxation and Revenue Department, No. 01-134848-00-8, August 15, 2002)

Posted on December 15, 2002