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

• A licensed physician provided behavioral health treatment for youth in New Mexico as an independent contractor through Staff Care, Inc., a locum tenens staffing company, to Open Skies Healthcare, a nonprofit organization. The physician did not pay gross receipts taxes for services rendered from 2013 to 2016, leading the New Mexico Taxation and Revenue Department to issue an assessment of taxes, penalties, and interest. The physician protested the assessment, arguing that his income was deductible from gross receipts taxes (paras 2-4).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Protestant-Appellant: Argued that the income from services provided was deductible from gross receipts taxes and that the Department’s assessment, including penalties and interest, should be abated. Contended that receipts are deductible if traceable to a managed health care provider or insurer, that payment from Staff Care as a third party claims administrator qualifies for deduction, and that Staff Care acts as an intermediary between the taxpayer and an insurer, thus qualifying for deduction under specific regulations (paras 5, 8-15).
• Respondent-Appellee: Maintained that the assessment was correct, emphasizing that an independent contractor is not exempt from gross receipts taxes and that the taxpayer did not meet the burden of proof to establish entitlement to the claimed deductions. Argued against the taxpayer's interpretation of the relevant statutes and regulations (paras 5, 8-15).

Legal Issues

• Whether the income received by the taxpayer from providing medical services as an independent contractor is deductible from gross receipts taxes under NMSA 1978, Section 7-9-93.
• Whether the Department’s penalty assessment was proper in the absence of competent evidence negating an inference of negligence (paras 7, 18).

Disposition

• The Court of Appeals affirmed the decision of the administrative hearing officer, denying the taxpayer’s protest against the assessment of gross receipts taxes, penalties, and interest (para 1).

Reasons

• WRAY, Judge; BOGARDUS, Judge; IVES, Judge (concurring): The court held that the taxpayer did not qualify for deductions under Section 7-9-93 as the only contract was with Staff Care, not a managed health care provider or health care insurer. It rejected the taxpayer's arguments based on traceability, third party claims administrator, and intermediary roles, finding no evidence that Staff Care met the statutory definitions required for the deductions claimed. The court also found the taxpayer did not demonstrate nonnegligence to warrant abatement of penalties, as there was no evidence of reasonable reliance on competent advice or that the taxpayer's failure to pay taxes was the result of a diligent protest. The court emphasized the taxpayer's burden to prove entitlement to deductions and negation of negligence, which was not met (paras 8-23).