A. A taxpayer may dispute:

(1) the assessment to the taxpayer of any amount of tax;

(2) the application to the taxpayer of any provision of the Tax Administration Act except the issuance of a subpoena or summons; or

(3) the denial of or failure either to allow or to deny a:

(a) credit or rebate; or

(b) claim for refund made in accordance with Section 7-1-26 NMSA 1978.

B. The taxpayer may dispute a matter described in Subsection A of this section by filing with the secretary a written protest that:

(1) identifies the taxpayer and the tax credit, rebate, property or provision of the Tax Administration Act involved;

(2) states the grounds on which the protest is based and summarizes evidence supporting each ground asserted; and

(3) states the affirmative relief requested.

C. A taxpayer may amend a statement made by the taxpayer in accordance with Paragraphs (2) and (3) of Subsection B of this section at any time prior to ten days before the hearing conducted on the protest in accordance with the Administrative Hearings Office Act or, if a scheduling order has been issued, in accordance with the scheduling order. The secretary may, in appropriate cases, provide for an informal conference before a hearing of the protest is set by the administrative hearings office or before acting on a claim for refund.

D. A taxpayer may file a protest, in the case of an assessment of tax by the department, without making payment of the amount assessed; provided that, if only a portion of the assessment is in dispute, any unprotested amounts of tax, interest or penalty shall be paid, or, if applicable, an installment agreement pursuant to Section 7-1-21 NMSA 1978 shall be entered into for the unprotested amounts, on or before the due date for the protest.

E. A protest by a taxpayer shall be filed within ninety days after:

(1) the date of the mailing to the taxpayer by the department of the notice of assessment and demand for payment as provided in Subsection A or D of Section 7-1-17 NMSA 1978;

(2) the mailing of the other peremptory notice or demand;

(3) the date of the application to the taxpayer of the applicable provision of the Tax Administration Act; or

(4) the date of denial of a claim pursuant to Section 7-1-26 NMSA 1978 or the last date upon which the department was required to take action on the claim but failed to take action.

F. If a taxpayer fails to timely protest an assessment of tax, penalty or interest:

(1) the undisputed amount of tax assessed and not protested becomes final;

(2) the taxpayer is deemed to have waived the right to protest the assessment, unless the taxpayer pays the tax and claims a refund of the tax pursuant to Section 7-1-26 NMSA 1978; and

(3) the secretary may proceed to enforce collection of the tax if the taxpayer is delinquent as defined by Section 7-1-16 NMSA 1978.

G. The fact that the department did not mail the assessment or other peremptory notice or demand by certified or registered mail or otherwise demand and receive acknowledgment of receipt by the taxpayer shall not be deemed to demonstrate the taxpayer's inability to protest within the required time.

H. A proceeding other than one to enforce collection of an amount assessed as tax and to protect the interest of the state by injunction, as provided by Sections 7-1-31, 7-1-33, 7-1-34, 7-1-40, 7-1-53, 7-1-56 and 7-1-58 NMSA 1978, is not stayed by timely filing of a protest in accordance with this section.

I. Nothing in this section shall be construed to authorize a criminal proceeding or to authorize an administrative protest of the issuance of a subpoena or summons.

History: 1953 Comp., § 72-13-38, enacted by Laws 1965, ch. 248, § 26; 1966, ch. 30, § 2; 1971, ch. 276, § 8; 1979, ch. 144, § 23; 1982, ch. 18, § 10; 1986, ch. 20, § 15; 1989, ch. 325, § 6; 1993, ch. 5, § 8; 2000, ch. 28, § 8; 2003, ch. 398, § 8; 2013, ch. 27, § 6; 2015, ch. 73, § 15; 2017, ch. 63, § 25; 2019, ch. 157, § 3.

Cross references. — For Rules of Procedure for the District Courts, see Rule 1-001 NMRA et seq.

The 2019 amendment, effective June 14, 2019, revised the procedures for protesting a tax liability; in Subsection B, Paragraph B(2), after "grounds", deleted "for the taxpayer's protest and the affirmative relief requested. The statement of grounds for protest shall specify individual grounds upon" and added "on", after "based and", added "summarizes", after "ground asserted", deleted "provided that the" and added "and", and added Paragraph B(3); added new subsection designation "C" and redesignated former Subsections C through H as Subsections D through I, respectively; in Subsection C, after "amend a statement", added "made by the taxpayer in accordance with Paragraphs (2) and (3) of Subsection B of this section"; in Subsection D, deleted "In the case of an assessment of tax by the department" and added "A taxpayer may file", after " a protest", deleted "may be filed" and added "in the case of an assessment of tax by the department"; in Subsection E, Paragraph E(1), after "assessment", deleted "or" and added "and demand for payment as provided in Subsection A or D of Section 7-1-17 NMSA 1978", and in Paragraph E(2), added "the mailing of the"; and in Subsection F, in the introductory clause, after "If a", added "taxpayer fails to timely", after "protest", deleted "to a notice of" and added "an", after "assessment", deleted "is not filed within the time required" and added "of tax, penalty or interest", in Paragraph F(1), after "the", added "undisputed", and after "amount of tax", deleted "determined to be due" and added "assessed and not protested", and in Paragraph F(2), after "the right to", deleted "question the amount of tax determined to be due" and added "protest the assessment".

The 2017 amendment, effective June 16, 2017, revised the list of information that must be included in a taxpayer protest, clarified that, in a taxpayer protest of an assessment, payment of the disputed tax liability is not required in order to protest, but any undisputed amounts are required to be paid, and provided that if a protest to a notice of assessment is not filed within the time required, the amount of tax determined to be due becomes final and the taxpayer is deemed to have waived the right to protest, unless the taxpayer were to pay the tax and claim a refund of the tax; in Subsection B, after "upon which the protest is based and", deleted "a summary statement of the", and after "evidence", deleted "if any, expected to be produced"; designated the last sentence of Subsection B as new Subsection C and designated the first sentence of former Subsection C as Subsection D, designated the second sentence of former Subsection C as Subsection E, and designated the third sentence of former Subsection C as Subsection F, and redesignated former Subsections D and E as Subsections G and H, respectively; in Subsection C, after "assessed", added "provided that, if only a portion of the assessment is in dispute, any unprotested amounts of tax, interest or penalty shall be paid, or, if applicable, an installment agreement pursuant to Section 7-1-21 NMSA 1978 shall be entered into for the unprotested amounts, on or before the due date for the protest"; and in Subsection E, after "If a protest", added "to a notice of assessment", added Paragraphs E(1) and E(2), and added the paragraph designation "(3)" to the last sentence of the subsection.

The 2015 amendment, effective July 1, 2015, provided that administrative protests are to be conducted pursuant to the Administrative Hearings Office Act; in Subsection A, deleted "Any" and added "A"; in Subsection B, after "ten days before", deleted "any" and added "the", after "pursuant to", deleted "Section 7-1-24.1 NMSA 1978" and added "the provisions of the Administrative Hearings Office Act", after "informal conference before", deleted "setting", after "hearing of the protest", added "is set by the administrative hearings office" and after "or", added "before", and after "acting on", deleted "any " and added "a"; in Subsection C, after "C.", deleted "Any" and added "A", after "pursuant to Section", deleted "7-1-24.1" and added "7-1-26"; in Subsection D, after "collection of", deleted "any" and added "an", and after "filing of a protest", deleted "under" and added "pursuant to the provisions of"; and in Subsection E, after "authorize", deleted "any" and added "a", and after "criminal", deleted "proceedings hereunder" and added "proceeding".

Temporary provisions. — Laws 2015, ch. 73, § 36 provided:

A. On July 1, 2015, all personnel, functions, appropriations, money, records, furniture, equipment and other property of, or attributable to, the hearings bureau of the office of the secretary of taxation and revenue shall be transferred to the administrative hearings office.

B. On July 1, 2015, all contractual obligations of the hearings bureau of the office of the secretary of taxation and revenue shall be binding on the administrative hearings office.

C. On July 1, 2015, all references in statute to the hearings bureau of the office of the secretary of taxation and revenue or hearing officers of the taxation and revenue department in Chapters 7 and 66 NMSA 1978 shall be deemed to be references to the administrative hearings office or a hearing officer of the office.

D. Rules of the taxation and revenue department pertaining to hearing officers and the conduct of hearings pursuant to actions related to Chapter 7 or 66 NMSA 1978 shall be deemed to be the rules of the administrative hearings office until amended or repealed by the office.

The 2013 amendment, effective July 1, 2013, prohibited the disputation of the issuance of a subpoena or summons; permitted the disputation of the denial of a credit or rebate; prescribed the content of a protest; permitted a protest to be filed without making a payment of the amount assessed; extended the deadline for filing a protest; deleted former provisions governing hearings; at the beginning of the title, added "Disputing liabilities", and after "administrative", deleted "hearing procedure", and added "protest"; in Paragraph (2) of Subsection A, after "Tax Administration Act", added "except the issuance of a subpoena or summons"; added Subparagraph (a) of Paragraph (3) of Subsection A; in Subsection B, at the beginning of the first sentence, added "The taxpayer may dispute a matter described in Subsection A of this section" and after "written protest", deleted "against the assessment or against the application to the taxpayer of the provision or against the denial of or the failure to allow or deny the amount claimed to have been erroneously paid as tax", in the second sentence, after "and the tax", added "credit, rebate, property or provision of the Tax Administration Act", and in the third sentence, after "summary statement of the evidence", added "if any", after "supporting each ground asserted", deleted "if any", and after "protest pursuant to", deleted "Subsection D of this" and after "Section", added "7-1-24.1 NMSA 1978", and added the last sentence; in Subsection C, in the first sentence, after "shall be filed within", deleted "thirty" and added "ninety", after "date of the mailing to", added "or service upon", after "notice of assessment or", deleted "mailing to, or service upon, the taxpayer of", after "peremptory notice or demand", deleted "or", and after "date of mailing or filing a return" added the remainder of the sentence, deleted the former second sentence which provided for an extension of time to file a protest, in the current second sentence, after "within the time required", deleted "for filing a protest or, if an extension has been granted, within the extended time", deleted the former third sentence, which provided for a retroactive extension of time to file a protest, in the current third sentence, after "taxpayer's inability to protest", deleted "or request an extension of time for filing a protest", and deleted the former fourth sentence which prohibited a retroactive extension of time to file a protest if there is a levy or jeopardy assessment; deleted former Subsection C, which provided for claims for refund; deleted former Subsection D, which provided for the setting of a hearing date; deleted former Subsection E, which provided for the appointment of a hearing officer and the procedure for a hearing; deleted former Subsection F, which prohibited a hearing officer from engaging in activity as an employee of the department other than conducting the hearing; deleted former Subsection G, which prohibited ex-parte communications; deleted former Subsection H, which provided guidelines for ruling on the admissibility of evidence; deleted former Subsection I, which provided guidelines for conducting hearings; deleted former Subsection J, which provided for the creation of a record and required the hearing officer to issue a written decision and to inform the taxpayer of the right of appeal; and deleted former Subsection K, which provided for the consolidation of multiple protests.

Applicability. — Laws 2013, ch. 27, § 13 provided that the following time limits for filing a written protest shall apply pursuant to that version of Section 7-1-24 NMSA 1978 in effect:

A. immediately prior to July 1, 2013, if the date of mailing or service of process, application of the applicable provision of the Tax Administration Act, denial or failure to deny or allow with the time prescribed occurred on or before June 1, 2013; or

B. on or after July 1, 2013, if the date of mailing or service of process, application of the applicable provision of the Tax Administration Act, denial or failure to deny or allow with the time prescribed occurred on or after June 2, 2013.

The 2003 amendment, effective July 1, 2003, substituted "D" for "E" following "pursuant to Subsection" near the end of Subsection A; added present Subsections F and G and redesignated the subsequent subsections accordingly; added "A taxpayer may request a written ruling on any contested question of evidence in a matter in which the taxpayer has filed a written protest and that protest is pending" following "is in reasonable doubt." at the end of present Subsection H; added "A taxpayer may request a written ruling on any contested question of procedure in a matter in which the taxpayer has filed a written protest and that protest is pending" following "evidence presented and admitted." at the end of present Subsection L; and added Subsection K and redesignated former Subsection I as present Subsection L.

The 2000 amendment, effective July 1, 2000, in Subsection A, deleted "or taxes" following "shall identify the taxpayer and the tax" in the second sentence and specified that a taxpayer has until ten days before the hearing to supplement his statement of grounds for protest or, if a scheduling order has been issued, must act in accordance with the scheduling order; and substituted "Section 7-1-31 or 7-1-33" for "Sections 7-1-31, 7-1-33 and 7-1-34" in Subsection B.

The 1993 amendment, effective July 1, 1993, in Subsection A, substituted "against the denial of or the failure to allow or deny" for "a written claim for refund of" near the end of the first sentence, rewrote the second sentence which read "Every protest shall state the nature of the taxpayer's complaint and the affirmative relief requested", inserted the current third sentence, and made a minor stylistic change; rewrote Subsection B; and, in Subsection H, deleted the former final sentence which read "All decisions and orders shall be signed by the secretary".

The 1989 amendment, effective June 16, 1989, in Subsection A, inserted "or the denial of, or failure to either allow or deny, a claim for refund made in accordance with Section 7-1-26 NMSA 1978"; in Subsection B, in the next-to-last sentence, substituted "protest" for "appeal" in two places; in Subsection D, deleted "or a request for hearing after denial of a claim for refund" preceding "the department or hearing officer"; in Subsection G, in the last sentence, inserted "permit discovery"; in Subsection H, in the first sentence, deleted "or claim for refund" following "any protest", in the third sentence, deleted "The hearing officer may announce the decision at the conclusion of the hearing or may take the matter under advisement, but he shall, in either case" from the beginning, substituted "The hearing officer" for "The secretary", inserted "of the hearing, shall", deleted "or claimant" preceding "in writing"; and made minor stylistic changes throughout the section.

Claims for refund. — Subsection B of this section does not mention claims for refund. Kilmer v. Goodwin, 2004-NMCA-122, 136 N.M. 440, 99 P.3d 690.

Defects in proceedings. — The hearing officer's failure to take an oath or obtain a faithful performance bond; the failure of the hearing officer to submit a written request to the IRS for federal tax information as provided in 26 U.S.C. §6103(d)(1); the reliance by the hearing officer on the IRS Income Tax Examination Changes; and the lack of a valid control number on applicable tax forms as provided in the Paperwork Reduction Act, 44 U.S. C. §§ 3501 to 3520, do not affect the taxpayer's tax liability or absolve the taxpayer of liability. Stockton v. N.M. Taxation and Revenue Dept., 2007-NMCA-071, 141 N.M. 860, 161 P.3d 905.

Appealable final order. — Hearing officer's order dismissing taxpayer's appeal was not an appealable final order, since it had not been approved or signed by the secretary of taxation and revenue. Harris v. Revenue Div. of Taxation & Revenue Dep't, 1987-NMCA-034, 105 N.M. 721, 737 P.2d 80 (decided under prior law).

No abatement of assessment for lack of prompt hearing. — Assessments are not abated merely because taxpayers were not given prompt hearing on protests. In re Ranchers-Tufco Limestone Project Joint Venture, 1983-NMCA-126, 100 N.M. 632, 674 P.2d 522, cert denied, 100 N.M. 506, 672 P.2d 1136.

Thirty-day requirement for hearing officer decision does not affect "the essential power" of the hearing officer to decide complex and time-consuming tax protests. Kmart Props., Inc. v. N.M. Taxation & Revenue Dep't., 2006-NMCA-026, 139 N.M. 177, 131 P.3d 27, rev'd on other grounds, Kmart Corp. v. N.M. Taxation and Revenue Dep't, 2006-NMSC-006, 139 N.M. 172, 131 P.3d 22.

Taxpayer appearing alone does so at own peril. — Taxpayer has a right to appear by himself or by an attorney or an accountant, but if he chose to appear alone, he appeared at his own peril. McConnell v. State ex rel. Bureau of Revenue, 1971-NMCA-181, 83 N.M. 386, 492 P.2d 1003.

Hearing officer need not assume duties of counsel at second hearing. — Since taxpayer's rights were amply protected at the first hearing, and the second hearing was a continuation of the first, at which the only issue was taxpayer's duty to secure additional proof that its sales were nontaxable transactions, taxpayer was granted a full and fair hearing, at which he voluntarily and willingly waived his right to counsel, and the hearing officer was not required to assume the duties of counsel for taxpayer at the second hearing. Al Zuni Traders v. Bureau of Revenue, 1977-NMCA-025, 90 N.M. 258, 561 P.2d 1351.

Taxpayer must establish timely filing. — Where a taxpayer failed to establish that he filed a protest of an audit by the taxation and revenue department within 30 days of notice, as required by this section, the issue of an improper audit was not before the hearing officer. Lopez v. N.M. Dep't of Taxation & Revenue, 1997-NMCA-115, 124 N.M. 270, 949 P.2d 284, cert. denied, 124 N.M. 311, 950 P.2d 284.

Decision upheld when arguments based on taxpayer's unpreparedness. — Since the record showed that hearing officer carefully advised taxpayer as to the statutory procedures and his rights in connection with hearing and it also showed the taxpayer did not come prepared for the hearing, taxpayer's claims that revenue bureau (department) should have given him opportunity to present his evidence at a later time and, although it was his burden to proceed, that he was denied the right to cross-examine a witness who was never called were based on taxpayer's lack of preparation and do not provide a basis for overturning the commissioner's (hearing officer's) decision. McConnell v. State ex rel. Bureau of Revenue, 1971-NMCA-181, 83 N.M. 386, 492 P.2d 1003.

Technical rules of evidence do not apply in hearings before the commissioner (hearing officer) and as the oral evidence provided reasonable substantiation of the documents, they were properly admitted. Garfield Mines Ltd. v. O'Cheskey, 1973-NMCA-128, 85 N.M. 547, 514 P.2d 304.

Evidential rules governing weight, applicability or materiality not limited. — The rules governing the admissibility of evidence before administrative boards are frequently relaxed to expedite administrative procedure but the rules relating to weight, applicability or materiality of evidence are not thus limited. Eaton v. Bureau of Revenue, 1972-NMCA-114, 84 N.M. 226, 501 P.2d 670, cert. denied, 84 N.M. 219, 501 P.2d 663.

Director (hearing officer) has no authority to catalogue which evidence considered. — The state has not given to the commissioner (hearing officer) authority to catalogue which evidence shall be considered in determining a taxpayer's employment status. Eaton v. Bureau of Revenue, 1972-NMCA-114, 84 N.M. 226, 501 P.2d 670, cert. denied, 84 N.M. 219, 501 P.2d 663.

If testimony based on supposition, Subsection H not satisfied. — Since taxpayer's books and records are not adequate to permit an accurate computation of the state tax, and his testimony is based on supposition and guess, he does not satisfy the requirements of Subsection H. Archuleta v. O'Cheskey, 1972-NMCA-165, 84 N.M. 428, 504 P.2d 638.

Ruling reversed if director (hearing officer) failed to consider all evidence. — Since the commissioner (hearing officer), before arriving at a decision, did not consider all of the evidence presented at the hearing but only that pertaining to the "indicia" under G.R. Regulation 12.5:1 (3.2.105.7 NMAC), the court could not say that he would have reached the same conclusion had all of "the evidence presented and admitted" been considered, as required by Subsection G (Subsection I), and, therefore, held the ruling reversed for arbitrariness. Eaton v. Bureau of Revenue, 1972-NMCA-114, 84 N.M. 226, 501 P.2d 670, cert. denied, 84 N.M. 219, 501 P.2d 663.

Evidence presented after hearing. — Where the taxpayer's alternative theory for a deduction was raised in the taxpayer's formal protest; the issue was not set forth in the prehearing statement of issues; and the taxpayer failed to tender any evidence on the issue at the hearing, the hearing officer did abuse the officer's discretion by refusing to consider evidence tendered by the taxpayer in a post-hearing brief forty days after the hearing. TPL, Inc. v. N.M. Taxation & Revenue Dep't, 2000-NMCA-083, 129 N.M. 539, 10 P.3d 863, rev'd on other grounds, 2003-NMSC-007, 133 N.M. 447, 64 P.3d 474.

Record must indicate reasoning and basis for denial. — Although the commissioner (hearing officer) is not required to make formal findings of fact and conclusions of law, the record presented to the court for review must indicate his reasoning and the basis on which he denied the taxpayer's protest and in the absence of this matter must be remanded to him for further proceedings. Title Servs., Inc. v. Comm'r of Revenue, 1974-NMCA-014, 86 N.M. 128, 520 P.2d 284.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 71 Am. Jur. 2d State and Local Taxation §§ 603 to 605; 72 Am. Jur. 2d State and Local Taxation §§ 782 to 787, 802 to 809, 812 to 816.

Notice to property owners of increase in assessment or valuation by board of equalization or review, 24 A.L.R. 331, 84 A.L.R. 197.

Power or duty of tax review or equalization boards to act after date for adjournment or closing of books, 105 A.L.R. 624.

Power of board of tax review to receive evidence as to assessable value, without notice to taxpayer, 113 A.L.R. 990.

Sufficiency of compliance with statute providing for service by mail of notice in tax procedure, 155 A.L.R. 1279.

84 C.J.S. Taxation §§ 678 to 751.