Was a traveling psychiatrist still a New Mexico resident when he spent fewer than 185 days here and worked entirely in other states?

Plain-English summary

Rohana Calnaido remained domiciled in New Mexico for 2008 and 2009 even though he spent fewer than 185 days here and worked entirely in other states. His voting, driver's licenses, tax-return addresses, stored property, and repeated use of his partner's Albuquerque homes showed no completed permanent change of domicile.

Calnaido was a psychiatrist licensed in North Carolina, Wisconsin, and Washington, but never licensed or employed in New Mexico. He owned no New Mexico real property.

He worked in Seattle from January to March 2008, Houston from March 2008 through June 2009, and Raleigh from late August 2009 onward. He rented hotel rooms or apartments in each location.

Physical presence was not the disputed basis

New Mexico residency could arise through either 185 days of physical presence or domicile during part of the year without a completed change by year-end.

Calnaido spent only 20 to 40 days in New Mexico in 2008 and about 40 days in 2009, primarily weekends and holidays with his partner. The decision agreed that he did not meet the physical-presence test.

Domicile, however, could continue without current physical presence. Once established, it remained until the person both lived elsewhere and formed a fixed intent to make the new location a permanent or indefinite home. A temporary work move did not suffice.

Four factors supported residence elsewhere

Calnaido rented housing outside New Mexico, spent most of his time outside the state, worked only outside New Mexico, and held medical licenses elsewhere. Those domicile factors supported his position.

He also registered a vehicle in Texas in November 2008, obtained a temporary Texas driver's license and voter registration in March 2009, and rented a Houston apartment before moving to Raleigh.

New Mexico conduct carried greater weight

Other factors supported New Mexico domicile:

• His partner moved to Albuquerque in September 2007, and Calnaido obtained an eight-year New Mexico driver's license that month.
• He stored large appliances at his partner's Albuquerque addresses and spent nonwork time there.
• He affirmatively registered to vote in Bernalillo County in September 2008 and cast a New Mexico absentee ballot in the general election.
• His original 2008 federal return, 2009 federal return, Schedule C, employer W-2s, and multiple financial statements used Albuquerque addresses.
• When leaving his Houston apartment in June 2009, he listed his reason as moving to New Mexico.
• Despite then working in North Carolina, he reapplied for a New Mexico driver's license in November 2009 and registered his vehicle here in December.

The active 2008 New Mexico voter registration was especially persuasive because it was not a passive holdover. The brief Texas license and voter registration did not prove a permanent Texas domicile when later conduct returned to New Mexico ties.

Convenience-address explanations did not overcome the pattern

Calnaido said he used his partner's addresses for reliable mail while traveling. The decision found that understandable but incomplete.

He could have obtained a post-office box, had used a Texas friend's address for vehicle registration, and could have used that address for other purposes if he truly intended Texas domicile. Instead he repeatedly chose Albuquerque for official records.

The assessment presumption and totality of the domicile factors therefore were not overcome.

Balances and possible allocation

The Department had partially abated $2,140.69 from the original 2008 assessment before hearing.

Result: protest DENIED. At the hearing, Calnaido owed:

• 2008: $1,626.00 tax, $325.20 penalty, and $261.18 interest, totaling $2,212.38.
• 2009: $3,443.00 tax, $688.60 penalty, and $415.33 interest, totaling $4,546.93.

The combined balance was $6,759.31, with continuing interest.

The decision said Calnaido might still qualify for some 2009 abatement through allocation and apportionment of income tax paid to North Carolina. It did not determine that amount.

What this means for you

Professionals working temporary assignments

Living and working elsewhere does not automatically change domicile. Align voting, driver's licenses, return addresses, property, family ties, and stated move intentions with the permanent home you actually intend.

Taxpayers using a convenient mailing address

Repeatedly using one state's address on returns and financial records can carry domicile weight even if the reason is reliable mail. Document the temporary nature of the arrangement and stronger ties to the claimed new home.

Residents paying tax to another state

Residency may make worldwide income taxable, but allocation or credits can reduce double taxation. Preserve the other state's return and payment records.

Common questions

Q: Was Calnaido physically present in New Mexico for 185 days?
A: No. The decision found at most 40 days in either year.

Q: Why did New Mexico still treat him as resident?
A: Domicile was an independent basis, and he did not prove a permanent change from New Mexico by either year-end.

Q: Did the Texas driver's license establish Texas domicile?
A: No. It lasted about eight months and was followed by a new New Mexico license while he worked in North Carolina.

Q: Was the entire 2009 assessment necessarily final?
A: The protest was denied, but the decision left open possible apportionment relief for income taxed by North Carolina.

Citations and references

Statutes and regulation:

• NMSA 1978, §§ 7-2-2(S) and 7-2-3 — resident definition and tax on resident net income
• Regulation 3.3.1.9(C) NMAC — domicile definition, change, temporary absence, and factors
• NMSA 1978, § 7-2-11 — non-New Mexico income allocation and apportionment
• NMSA 1978, §§ 7-1-17(C), 7-1-67, and 7-1-69 — assessment presumption, interest, and penalty

Cases cited:

• Murphy v. Taxation and Revenue Department, 1980-NMSC-012 — residency and domicile
• Hagan v. Hardwick, 1981-NMSC-002 — continuing domicile and requirements for change
• Estate of Peck v. Chambers, 1969-NMSC-054 — domicile principles

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Rohana Calnaido
• Decision PDF: D&O 14-08

Original ruling text

BEFORE THE HEARING OFFICER
OF THE TAXATION AND REVENUE DEPARTMENT
OF THE STATE OF NEW MEXICO

IN THE MATTER OF THE PROTEST OF
ROHANA CALNAIDO No. 14-8
TO ASSESSMENTS ISSUED UNDER LETTER
ID NO.’s L1784928576 and L1324071232

DECISION AND ORDER

A protest hearing occurred on the above captioned matter on February 3, 2014 before

Brian VanDenzen, Esq., Tax Hearing Officer, in Santa Fe. Dr. Rohana Calnaido (“Taxpayer”)

appeared, represented by Attorney Thomas Smidt II, whom also appeared. Staff Attorney Aaron

Rodriguez appeared representing the State of New Mexico, Taxation and Revenue Department

(“Department”). Protest Auditor Milagros Bernardo appeared as a witness for the Department.

Taxpayer Exhibits #1-34 and Department Exhibits A-C, and Z were admitted into the record, as

described more thoroughly in the Administrative Protest Hearing Exhibit Log. Based on the

evidence and arguments presented, IT IS DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On June 13, 2012, the Department assessed Taxpayer $4,722.96 in personal

income tax, $944.59 in penalty, and $550.41 in interest for a total of $6,217.96 for the personal

income tax period ending December 31, 2008. [Letter id. L1784928576].

2. On July 6, 2012, Taxpayer protested the Department’s assessment of 2008

personal income tax.

3. On July 20, 2012, the Department assessed Taxpayer $3,443.00 in personal

income tax, $688.60 in penalty, and $274.53 in interest for a total of $4,406.13 for the personal

income tax period ending December 31, 2009. [Letter id. L1324071232; Dept. Ex. Z].

4. On July 20, 2012, Taxpayer protested the Department’s assessment of 2009

personal income tax. [Dept. Ex. Z].

5. On August 8, 2013, the Department requested a hearing with the Hearings Bureau

in this matter, listing only Taxpayer’s protest of the assessment of personal income tax and

attaching only the assessment of 2008 personal income tax under letter id. no. L17842928576.

The Hearings Bureau had no information related to the assessment of 2009 personal income tax.

6. On August 13, 2013, the Hearings Bureau issued Notice of Administrative

Hearing for the protest of assessment letter id. no. L17842928576, setting this matter for a

protest hearing on December 16, 2013.

7. On November 19, 2013, Taxpayer moved to continue the scheduled December 16,

2013 hearing date. The Department opposed the request for continuance.

8. On November 20, 2013, the Hearings Bureau issued an Order Granting

Continuance and Amended Notice of Hearing, setting this matter for hearing on February 3,

2014.

9. At the commencement of the protest hearing, the Department indicated at the

beginning of the hearing that the protest also encompassed Taxpayer’s protest of the assessment

of 2009 personal income tax. Taxpayer’s attorney indicated that Taxpayer had prepared to

contest both assessments at hearing and wished to proceed under both assessments during the

hearing rather than return for an additional setting. [2-3-14 CD 0:03:31-0:05:23; 0:08:00-

0:09:19].

10. Taxpayer was a licensed Psychiatrist during tax years 2008 and 2009 in North

Carolina, Wisconsin, and Washington. [2-3-14 CD 2:33:20-2:33:52].

In the Matter of the Protest of Rohana Calnaido, page 2 of 17

11. Taxpayer has never applied to be a licensed Psychiatrist in New Mexico. [2-3-14

CD 2:35:10-36].

12. Taxpayer has never practiced or worked for any medical facility in New Mexico.

[2-3-14 CD 1:30:20-1:31:49; 2:30:10-18; 2:32:30-45].

13. Taxpayer has never owned any interest in property in New Mexico. [2-3-14 CD

0:57:18-39].

14. Taxpayer’s partner, Dr. Michele Guindani, moved from North Carolina to New

Mexico in September 2007 and at all relevant times thereafter resided in Albuquerque, NM.

Because he moved during the relevant period, Dr. Guindani had two addresses in Albuquerque,

an address on Eubank Blvd. and an address on Oso Grande Ct. [Dept. Ex. B; 2-3-14 CD

0:57:12-59; 2:29:40-2:30:25].

15. Taxpayer stored some of his large belongings like appliances at Dr. Guindani’s

addresses in Albuquerque. [2-3-14 CD 00:29:40-0:30:20].

16. Taxpayer visited Dr. Guindani in New Mexico a couple of weekends in 2007. [2-

3-14 CD 2:31:10-2:32:30].

17. Taxpayer spent non-work periods such as weekends and holidays at Dr.

Guindani’s addresses in Albuquerque. [Dept. Ex. B].

18. In 2008, Taxpayer visited Dr. Guindani in New Mexico for at most 20-to-40-days

in 2008 and 40-days in 2009. [2-3-14 CD 2:36:08-50].

19. On September 8, 2007, Taxpayer applied for a New Mexico Driver’s license,

which remained valid for eight years through 2015. [Taxpayer Ex. #31, p. 138 & p. 145].

20. In late 2007, Taxpayer worked in Houston, TX at the Houston VA Medical

Center. [Taxpayer Ex. #32, p. 60; 2-3-14 CD 1:58:50-1:59:46].

In the Matter of the Protest of Rohana Calnaido, page 3 of 17

21. On January 1, 2008, Taxpayer moved to Seattle, WA, and remained there through

March 10, 2008. [Taxpayer Ex. #1-2].

22. Taxpayer worked as a Psychiatrist in Seattle, WA, for the University of

Washington Harborview Medical Center from January 2008 through March 2008, with an

additional week in April of 2008. [Taxpayer Ex. #32, page 59; 2-3-14 CD 1:00:05-35].

23. On March 10, 2008, Taxpayer moved to Houston, TX. Taxpayer remained in

Houston through July of 2009 [Taxpayer Ex. #3; 2-3-14 CD 1:04:05-1:04:42].

24. While in Houston, TX, Taxpayer worked for Medical Doctor Associates (which

changed its name at some point to Crystal M, Inc.) as a contractor with Houston’s VA Medical

Center, where he remained through June of 2009. [Taxpayer Ex. #4; Taxpayer Ex. #32, page

58; 2-3-14 CD 1:08:0-50].

25. In 2008, Taxpayer did not believe he qualified to register to vote in Texas because

he was residing in a hotel. Taxpayer believed his only option was to register to vote in New

Mexico. [2-3-14 CD 1:39:01-1:40:56].

26. On September 28, 2008, Taxpayer registered to vote in Bernalillo County, NM.

Taxpayer’s voter registration application listed his address as on Eubank Blvd. in Albuquerque,

NM. [Taxpayer Ex. 31, page 144].

27. On or before November 4, 2008, Taxpayer voted absentee in New Mexico in the

2008 general election. [Taxpayer Ex. 31, page 127; 2-3-14 CD 1:42:25-1:42:34].

28. On or about November 10, 2008, Taxpayer received a permanent employment

position at the Houston VA. [Taxpayer Ex. 32, p. 54-55; 2-3-14 CD 1:04:01-1:04:15; 1:56:30-

1:57:30].

In the Matter of the Protest of Rohana Calnaido, page 4 of 17

29. On November 18, 2008, Taxpayer registered his vehicle in Texas, listing the

address of a friend in Texas. [Taxpayer Ex. #8; Taxpayer Ex. #31, p. 132; 2-3-14 CD 2:23:50-

2:25:14].

30. On December 20, 2008, Taxpayer moved into an apartment in Houston, TX on

Brompton Street. [Taxpayer Ex. #9].

31. On March 20, 2009, using his Brompton Street apartment address, Taxpayer

obtained a temporary Texas Driver’s License. With this application for license, Taxpayer

registered to vote in Texas. [Taxpayer Ex. #25; Taxpayer Ex. #32, p. 50; 2-3-14 CD 1:21:01-

23].

32. Taxpayer left his Houston Apartment on June 29, 2009, listing his reason for

moving out as moving to New Mexico. [Taxpayer Ex. #10].

33. Taxpayer worked with Interim Physicians in Raleigh, NC from late August 2009

through June 2010. [2-3-14 CD 1:33:40-59].

34. Beginning on August 22, 2009 through December 31, 2009 and continuing into

2010, Taxpayer rented a room at the Residence Inn in Raleigh, NC. [Taxpayer Ex. #11-12].

35. On November 14, 2009, Taxpayer applied for a New Mexico driver’s license,

listing his address as on Oso Grande Ct in Albuquerque, NM. [Taxpayer Ex. #31, p. 140].

36. On December 12, 2009, Taxpayer registered his vehicle in New Mexico.

[Taxpayer Ex. #26].

37. Taxpayer’s 2008 Fidelity Investments Form 1099-DIV listed his address as on

Oso Grande Ct in Albuquerque, NM. [Taxpayer Ex. #13-14].

38. Taxpayer’s 2008 Bancorp Bank Form 1098 listed his address as on Eubank Blvd.

in Albuquerque, NM. [Taxpayer Ex. #15].

In the Matter of the Protest of Rohana Calnaido, page 5 of 17

39. Taxpayer’s 2008 W-2’s from his employment at the University of Washington

Medical Center listed his address as on Eubank Blvd. in Albuquerque, NM. [Taxpayer Ex. #16].

40. Taxpayer’s 2008 W-2’s from the VA from his work at the Houston VA Medical

Center listed his address as on Oso Grande Ct in Albuquerque, NM. [Taxpayer Ex. #17].

41. Taxpayer’s 2008 W-2’s from Medical Doctor Associates, LLC, for his contract

work at the Houston VA Medical Center listed his address as on Eubank Blvd. in Albuquerque,

NM. [Taxpayer Ex. #18].

42. Taxpayer’s 2008 W-2’s from Crystal M, Inc., for his contract work at the Houston

VA Medical Center listed his address as on Eubank Blvd. in Albuquerque, NM. [Taxpayer Ex.

19].

43. Taxpayer’s 2008 Countrywide Bank Form 1099-INT listed his address as on

Eubank Blvd. in Albuquerque, NM. [Taxpayer Ex. #20].

44. Taxpayer’s 2008 Charles Schwab & Co., Inc. Form 1099 listed his address as on

Oso Grande Ct in Albuquerque, NM. [Taxpayer Ex. #22].

45. Taxpayer’s 2008 Schedule C, filed with the IRS, listed Taxpayer’s business

address as on Eubank Blvd. in Albuquerque, NM. [Taxpayer Ex. #28].

46. Taxpayer’s 2009 Form 1040 Income Tax Return, filed with the IRS, listed his

address as on Oso Grande Ct in Albuquerque, NM. [Taxpayer Ex. #30].

47. Taxpayer filed and paid 2009 North Carolina personal income tax. Taxpayer’s

2009 North Carolina personal income tax return listed his address as on Oso Grande Ct in

Albuquerque, NM. [Taxpayer Ex. #29; 2-3-14 CD 1:34:00-09].

In the Matter of the Protest of Rohana Calnaido, page 6 of 17

48. On April 13, 2010, Taxpayer amended his 2008 IRS Individual Income Tax

return. That returned listed Taxpayer’s address as on Brompton St. in Houston, TX. [Taxpayer

Ex. #27].

49. Taxpayer did not file 2008 and 2009 New Mexico personal income taxes and was

assessed as a non-filer. [2-3-14 CD 3:07:00-3:08:47; 3:12:50-3:13:34].

50. Although Taxpayer submitted a 2008 PIT-1 New Mexico Personal Income Tax

into the record, that document is undated and it is unclear when if ever it was submitted to the

Department. The Brompton St. Houston address listed on Taxpayer’s 2008 PIT-1 is different

from the address listed on Taxpayer’s 2008 IRS 1040 return, which strongly suggests that

Taxpayer did not file the New Mexico 2008 PIT-1 return at the same time he filed his federal

income tax return. [Taxpayer Ex. #21; 2-3-14 CD 3:08:50-3:09:50].

51. On June 13, 2013, the Department partially abated the assessment of 2008

personal income tax in the total amount of $2,140.69. [Taxpayer Ex. # 33; 2-3-14 CD 3:01:00-

3:02:35].

52. As of the date of the hearing, Taxpayer owed $1,626.00 in 2008 personal income

tax, $325.20 in penalty, $261.18 in interest for a total 2008 outstanding liability of $2,212.38. As

of the date of the hearing, Taxpayer owed $3,443.00 in 2009 personal income tax, $688.60 in

penalty, $415.33 in interest for a total 2009 outstanding liability of $4,546.93. The combined

outstanding liability totaled $6,759.31 as of the date of hearing. [Department Ex. C].

DISCUSSION

The issue at protest is whether in personal income tax years 2008 and 2009, Taxpayer

was a resident of New Mexico subject to state personal income tax. Taxpayer argues that he was

a resident of Seattle, WA, Houston, TX, or Raleigh, NC in 2008 and 2009 because he was not

In the Matter of the Protest of Rohana Calnaido, page 7 of 17
physically present in New Mexico for 185-days or more in those years and because he intended

to reside at those locations outside of New Mexico in 2008 and 2009. The Department argues

that Taxpayer was domiciled in New Mexico during that time, and thus Taxpayer was a resident

regardless of his lack of physical presence in New Mexico during those years.

Presumption of Correctness and Burden of Proof

Under NMSA 1978, Section 7-1-17(C) (2007), the assessments issued in this case are

presumed correct. Consequently, the Taxpayer has the burden to overcome the assessment of

personal income tax. See Archuleta v. O'Cheskey, 1972-NMCA-165, ¶11, 84 N.M. 428. However,

once a taxpayer rebuts the presumption of correctness, the burden shifts to the Department to show

the correctness of the assessed tax. See MPC Ltd. v. N.M. Taxation & Revenue Dep't, 2003-NMCA-

21, ¶13, 133 N.M. 217.

Personal Income Tax, Residency, and Domicile

Payment of New Mexico personal income tax is governed by NMSA 1978, §§ 7-2-1 to

36. Unless otherwise exempted by law, a tax is imposed “upon the net income of every” New

Mexico resident. NMSA 1978, §7-2-3 (1981). The question in this protest is whether Taxpayer

was a resident of New Mexico in income tax years 2008 and 2009.

NMSA 1978, § 7-2-2 (S) (2003, amended 2010) of the Income Tax Act defines the term

“resident” as:

an individual who is domiciled in this state during any part of the taxable
year or an individual who is physically present in this state for one
hundred eighty-five days or more during the taxable year; but any
individual, other than someone who was physically present in the state for
one hundred eighty-five days or more during the taxable year, who, on or
before the last day of the taxable year, changed the individual's place of
abode to a place without this state with the bona fide intention of
continuing actually to abide permanently without this state is not a
resident for the purposes of the Income Tax Act [7-2-1 NMSA 1978] for
periods after that change of abode; (emphasis added).

In the Matter of the Protest of Rohana Calnaido, page 8 of 17
Under this statute there are two possible basis of residency in New Mexico: either the person was

physically present in New Mexico for 185-days or the person was domiciled within the state

during any part of the tax year and did not change domicile to a new location by the last day of

the tax year.

In this case, the evidence clearly established that Taxpayer was not physically present in

New Mexico for 185-days or more in 2008 or 2009. During 2008, Taxpayer lived and worked in

Seattle, WA for approximately 3.5 months, and lived and worked in Houston, TX for the

remaining time. In 2009, Taxpayer lived and worked in Houston, TX for the first six months, and

lived and worked in Raleigh, NC for the last four months of the year. At most, Taxpayer spent

40-days in New Mexico during any one year during the relevant period. Since Taxpayer did not

meet the 185-day physical presence residency requirement, the only possible basis of residency

under Section 7-2-2 (S) for income tax purposes is if Taxpayer was domiciled within New

Mexico during any part of income tax year 2008 or 2009 and did not change that domicile before

the last day of the taxable year.

New Mexico case law has considered the term domicile extensively. In Murphy v.

Taxation & Revenue Department, 1980-NMSC-012, ¶7, 94 N.M. 54, the New Mexico Supreme

Court found that definition of “resident” depended on a person’s domicile and intent. The

Murphy court declared that for income tax purposes, residency is synonymous with domicile:

“A New Mexico ‘resident’ is an individual domiciled in New Mexico at anytime during the

taxable year who does not intentionally change his domicile by the end of the year.” id.

This definition of residency as synonymous with domicile was further affirmed a year

later by the New Mexico Supreme Court in Hagan, v. Hardwick, 1981-NMSC-002, ¶10, 95 N.M.

517. In Hagen, the court also found that domicile “does not require physical presence but rather

In the Matter of the Protest of Rohana Calnaido, page 9 of 17
physical presence in this state at some time in the past, and concurrent intention to make the state

one’s home.” id., ¶10 (internal citations omitted). As the court further explained in Hagan,

to effect a change from an old and established domicile to a new one, there
must be...a fixed purpose to remain in the new location permanently or
indefinitely. For domicile once acquired is presumed to continue until it is
shown to have changed, and to show the change two things are
indispensable,--First, residence in the new locality; and, second, the
intention to remain there.... Mere absence from a fixed home, however
long continued, cannot work the change.

id., ¶11 (internal citations omitted). See also Estate of Peck v. Chambers, 1969-NMSC-054, ¶5-

6, 80 N.M. 290.

In addition to the statute and case law, Regulation 3.3.1.9 (C) NMAC (04/28/06)

addresses domicile in New Mexico. Agency regulations interpreting a statute are presumed proper

and are to be given substantial weight. See Chevron U.S.A., Inc. v. State ex rel. Dep't of Taxation &

Revenue, 2006-NMCA-50, ¶16, 139 N.M. 498. Regulation 3.3.1.9 (C) (1) NMAC (04/28/06),

defines domicile as

…the place where an individual has a true, fixed home, is a permanent
establishment to which the individual intends to return after an absence,
and is where the individual has voluntarily fixed habitation of self and
family with the intention of making a permanent home.

Regulation 3.3.1.9 (C) (1) NMAC (04/28/06) concludes by stating that “every individual has a

domicile somewhere, and each individual has only one domicile at a time.”

Regulation 3.3.1.9 (C) (2) NMAC (04/28/06) makes clear that once domicile is

established, in order to establish a change of domicile, the person must move to a “new location

with the bona fide intention of making that location his or her permanent home.” Under

Regulation 3.3.1.9 (C) (3) NMAC (04/28/06), a person does not change their domicile if they

leave the state with the intention to stay away for a limited time to perform a contract or

accomplish a purpose and does not intend to remain in the new location once accomplished.

In the Matter of the Protest of Rohana Calnaido, page 10 of 17
Regulation 3.3.1.9 (C) (4) NMAC (04/28/06) directs the Department to give “due weight to an

individual’s declarations of intent. However, those declarations shall not be conclusive where

they are contradicted by facts, circumstances and the individual’s conduct.”

To determine domicile, Regulation 3.3.1.9(C) (4) NMAC (4/28/2006) provides twelve

domicile factors to consider (for brevity, these factors will be identified by their respective

subparagraph letter for the remainder of the decision):

(a) homes or places of abode owned or rented (for the individual's
use) by the individual, their location, size and value; and how they are
used by the individual;
(b) where the individual spends time during the tax year and how
that time is spent; e.g., whether the individual is retired or is actively
involved in a business, and whether the individual travels and the reasons
for traveling, and where the individual spends time when not required to
be at a location for employment or business reasons, and the overall
pattern of residence of the individual;
(c) employment, including how the individual earns a living, the
location of the individual's place of employment, whether the individual
owns a business, extent of involvement in business or profession and
location of the business or professional office, and the proportion of in-
state to out-of-state business activities;
(d) home or place of abode of the individual's spouse, children and
dependent parents, and where minor children attend school;
(e) location of domicile in prior years;
(f) ownership of real property other than residences;
(g) location of transactions with financial institutions, including the
individual's most active checking account and rental of safety deposit
boxes;
(h) place of community affiliations, such as club and professional
and social organization memberships;
(i) home address used for filing federal income tax returns;
(j) place where individual is registered to vote;
(k) state of driver's license or professional licenses;
(m) where items or possessions that the individual considers "near and
dear" to his or her heart are located, e.g., items of significant sentimental or
economic value (such as art), family heirlooms, collections or valuables, or pets.

Under the legal requirements of domicile and the domicile factors, Taxpayer did not

overcome the presumption of correctness that attached to the Department’s assessments. There is

In the Matter of the Protest of Rohana Calnaido, page 11 of 17
not enough information, or they are not applicable, to make any clear determinations about three

factors, (d), (e), or (f).

Four factors under Regulation 3.3.1.9 (C) (4) NMAC (4/28/2006) support Taxpayer’s

position that he was not domiciled in New Mexico in either 2008 or 2009. Under Factor (a),

location of homes owned or rented, Taxpayer rented extended stay hotel rooms or apartments in

Washington, Texas, and North Carolina in 2008 and 2009, while not renting or possessing any

ownership interest in New Mexico property during that time. Under Factor (b), where the person

spends time, Taxpayer spent a strong majority of his time working in other states in 2008 and

2009, while spending comparatively less time in New Mexico. While this factor is still overall

supportive of Taxpayer’s case, it is not of full weight because Taxpayer did spend time in New

Mexico with his partner on weekends and holiday when not required to be working in Seattle,

Houston, or Raleigh. Factor (c), employment activities, fully supports Taxpayer’s argument in

this matter because the evidence clearly established that Taxpayer employment always occurred

outside of New Mexico in 2008 and 2009. In fact, Taxpayer never worked in any capacity in

New Mexico during those years. Finally, Factor (h)—place of community and professional

memberships—supports Taxpayer’s position because Taxpayer was not licensed to practice

medicine in New Mexico, but licensed to practice in Washington and North Carolina.

In contrast, five factors under Regulation 3.3.1.9 (C) (4) NMAC (4/28/2006) lend various

levels of support to the Department’s assessments of 2008 and 2009 New Mexico Personal

Income Tax. Two factors are of medium weight in support of the Department’s assessments.

Under factor (g), location of financial transactions, there is very little evidence of Taxpayer’s

day-to-day financial transactions. However, all of the Taxpayer’s statements of accounts and

Form-1099’s list his address as in Albuquerque. Factor (m), location of items possession that an

In the Matter of the Protest of Rohana Calnaido, page 12 of 17
individual considers near and dear or of significant economic value, while not fully developed by

either party, supports the Department’s position because Taxpayer stored his large appliances—

items of significant economic value—at his partner’s home in Albuquerque in 2008 and 2009.

Three factors are of significant weight in favor of the Department. Under Factor (i),

Taxpayer listed his address as in Albuquerque on his 2008 and 2009 federal income tax returns.

Taxpayer also listed his business address as in Albuquerque on his Schedule C’s. Although H&R

Block prepared those tax returns, Taxpayer nevertheless had to sign those returns under penalty

of perjury attesting that to the best of his knowledge, the returns were true, correct, and complete.

Moreover, H&R Block would have had to rely on the information Taxpayer provided to it in

preparing Taxpayer’s returns. The address information Taxpayer voluntarily provided on his

federal tax return is a significant factor in determining Taxpayer’s domicile in those years.

Under Factor (j), Taxpayer actively registered to vote in New Mexico in 2008 and in fact

voted absentee in New Mexico in the general election that year. This is particularly persuasive

factor in this matter because this does not involve an instance of Taxpayer passively remaining

on the voter registration rolls in New Mexico from a previous year, but of Taxpayer affirmatively

filing a New Mexico voter registration and voting in 2008, a time he now claims he was not a

New Mexico resident. Taxpayer testified that he did so in 2008 because he did not believe he

could qualify to register in Texas; implicit in this testimony is that Taxpayer was aware he had

insufficient connections with Texas to qualify as a resident there while he believed he could still

qualify in New Mexico. It is true that in March of 2009, Taxpayer changed his voter registration

to Texas as part of his seeking a Texas driver’s license. However, Taxpayer took other actions

after the 2009 change in voter registration that are inconsistent with a change of domicile from

New Mexico to Texas, including obtaining a New Mexico driver’s license in late 2009, filing his

In the Matter of the Protest of Rohana Calnaido, page 13 of 17
federal tax returns using a New Mexico address in 2009, and listing his reason for moving out of

this Houston apartment as moving to New Mexico.

Finally, under Factor (k), Taxpayer maintained a New Mexico driver’s license in 2008

and 2009. While there is some countervailing evidence under this factor, mainly that Taxpayer

did apply for a Texas driver’s license in March of 2009, this factor still supports the Department.

Taxpayer applied for an eight-year New Mexico driver’s license in late 2007, and reapplied for a

New Mexico driver’s license in November 2009. Driver was only licensed to drive in Texas for

eight months between March and November 2009, while he was licensed to drive in New

Mexico for the remaining 16-months in 2008 and 2009. And rather than retaining his Texas

driver’s license or obtaining a North Carolina license upon relocating to Raleigh for work in late

2009, Taxpayer reestablished his New Mexico driver’s license. This action is indicative of

domicile under Regulation 3.3.1.9 (C) (3) NMAC (04/28/06): that Taxpayer was only going to

North Carolina to complete a work contract rather than to stay there once the purpose was

accomplished.

Taxpayer argued that many of the factors supporting domicile are explainable by his use

of his partner’s mailing address for convenience’s sake. While that is generally understandable,

there are three countervailing aspects that undermine the weight of that argument. First,

Taxpayer could have obtained a PO Box in any city he was located. Second, when leaving his

apartment in Houston in 2009, Taxpayer indicated that he was moving to New Mexico, rather

than just providing his former landlord with a convenient forwarding mailing address. Third, and

more importantly, Taxpayer in fact used the address of another friend in Texas to register his

vehicle in Texas. Taxpayer presumably could have used that same friend’s address for a whole

host of other purposes before he leased his Houston apartment, including obtaining a Texas’

In the Matter of the Protest of Rohana Calnaido, page 14 of 17
drivers license, registering to vote in Texas, as a mailing address for his financial statements, and

as the address on his federal tax filings. Rather than using his Texas’ friend’s address for these

other purposes, Taxpayer consistently choose to list his address in Albuquerque. This again

shows that Taxpayer never intended to switch his domicile from New Mexico to Texas.

Although the Department objected to the admission of Taxpayer Exhibit #34 as

undisclosed, it is admitted as a rebuttal exhibit that Taxpayer did not obtain until the day before

the hearing. However, Taxpayer Exhibit #34 is of less weight than Department Exhibit B, Dr.

Guidani’s earlier letter to the Department, which appears to be a more genuine factual statement

rather than a legal recitation of domicile. In any case, it is clear that Taxpayer spent time in New

Mexico, between 20-to-40-days in each relevant year, with Dr. Guindani.

In summary, the presumption of correctness places the burden on Taxpayer to overcome

the assessments. Here, Taxpayer obtained a New Mexico driver’s license in late 2007 when his

partner moved to New Mexico, spent time in New Mexico in 2008, stored his large appliances at

his partner’s home in New Mexico, used his New Mexico address on his federal tax filings,

actively registered to vote, and voted in New Mexico in 2008. This evidence established that

Taxpayer was domiciled in New Mexico in 2008, and Taxpayer did not present sufficient

evidence to establish a change of domicile to Washington, Texas, or North Carolina in 2008 or

2009. See Hagan, ¶10-11. Under the totality of all the evidence, particularly the address

information provided on the federal tax returns, the New Mexico voter registration in 2008, and

the New Mexico driver’s license applications in late 2007 and late 2009, Taxpayer was unable to

overcome the assessments in this matter.

Other than as an implicit corollary of his argument that he was not a New Mexico

resident subject to income tax, Taxpayer did not challenge the assessment of either interest or

In the Matter of the Protest of Rohana Calnaido, page 15 of 17
penalty at hearing. The Department properly assessed interest under NMSA 1978, Section 7-1-68

(2007) because the statute’s use of the word “shall” mandates imposition of interest. See Marbob

Energy Corp. v. N.M. Oil Conservation Comm'n, 2009-NMSC-013, ¶22, 146 N.M. 24 (use of the

word “shall” in a statute indicates provision is mandatory absent clear indication to the contrary).

The Department properly imposed a civil negligence penalty under NMSA 1978, Section 7-1-69

(2007). See Tiffany Construction Co. v. Bureau of Revenue, 1976-NMCA-127, ¶5, 90 N.M. 16

(imposing a reasonable duty on all persons to ascertain the tax consequences of their actions).

Consequently, Taxpayer did not overcome the Department’s assessment of 2008 and 2009

personal income tax, penalty, and interest and Taxpayer’s protest is denied1.

CONCLUSIONS OF LAW

A. Taxpayer filed a timely, written protest of the assessments of 2008 and 2009

personal income taxes, penalty, and interest, and jurisdiction lies over the parties and the subject

matter of this protest.

B. The Notice of Hearing only listed Taxpayer’s protest of the assessment of 2008

personal income tax because that is the only information the Department provided in its request

for hearing in this matter. However, by asserting he was prepared to proceed under both assessed

years rather than return for an additional hearing, Taxpayer effectively waived any due process

challenge to the Notice of Hearing’s listing of only the 2008 assessment of tax.

C. By obtaining a New Mexico driver’s license in late 2007 valid through the relevant

period, by actively registering to vote and voting in New Mexico in 2008, and by listing his address

in New Mexico on his 2008 IRS tax returns, Taxpayer was domiciled in New Mexico in 2008.

1
Taxpayer may be eligible for income allocation and apportionment under NMSA 1978, Section 7-2-11 (2001) for
his income taxable by North Carolina in 2009. To that extent, Taxpayer may be entitled to some further abatement
of the 2009 assessment.

In the Matter of the Protest of Rohana Calnaido, page 16 of 17
Taxpayer did not establish a change of domicile to any other state in 2008 or 2009. See Hagen, ¶10-

11.

D. On balance, under Regulation 3.3.1.9(C) (4) NMAC (4/28/2006), more factors

supported that Taxpayer was domiciled in New Mexico in 2008 and 2009.

E. Taxpayer did not overcome the presumption of correctness of the assessments under

NMSA 1978, Section 7-1-17 (C) (2007).

F. Under NMSA 1978, Section 7-1-67 (2007), Taxpayer is liable for accrued interest

under the assessments.

G. Taxpayer is liable for civil penalty pursuant to NMSA 1978, Section 7-1-69

(2007). See Tiffany Construction Co. v. Bureau of Revenue, 1976-NMCA-127, ¶5, 90 N.M. 16.

For the foregoing reasons, the Taxpayer's protest IS DENIED. As of the date of the

hearing, Taxpayer owed $1,626.00 in 2008 personal income tax, $325.20 in penalty, $261.18 in

interest for a total 2008 outstanding liability of $2,212.38. As of the date of the hearing,

Taxpayer owed $3,443.00 in 2009 personal income tax, $688.60 in penalty, $415.33 in interest

for a total 2009 outstanding liability of $4,546.93. Taxpayer may be eligible for some abatement

of 2009 personal income tax under Section 7-2-11 after allocation and apportionment of the

income tax paid in North Carolina that year. Otherwise, interest continues to accrue pursuant to

Section 7-1-67.

DATED: March 17, 2014.

Brian VanDenzen, Esq.
Tax Hearing Officer
Taxation & Revenue Department
Post Office Box 630
Santa Fe, NM 87504-0630

In the Matter of the Protest of Rohana Calnaido, page 17 of 17