Did Autoglass Technologies become liable for its predecessor's tax by continuing the same glass-repair business without a formal asset purchase?

Plain-English summary

Autoglass Technologies was a successor to a related automobile-glass company because the predecessor's supplies and goodwill transferred to the new business. A formal asset sale was unnecessary. Autoglass remained liable for $264,378.41 of tax, but the AHO abated $52,613.80 of penalty and $25,724.06 of interest.

Owner Tamara Jaramillo worked for her stepfather's glass-repair company before starting Autoglass in late 2014. The former company was going out of business, but both companies still operated during December 2014.

Autoglass:

• performed the same automobile glass repairs and windshield replacements;
• employed Jaramillo, her stepfather, her mother, and several other former-company workers;
• served some of the same customers, including glass companies and insurers;
• used Jaramillo's stepfather as a customer contact while he still conducted the former company's business; and
• leased a separate suite in the same office complex.

Autoglass reported zero December 2014 gross receipts despite conducting business and receiving payments that month. Jaramillo could not explain how the startup obtained its essential glass-repair supplies or its initial referrals.

Supplies and goodwill established successor status

Sections 7-1-61 through 7-1-63 required a successor in business to pay tax owed by the acquired business. Regulation 3.1.10.16 defined a successor broadly as a transferee of a business or its property and treated a single listed factor as enough to create a presumption of succession.

There was no documented sale between the two companies. But a transfer included any direct or indirect means of parting with business property.

The AHO inferred that the former company's supplies were used during Autoglass's startup. Both companies performed the same work with the same technicians, even though Autoglass lacked a demonstrated independent source for crucial supplies such as resin and repair bridges.

Goodwill also transferred. Autoglass kept many employees, worked from the same complex, took customers of the former company, and used the former owner as a customer contact.

Those transfers were outside the ordinary course of the predecessor's business, and a substantial portion of its glass-repair activity continued through Autoglass. The lack of assumed contracts, debts, or a noncompetition agreement did not overcome the successor presumption.

Penalty and interest did not follow the tax principal

The Department initially assessed:

• $264,378.41 of tax;
• $52,613.80 of penalty; and
• $25,724.06 of interest.

The decision applied Hi-Country Buick GMC, Inc. v. Taxation and Revenue Department, which held that “tax” in the successor statute did not include penalty or interest.

Autoglass therefore remained liable as a successor for the tax principal, but the penalty and interest were fully abated.

The Department missed the hearing deadlines but the protest survived

Autoglass filed its protest on October 6, 2015. Section 7-1B-8(A) required the Department to request a hearing within 45 days and required a hearing within 90 days of the protest.

The Department did not refer the matter to the AHO until January 5, 2016—after both periods had expired and without explaining the delay. The AHO promptly held a telephonic hearing eight days later.

The AHO found that the Department violated the statute. But the statute stated no remedy for missing the deadline, and New Mexico cases treated comparable public-officer and tax-decision deadlines as nonjurisdictional. The delay therefore did not require granting the protest or abating the tax.

Result: protest GRANTED IN PART AND DENIED IN PART. Autoglass was a successor and owed $264,378.41 of tax; $52,613.80 of penalty and $25,724.06 of interest were abated.

What this means for you

Buyers and founders continuing another business

Successor liability can arise without a purchase agreement. Receiving supplies, employees, customers, business contacts, or goodwill may show that business property changed hands.

Family businesses and related startups

Separate registration, a new bank account, and a separate office suite do not by themselves prevent successor status when the new company continues the same work through the predecessor's people, property, and customer relationships.

Taxpayers facing delayed protest hearings

The AHO treated the statutory deadlines as mandatory for the Department but not as an automatic basis to cancel an assessment. The available remedy depends on the governing statute and controlling law.

Common questions

Q: Was there a formal sale of the predecessor's assets?
A: No. The AHO inferred an indirect transfer of supplies and goodwill from the surrounding facts.

Q: Which facts most strongly supported successor status?
A: Autoglass performed the same work, used many of the same employees and customers, operated in the same complex, used the predecessor's owner as a contact, and did not explain how it independently obtained essential startup supplies or referrals.

Q: Did Autoglass assume the former company's contracts or debts?
A: The record showed no formal assumption of contracts, obligations, or unpaid debts, but other successor factors were enough.

Q: Why were penalty and interest abated?
A: The decision applied Hi-Country Buick, under which successor liability for “tax” did not include penalty or interest.

Q: Did the Department violate the protest-hearing statute?
A: Yes. It referred the protest after the 45-day request deadline and after the 90-day hearing deadline, but the statute supplied no automatic remedy for that delay.

Q: What amount remained assessed?
A: $264,378.41 of tax principal. The $52,613.80 penalty and $25,724.06 interest were abated.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-1-61 through 7-1-63 — successor-in-business duties and liability
• NMSA 1978, §§ 7-1-3 and 7-1-17 — definition of tax and presumption that an assessment is correct
• NMSA 1978, § 7-1B-8(A) — request-for-hearing and hearing deadlines
• Regulation 3.1.10.16(A), (B), and (F) NMAC — successor factors, presumptions, and transfer definitions

Cases cited:

• Sterling Title Co. of Taos v. Commissioner of Revenue, 1973-NMCA-086 — broad meaning of a business changing hands
• Ranchers-Tufco Limestone Project Joint Venture v. Revenue Division, 1983-NMCA-126 — tardiness of a public officer and absence of a statutory remedy
• Kmart Properties, Inc. v. Taxation and Revenue Department, 2006-NMCA-026 — tax deadline treated as nonjurisdictional
• Hi-Country Buick GMC, Inc. v. Taxation and Revenue Department, 2016-NMCA-027 — successor liability excluded penalty and interest

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Autoglass Technologies, LLC
• Decision PDF: D&O 17-04

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
AUTOGLASS TECHNOLOGIES, LLC, No. 17-04
TO THE ASSESSMENT ISSUED UNDER
LETTER ID NO. L0540700720

DECISION AND ORDER

A formal hearing on the above-referenced protest was held on November 3, 2016 before

Hearing Officer Dee Dee Hoxie. The Taxation and Revenue Department (Department) was

represented by Ms. Cordelia Friedman, Staff Attorney. Ms. Veronica Galewaler, Auditor, also

appeared on behalf of the Department. Ms. Tamara Jaramillo, owner of Autoglass Technologies,

LLC (Taxpayer), appeared for the hearing with her attorney, Mr. M. David Chacon, and her

accountant, Ms. Patricia Padilla. The Department’s exhibits “A”, “B”, “C”, “D”, “H”, “K”, “M”,

“N”, and “P” were admitted. A more detailed description of exhibits submitted at the hearing is

included on the Administrative Exhibit Coversheet. The Taxpayer objected to several of the

Department’s exhibits as hearsay and for lack of disclosure. The objections were overruled as

the rules of evidence do not apply and opposed exhibits may be admitted for purposes of the

record. See NMSA 1978, § 7-1B-6 (2015). See also 3.1.8.10 NMAC (2001). The Hearing

Officer took notice of all documents in the administrative file. Based on the evidence and

arguments presented, IT IS DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

Procedural history

1. On September 9, 2015, the Department assessed the Taxpayer as a successor in business.

The assessment was for $264,378.41 tax, $52,613.80 penalty, and $25,724.06 interest.

2. On October 6, 2015, the Taxpayer filed a formal protest letter.
3. On January 5, 2016, the Department filed a Request for Hearing asking that the

Taxpayer’s protest be scheduled for a formal administrative hearing.

4. The Department is required to file a request for hearing with the Administrative Hearings

Office (AHO) within 45 days of the receipt of the protest, and the AHO is required to set

a hearing within 90 days of the protest. NMSA 1978, § 7-1B-8 (A) (2015).

5. Forty-five days from October 6, 2015 was November 20, 2015. Ninety days from

October 6, 2015 was January 4, 2016.

6. The Department filed a request for hearing with the AHO on January 5, 2016.

Consequently, the AHO had no knowledge of the protest until January 5, 2016.

7. The Department’s request was filed more than 90 days after the receipt of the protest.

8. On January 7, 2016, the AHO promptly issued a notice of hearing. The hearing was held

by telephone on January 13, 2016, eight days after the AHO first received the request.

9. The Taxpayer objected to the hearing as it was set more than 90 days from the protest.

10. The objection was taken under advisement at that time. A scheduling order and notice

was issued on January 15, 2016.

11. On April 20, 2016, Mr. Chacon entered his appearance for the Taxpayer.

12. On May 26, 2016, the Taxpayer filed motions regarding the tardiness of the hearing and

regarding a lack of discovery.

13. On June 6, 2016, the Department filed its responses to the Taxpayer’s motions.

14. The order denying dismissal for the tardiness of the hearing was issued on June 27, 2016.

15. The order to produce discovery was issued on June 27, 2016.

16. The Taxpayer’s witness list was filed on July 8, 2016. The Department’s witness list was

filed on July 19, 2016.

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17. On July 20, 2016, the Department filed a request for continuance of the hearing set on

July 29, 2016.

18. The request for continuance was granted and amended notice was issued on July 21,

2016.

19. On October 28, 2016, the Taxpayer filed a motion to exclude.

20. On October 28, 2016, the Department filed its response.

21. At the hearing on November 3, 2016, the Taxpayer renewed its motions on the tardiness

of the hearing and the Department’s failure to produce discovery.

22. The Department admitted that it had not produced complete discovery to the Taxpayer in

a timely manner. The Department explained that it did not have many of the items

requested in time to make discovery. The Department sought to remedy this failure by

asking its witness about certain exhibits, but did not request that the exhibits be admitted.

23. The parties were given until December 5, 2016 to submit written proposed findings of

fact and closing arguments.

24. On November 30, 2016, Mr. Chacon filed a notice of withdrawal as counsel.

25. On December 2, 2016, the Chief Hearing Officer emailed the parties and conducted a

telephonic hearing regarding the propriety of the notice under Rule 16-116.

26. Mr. Chacon provided information that satisfied Rule 16-116. Mr. Chacon requested that

the Taxpayer be given additional time to obtain new counsel or to prepare its written

closing itself. Mr. Chacon also advised that he might continue to represent the Taxpayer

if certain issues were resolved.

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27. The request was granted, and the deadline was extended to December 16, 2016. Mr.

Chacon was also ordered to update the AHO on the status of his representation of the

Taxpayer by December 9, 2016.

28. Mr. Chacon filed an update on December 9, 2016, and advised that the Taxpayer was

well aware of its deadlines and obligations. The Department filed a response on

December 9, 2016.

29. On December 16, 2016, the Department filed its written closing arguments and findings.

Nothing was filed by the Taxpayer.

Substantive facts.

30. Ms. Jaramillo sought advice from Ms. Padilla (the accountant) in 2014 in regard to

starting her own business doing glass repairs and windshield replacements on

automobiles.

31. At that time, Ms. Jaramillo was working for another glass repair company (the former

company), which was engaged in the exact same type of glass repairs and windshield

replacements.

32. The former company was going out of business, and Ms. Jaramillo wanted to start her

own business doing glass repair.

33. The accountant assisted Ms. Jaramillo in filing for business licenses and taxes.

34. Ms. Jaramillo began doing business as the Taxpayer, which is engaged in automobile

glass repairs.

35. The Taxpayer was registered by Ms. Jaramillo with the Department for gross receipts tax

purposes in December 2014.

36. The Taxpayer filed zero gross receipts taxes for December 2014.

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37. The former company was owned by Ms. Jaramillo’s step-father, and he assisted Ms.

Jaramillo as she started her own business.

38. Ms. Jaramillo, her step-father, her mother, and several other employees worked for the

former company, and subsequently worked for the Taxpayer.

39. Ms. Jaramillo started a checking account for the Taxpayer in late 2014.

40. Glass repairs require resin and a device known as a bridge. Other items might be used,

such as razor blades, but the resin and bridge are crucial to glass repairs.

41. Bottles of resin cost approximately $225 to $336 per bottle, depending on its thickness,

and one bottle of resin will last for approximately six months.

42. Ms. Jaramillo could not recall how she obtained the initial glass repair supplies for the

Taxpayer. Ms. Jaramillo furnished the office with items that she already owned.

43. The Taxpayer was conducting business and receiving payments in December 2014,

despite reporting zero gross receipts for that month.

44. The former company was still operating and receiving payments in December 2014.

45. Ms. Jaramillo could not recall how the Taxpayer received referrals in December 2014,

and could not recall with whom the Taxpayer was doing business at that time.

46. During December 2014, the Taxpayer’s business was conducted by Ms. Jaramillo’s step-

father as Ms. Jaramillo was occupied with obtaining licenses, getting leases, and other

activities related to the start-up.

47. The Taxpayer and the former company provided services to some of the same customers

in December 2014. The Taxpayer and the former company were paying some of the

same employees in December 2014.

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48. The Taxpayer’s business office is located in the same complex as the former company’s

business offices were located, but Ms. Jaramillo obtained her own lease in a separate

office suite.

49. The Taxpayer continued to do business with customers of the former company, including

other glass companies and insurance providers, but did not have a formal agreement to

assume any outstanding contracts.

DISCUSSION

The issue to be decided is whether the Taxpayer is liable under the assessment as a

successor in business to the former company.

Burden of Proof.

Assessments by the Department are presumed to be correct. See NMSA 1978, § 7-1-17.

Tax includes, by definition, the amount of tax principal imposed and, unless the context

otherwise requires, “the amount of any interest or civil penalty relating thereto.” NMSA 1978, §

7-1-3. See also El Centro Villa Nursing Ctr. v. Taxation and Revenue Department, 1989-NMCA-

070, 108 N.M. 795. Therefore, the assessment issued to the Taxpayer is presumed to be correct,

and it is the Taxpayer’s burden to present evidence and legal argument to show that it is entitled

to an abatement.

Timeliness of the hearing.

The Taxpayer renewed its arguments that the Department’s violation of the statute

necessitates that the protest be granted. The Taxpayer argues again that the requirement that the

request be filed and the hearing be set are jurisdictional requirements. The Department renewed

its arguments that the tardiness of the request and the hearing are not jurisdictional and are not

grounds to grant the protest. The Department had also argued that the AHO has 90 days from its

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receipt of the protest from the Department to hold a hearing or that the AHO has 135 from the

Department’s receipt of the protest, which would be the 45 days to request the hearing plus 90

days.

It is not clear whether the statutory requirement is intended to be jurisdictional as the

statute does not provide any remedy or relief for a failure to comply. See NMSA 1978, § 7-1B-

8. However, the statute does not provide 90 days from the request for hearing or even from

when the hearing should have been requested, as the Department argues. See id. A hearing is

required from the date of the “receipt of a protest filed pursuant to Section 1-7-24 NMSA 1978.”

Id. Since a protest is filed with the Department under Section 1-7-24, the hearing is required to

be held within 90 days of that date. See id. See also NMSA 1978, § 7-1-24.

The Department was in violation of the statute by failing to refer the protest for hearing

within 45 days. See NMSA 1978, § 7-1B-8. In fact, the Department did not refer the protest for

hearing within 90 days. The Department did not offer any explanation for its tardiness. Due to

the Department’s actions, it was impossible for the AHO to set the Taxpayer’s protest within 90

days. See id. Consequently, the Taxpayer’s protest was not held within 90 days of the date that

its protest was filed.

Another taxpayer previously argued that the Department denied it the statutory right to a

prompt hearing on its protest. See Ranchers-Tufco Limestone Project Joint Venture v. Revenue

Div., 1983-NMCA-126, ¶ 12, 100 N.M. 632. That argument ultimately failed. See id. at ¶ 13.

The court found that the general rule is that the tardiness of public officer’s is not a defense to an

action by the state. See id. The court noted that the statute did not provide a consequence for

failure to comply with the requirements of a prompt hearing. See id. Therefore, “[t]he general

rule is applicable in these cases unless [the statute] makes it inapplicable.” Id. Another taxpayer

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argued that the failure of the hearing officer to render a decision in 30 days, as required by

statute, divested the hearing officer of jurisdiction. See also Kmart Properties, Inc. v. Taxation

and Revenue Dep’t., 2006-NMCA-026, ¶ 53, 139 N.M. 177. The court found that the tax

statutory deadline was not jurisdictional because of the general tardiness rule and the heavy

statutory presumption of correctness that favors the Department. See id. at ¶ 54. The court

found that the statutory deadline did not affect the essential power to decide complex and time-

consuming protests. See id. at ¶ 55. The same rationale would apply to the statutory deadline in

which to hold a hearing.

Equitable estoppel may be found against the state where there is “a shocking degree of

aggravated and overreaching conduct or where right and justice demand it." Wisznia v. State,

Human Servs. Dep't, 1998-NMSC-011, ¶ 17, 125 N.M. 140. Equitable estoppel against the state

is disfavored, especially in cases involving taxes. See Taxation and Revenue Dep’t v. Bien Mur

Indian Market, 1989-NMSC-015, ¶9-10, 108 N.M. 228. Equitable estoppel will not apply

against the state when it would be contrary to the requirements of statute or law. See Rainaldi v.

Pub. Employees Ret. Bd., 1993-NMSC-028, ¶ 18-19, 115 N.M. 650. See also In re Kilmer,

2004-NMCA-122, ¶ 26, 136 N.M. 440. However, even if estoppel were to apply, the Hearing

Officer could not grant it. See AA Oilfield Serv. v. New Mexico SCC, 1994-NMSC-085,118 N.M.

273 (holding that an administrative agency cannot grant the equitable remedy of estoppel because

that power is held exclusively by the judiciary). Without a clear statutory provision to the

contrary, there is no administrative remedy that can be granted. The Department’s violation of

the statutory time limits for requesting a hearing does not necessitate that the protest be granted.

Successor in Business Liability.

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A successor in business is required to pay the tax for which the acquired business was

liable. See NMSA 1978, § 7-1-61 (C) (1997). See also NMSA 1978, § 7-1-63 (1997). A

successor in business is charged with certain responsibilities in discerning what tax is owed when

the business or its assets are acquired. See NMSA 1978, § 7-1-61 (requiring the successor to set

aside an amount in trust for payment of tax) and § 7-1-62 (1997) (allowing the successor to apply

for a certificate from the Department). At the hearing, the Taxpayer argued that the assessment

of interest and penalty was inappropriate under the Hi-Country case. The Department argued

that a successor in business is also liable for the penalty and interest if the successor is a “mere

continuation” of the previous business. However, a successor in business is liable only for the

tax itself and is not liable for any penalty or interest. See Hi-Country Buick GMC, Inc. v.

Taxation and Revenue Dep’t, 2016-NMCA-027, ¶ 20 (holding that the definition of tax in the

successor in business statute does not include penalty or interest), cert. denied, No. 35,647

(NMSC, March 15, 2016). The assessment of penalty and interest is abated.

Determination of a successor.

A successor in business is “any transferee of a business or property of a business, except

to the extent it would be materially inconsistent with the rights of secured creditors”. 3.1.10.16

(F) (2) NMAC (2001). “The tangible and intangible property used in any business remains

subject to liability for payment of the tax…even though the business changes hands.” NMSA

1978, § 7-1-61. “If, after any business is transferred to a successor, any tax…remains due, the

successor shall pay the amount due”. NMSA 1978, § 7-1-63.

There are several factors to be used in determining a successor in business. See 3.1.10.16

(A) NMAC. If a single one of these factors are present, there is a presumption that there is a

successor in business. See 3.1.10.16 (B) NMAC. Purchasing tangible assets, assuming a lease,

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Letter ID No. L0540700720
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keeping one part-time employee, and assuming a note are sufficient to establish one as a

successor in business, even when the prior business was defunct. See Sterling Title Co. of Taos

v. Comm’r of Revenue, 1973-NMCA-086, ¶ 9-11, 85 N.M. 279.

The first factor in determining whether there is a successor in business is whether there

was “a sale and purchase of a major part of the materials, supplies, equipment, merchandise or

inventory…in a single or limited number of transactions”. 3.1.10.16 (A) (1) NMAC. There was

no sale and purchase between the former company and the Taxpayer. The former company had

supplies that allowed for its technicians to do glass repairs. The Taxpayer began doing glass

repairs while the former company was still operating and used the same technicians. The

Taxpayer did not establish how it came by its supplies during that time. The Department argues

that it would be reasonable to infer that Ms. Jaramillo’s step-father was providing the supplies

and the business contacts from the former company. A transfer includes “every mode, direct or

indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with the

property of a business”. 3.1.10.16 (F) (3) NMAC. Given the totality of the evidence, it is more

likely than not that the former company’s supplies were used by the Taxpayer during its start-up

phase.

The second factor is whether there was a transfer that was not in the ordinary course of

the transferor’s business. See 3.1.10.16 (A) (2) NMAC. The former company’s supplies and

goodwill transferred to the Taxpayer. See NMSA 1978, § 7-1-61 (including all tangible and

intangible property used in the business). These transfers were not in the ordinary course of the

former company’s business.

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The third factor is whether “a substantial part of both equipment and inventories” was

transferred. 3.1.10.16 (A) (3) NMAC. It is not known how much the former company’s supplies

were used, so it is not known if it was a substantial part.

The fourth factor is whether a substantial portion of the business conducted by the

transferor continued to be conducted by the transferee. See 3.1.10.16 (A) (4) NMAC. The

former company and the Taxpayer were both engaged in glass repair on automobiles, and the

work done by both is essentially identical. Several repair technicians who worked for the former

company have also worked for the Taxpayer.

The fifth factor is whether “the transferor’s goodwill follow[ed] the transfer of the

business properties”. 3.1.10.16 (A) (5) NMAC. The Taxpayer has retained many employees

who were also working for the former company. The Taxpayer rented a location in the same

building that the former company was using. The Taxpayer obtained customers who were also

customers of the former company in December 2014 and has continued to serve those customers.

Ms. Jaramillo’s step-father was the point of contact for customers of both the former company

and of the Taxpayer in December 2014 and for some time after. Consequently, it does appear

that the former company’s goodwill was transferred to the Taxpayer.

The sixth factor is whether the business obligations of the transferor were honored by the

transferee. See 3.1.10.16 (A) (6) NMAC. There was no evidence that the Taxpayer formally

assumed any obligations of the former company.

The seventh factor is whether unpaid debts of the transferor were paid by the transferee.

See 3.1.10.16 (A) (7) NMAC. The Taxpayer did not assume or pay any unpaid debts of the

former company. The final factor is whether there was an agreement precluding competition.

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See 3.1.10.16 (A) (8) NMAC. There was no such agreement between the Taxpayer and the

former company.

The statute indicates that when a business changes hands, it can involve the transfer of

tangible and intangible property. See NMSA 1978, § 7-1-61. See also Sterling Title, 1973-

NMCA-086, ¶ 23. Goodwill is an example of intangible property that could be transferred to a

successor. The term “business changes hands” is meant to be a broad, all-inclusive expression

and is used in the statute for the purpose of maintaining the personalty as security for the

payment of tax. See Sterling Title, 1973-NMCA-086, ¶ 25. A transfer of any property used in

the business, tangible or intangible, is sufficient to show that the business changed hands for

purposes of the successor statute. See NMSA 1978, § 7-1-61. See also 3.1.10.16 NMAC. See

also Sterling Title, 1973-NMCA-086, ¶ 25.

The Taxpayer failed to overcome the presumption of correctness as there was very little

evidence to show how the Taxpayer began its operations. The Taxpayer was not conspicuously

separate from the former company; in fact, the Taxpayer was using Ms. Jaramillo’s step-father as

the point of contact for customers while he was still doing business as the former company. The

Taxpayer and the former company were doing work for the same customers during December

2014, despite the Taxpayer’s lack of essential glass repair supplies and lack of means to draw its

own independent customers. Consequently, there is sufficient evidence to conclude that the

former company provided supplies to the Taxpayer, and that the goodwill of the former company

transferred to the Taxpayer. If a single factor is present, there is a presumption that there is a

successor in business. See 3.1.10.16 (B) NMAC. Therefore, the Taxpayer is presumed to be a

successor in business to the former company.

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CONCLUSIONS OF LAW

A. The Taxpayer filed a timely written protest to the Assessment issued under Letter ID

number L0540700720, and jurisdiction lies over the parties and the subject matter of this protest.

B. The Department’s failure to comply with the statute and the tardiness of the hearing

do not necessitate that the protest be granted. See NMSA 1978, § 7-1B-8. See also Ranchers-

Tufco, 1983-NMCA-126, ¶ 12. See also Kmart Properties, Inc., 2006-NMCA-026, ¶ 54.

C. There was sufficient evidence to conclude that the Taxpayer was using the former

company’s supplies when it commenced taking on customers in December 2014, and that its first

and continuing customers were thanks to the goodwill of the former company. Therefore, the

Taxpayer was a successor in business to the former company. See 3.1.10.16 NMAC. See also

NMSA 1978, § 7-1-61. See also Sterling Title, 1973-NMCA-086.

D. Even though the Taxpayer is a successor in business, it is not liable for penalty and

interest. See Hi-Country Buick, 2016-NMCA-027. The assessment for penalty and interest is

HEREBY ABATED.

For the foregoing reasons, the Taxpayer's protest is GRANTED IN PART AND DENIED

IN PART.

DATED: January 9, 2017.

Dee Dee Hoxie
DEE DEE HOXIE
Hearing Officer
Administrative Hearings Office
Post Office Box 6400
Santa Fe, NM 87502

NOTICE OF RIGHT TO APPEAL
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Pursuant to NMSA 1978, § 7-1-25, the parties have the right to appeal this decision by

filing a notice of appeal with the New Mexico Court of Appeals within 30 days of the date

shown above. See Rule 12-601 NMRA. If an appeal is not filed within 30 days, this Decision

and Order will become final. A copy of the Notice of Appeal should be mailed to John Griego,

P. O. Box 6400, Santa Fe, New Mexico 87502. Mr. Griego may be contacted at 505-827-0466.

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