May a staffing company exclude client payments for employee wages and benefits from gross receipts as disclosed-agent reimbursements?

Plain-English summary

ITSQuest, Inc. could not exclude client payments for worker wages, benefits, and related costs from gross receipts. Its staffing contracts made ITSQuest the workers' employer and an independent contractor to clients, not a disclosed payroll agent receiving money solely for another.

The assessment covered January 2011 through April 2018 and totaled $4,031,804.68: $3,018,993.93 of gross receipts tax, $599,887.94 of penalty, and $412,922.81 of interest.

ITSQuest operated primarily in New Mexico and normally placed more than 300 employees per week. Clients supervised day-to-day work, but ITSQuest hired, employed, and paid the workers. Clients paid ITSQuest amounts covering wages, benefits, and insurance plus a staffing fee.

Since about 2008, ITSQuest had calculated gross receipts tax on its “gross profit”—client receipts minus payroll and other employee expenses—rather than on total receipts. Its president believed the Department had accepted that treatment through an earlier refund and audit, but no written guidance or audit documentation was produced.

Why the agency exclusion failed

Section 7-9-3.5(A)(3)(f) excludes amounts received solely on behalf of another in a disclosed agency capacity. The decision held that ITSQuest did not satisfy the actual agency or disclosure requirements.

Private-sector contracts said ITSQuest was solely an independent contractor, not the client's agent. They made ITSQuest responsible for employee remuneration, withholding, FICA, and other employer duties. Although another clause referred vaguely to a “principal-agent relationship,” it did not authorize ITSQuest to bind the client or make a client directly liable to employees if ITSQuest failed to pay them.

The public-sector contracts were even clearer. Several expressly denied any agency relationship or authority to bind the government customer; others supplied no affirmative agency authority. ITSQuest's employee pamphlet and time-sheet language did not disclose any enforceable payroll right against a client.

This differed from a Department ruling involving a payroll administrator for film productions. That administrator performed payroll functions for another employer; ITSQuest itself hired the workers and leased their services to clients. The regulatory example for a temporary-staffing company treated both payroll reimbursements and the service fee as gross receipts when the staffing company hired, paid, and could replace the employees.

The hearing officer also noted that the record did not establish the separate-statement and bookkeeping requirements for agency reimbursements. Regulation 3.2.1.19(C) was held to be a proper implementation of the statutory exclusion.

Why penalty remained

ITSQuest argued that the Department had approved its margin-only method years earlier and that its president later discussed the policy with a former cabinet secretary. But the older written communications could not be located, and the president's recollection lacked details needed to determine what facts or advice had been exchanged.

The cabinet-secretary conversation occurred informally at a restaurant. Leaving it without “red flags” and believing the secretary understood the business model did not amount to tax advice, reasonable reliance after full disclosure, or affirmative misleading. ITSQuest had not used the formal written-ruling process available for clarification.

The hearing officer found no intent to evade tax, but negligent erroneous belief or inattention was enough for the civil penalty. Interest remained mandatory until the principal was paid.

Result: protest DENIED; the full $4,031,804.68 assessment was upheld, with further interest accruing.

What this means for you

Calling payments “reimbursements” does not establish agency

The contract and actual legal relationships control. A staffing company that is the employer and bears payroll obligations generally receives its own gross receipts when clients fund those costs.

A disclosed agency requires meaningful third-party rights

The decision looked for client liability to workers, authority for the staffing company to bind the client, and disclosure of those rights to workers. Vague principal-agent language was insufficient.

Public and private contracts should be reviewed separately

ITSQuest's public contracts often expressly prohibited agency, while its private template contained internally contradictory provisions. Neither group supported the exclusion.

Preserve written tax guidance

An undocumented recollection of a refund, audit, or informal conversation may not prove the facts disclosed, advice given, tax periods covered, or reasonableness of reliance.

Seek a formal ruling for a material recurring position

When a tax treatment affects years of large receipts, the formal written-ruling process creates a record that informal policy discussions do not.

Common questions

Q: Were only ITSQuest's service fees taxable?
A: No. All client receipts for the staffing services, including amounts covering payroll and benefits, were taxable on these facts.

Q: Why wasn't ITSQuest a disclosed agent?
A: Its contracts made it the employer and independent contractor, did not authorize it to bind clients, and did not give workers enforceable payroll rights against clients.

Q: Did an employee-leasing license create the exclusion?
A: No. The decision focused on the statutory agency relationship, disclosure, contracts, and bookkeeping—not the license alone.

Q: Did the prior refund prove Department approval?
A: No. ITSQuest did not produce the written communications or details needed to establish the Department's actual position and the scope of any reliance.

Q: Why wasn't penalty abated?
A: The evidence did not show a reasonable good-faith mistake based on informed advice, full disclosure, or affirmative misleading by the Department.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-9-3.5(A)(3)(f), 7-9-4, and 7-9-5 — disclosed-agency exclusion, gross receipts tax, and presumption of taxability
• NMSA 1978, §§ 7-1-17(C), 7-1-67, and 7-1-69(A)-(B) — assessment presumption, interest, and negligence penalty
• NMSA 1978, § 9-11-6.2 — formal written rulings from the Department secretary
• Regulations 3.2.1.19(C)(1)-(2), 3.1.11.10, and 3.1.11.11(A), (D) NMAC — agency receipts, negligence, affirmative misleading, and professional advice

Cases:

• MPC Ltd. v. New Mexico Taxation & Revenue Department, 2003-NMCA-021 — disclosed-agency requirements for staffing payroll receipts
• Carlsberg Management Co. v. State Taxation and Revenue Department, 1993-NMCA-121 — agency reimbursements and gross receipts
• Trans Union Leasing Corp. v. Hamilton, 1979-NMSC-058 — agency determined from all facts and conduct
• Tiffany Construction Co. v. Bureau of Revenue, 1976-NMCA-127 — taxpayer duty to ascertain tax consequences

Source

• Listing: New Mexico Decisions & Orders
• Decision post: ITSQuest Inc
• Decision PDF: D&O 21-15

Original ruling text

1 STATE OF NEW MEXICO
2 ADMINISTRATIVE HEARINGS OFFICE
3 TAX ADMINISTRATION ACT

4 IN THE MATTER OF THE PROTEST OF
5 ITSQUEST INC.
6 TO ASSESSMENT ISSUED UNDER
7 LETTER ID NO. L1272563888

8 v. Case Number 19.05-088A
9 D&O No. 21-15

10 NEW MEXICO TAXATION AND REVENUE DEPARTMENT

11 DECISION AND ORDER

12 On July 10, 2020, Hearing Officer Chris Romero, Esq., conducted a hearing on the merits

13 in the matter of the protest of ITSQuest, Inc. (“Taxpayer”) pursuant to the Tax Administration

14 Act and the Administrative Hearings Office Act. Mr. Wade Jackson, Esq. appeared representing

15 Taxpayer and was accompanied by Mr. Jeff Reagan. Ms. Cordelia Friedman, Esq. appeared on

16 behalf of the opposing party in the protest, the Taxation and Revenue Department

17 (“Department”) accompanied by Ms. Angelica Rodriguez, protest auditor. Mr. Reagan testified

18 for Taxpayer. Ms. Rodriguez testified for the Department.

19 The hearing occurred by videoconference pursuant to NMSA 1978, Section 7-1B-8 (H)

20 under the circumstances of the ongoing public health emergency presented by COVID-19, as

21 discussed in greater detail in Standing Order 20-02, which is made part of the record of the

22 proceeding.

23 Taxpayer Exhibits 6, 8, and 11 - 16 were proffered and admitted. 1 Department Exhibits A -

24 H, and J were proffered and admitted.

25 The primary issues presented for consideration were whether: (1) Taxpayer’s taxable gross

1
The Department initially objected to the admission of Taxpayer Exhibits 12, 13, 14, 15, and 16, but upon further
consideration, it withdrew its objections to those exhibits.

In the Matter of the Protest of ITSQuest,Inc.
Page 1 of 37
1 receipts were comprised of, or included, receipts that should have been rightly excluded as

2 receipts received solely on behalf of another in a disclosed agency capacity under NMSA

3 1978, Section 7-9-3.5 (A) (3) (f); and (2) whether Taxpayer reasonably relied on the

4 Department’s advice or other representations thereby constituting a mistake of law made in

5 good faith and on reasonable grounds justifying an abatement of penalty.

6 As explained in greater detail in the subsequent discussion, the Hearing Officer

7 determined that Taxpayer failed to establish by a preponderance of evidence that its taxable

8 gross receipts were comprised of, or included, receipts that should have been excluded as

9 receipts received solely on behalf of another in a disclosed agency capacity under NMSA

10 1978, Section 7-9-3.5 (A) (3) (f). Taxpayer also failed to establish by a preponderance of

11 evidence that it relied on the Department’s advice or other representations justifying the

12 abatement of penalty. Therefore, Taxpayer’s protest should be denied. IT IS DECIDED

13 AND ORDERED AS FOLLOWS:

14 FINDINGS OF FACT

15 Procedural History

16 1. On December 14, 2018, the Department issued a Notice of Assessment of

17 Taxes and Demand for Payment under Letter ID No. L1272563888 (“Assessment”) in the

18 total amount of $4,031,804.68. The total amount due was comprised of $3,018,993.93 in

19 gross receipts tax, $599,887.94 in penalty, and $412,922.81 in interest for the periods

20 from January 31, 2011, to April 30, 2018. [Administrative File]

21 2. On March 15, 2019, Taxpayer, by and through its counsel of record

22 submitted a protest of the Assessment to the Department’s protest office. [Administrative

23 File]

In the Matter of the Protest of ITSQuest,Inc.
Page 2 of 37
1 3. On March 27, 2019, the Department acknowledged the receipt of Taxpayer’s

2 protest under Letter ID No. L0832431280. [Administrative File]

3 4. On May 16, 2019, the Department submitted a Hearing Request. [Administrative

4 File]

5 5. On May 17, 2019, the Administrative Hearings Office entered a Notice of

6 Telephonic Scheduling Hearing that set an initial scheduling hearing to occur on June 14, 2019.

7 [Administrative File]

8 6. On June 14, 2019, the Administrative Hearings Office conducted an initial

9 scheduling hearing in which neither party objected that the hearing would satisfy the 90-day

10 hearing requirement of NMSA 1978, Section 7-1B-8 (A). [Administrative File]

11 7. On June 14, 2019, the Administrative Hearings Office entered a Notice of Second

12 telephonic Scheduling Hearing which set another scheduling hearing to occur on August 9, 2019.

13 [Administrative File]

14 8. On August 9, 2019, the Administrative Hearings Office conducted a scheduling

15 hearing and entered a Scheduling Order and Notice of Administrative Hearing that set a hearing

16 on the merits of Taxpayer’s protest for January 22, 2020. [Administrative File]

17 9. On September 24, 2019, Taxpayer filed a Certificate of Service of Taxpayer’s

18 First Set of Request for Admission, Interrogatories, and Requests for Production. [Administrative

19 File]

20 10. On November 6, 2019, Taxpayer filed a Motion to Compel and for Sanctions.

21 [Administrative File]

22 11. On November 6, 2019, the Department filed a Certificate of Service indicating

23 that it had served the Department’s Responses to Protestant’s First Set of Requests for

In the Matter of the Protest of ITSQuest,Inc.
Page 3 of 37
1 Admissions, Interrogatories and Requests for Production of Documents. [Administrative

2 File]

3 12. On November 25, 2019, Taxpayer filed a Motion to Vacate Hearing and

4 for Sanctions. [Administrative File]

5 13. On November 27, 2019, Taxpayer filed a Stipulated Motion to Vacate

6 Hearing. [Administrative File]

7 14. On November 27, 2019, Taxpayer filed Taxpayer’s Withdrawal of its

8 Motion to Compel and for Sanctions and Motion to Vacate Hearing and for Sanctions.

9 [Administrative File]

10 15. On December 10, 2019, the Administrative Hearings Office entered an

11 Order Vacating Hearing on Merits and Notice of Telephonic Scheduling Hearing that set

12 a scheduling hearing for January 3, 2020. [Administrative File]

13 16. A scheduling hearing occurred on January 3, 2020, and on January 10,

14 2020, the Administrative Hearings Office entered a Scheduling Order and Notice of

15 Administrative Hearing that set a hearing on the merits of Taxpayer’s protest for May 6,

16 2020. [Administrative File]

17 17. On February 14, 2020, the Chief Hearing Officer of the Administrative

18 Hearings Office entered a Notice of Reassignment of Presiding Hearing Officer.

19 [Administrative File]

20 18. On February 14, 2020, the Department filed an Exercise of Peremptory

21 Right to Challenge the reassignment of the presiding hearing officer. [Administrative

22 File]

23 19. On February 20, 2020, the Chief Hearing Officer of the Administrative

In the Matter of the Protest of ITSQuest,Inc.
Page 4 of 37
1 Hearings Office entered a Notice of Reinstatement of Presiding Hearing Officer which

2 reassigned the protest to back to Chris Romero, the undersigned Hearing Officer.

3 [Administrative File]

4 20. On April 13, 2020, Taxpayer filed a Motion to Vacate Hearing and for Sanctions. 2

5 [Administrative File]

6 21. On April 16, 2020, the Administrative Hearings Office entered and Order

7 Vacating Hearing on Merits and Notice of Telephonic Scheduling Hearing that set a scheduling

8 hearing to occur on May 6, 2020. [Administrative File]

9 22. On May 14, 2020, the Administrative Hearings Office entered a Notice of

10 Administrative Hearing which set a hearing on the merits of Taxpayer’s protest for June 23,

11 2020. [Administrative File]

12 23. On June 2, 2020, Taxpayer filed Taxpayer’s Prehearing Statement and the

13 Department filed Department’s Prehearing Statement. [Administrative File]

14 24. On June 23, 2020, the parties appeared for a hearing on the merits of Taxpayer’s

15 protest, but as a preliminary matter, the Department asserted that Taxpayer had not made a

16 timely disclosure of its exhibits. Taxpayer responded that its ability to disclose exhibits was

17 impaired by the unique circumstances presented by the COVID-19 pandemic. The Hearing

18 Officer determined that the best method of minimizing potential prejudice to the parties arising

19 from circumstances presented by the pandemic was to continue the hearing. The parties did not

20 object to a continuance and agreed to proceed on July 10, 2020, at 9 a.m. [Record of Hearing

21 (6/23/2020)]

22 25. On June 23, 2020, the Administrative Hearings Office entered a Continuance and

2
Although the title of the motion referred to a request for sanctions, the reference to sanctions appeared to be a
scrivener error since the body of the motion made no reference to sanctions.

In the Matter of the Protest of ITSQuest,Inc.
Page 5 of 37
1 Notice of Administrative Hearing continuing the hearing on the merits of Taxpayer’s

2 protest to July 10, 2020. [Administrative File]

3 Merits of Taxpayer’s Protest

4 26. Mr. Jeff Reagan is the president of Taxpayer, ITSQuest, Inc. He has

5 served Taxpayer in that capacity since 1994. [Direct Examination of Mr. Reagan]

6 27. Taxpayer is a staffing agency and under normal circumstances, has more

7 than 300 employees placed per week with its clients. As of the date of the hearing,

8 however, that figure had significantly declined as a potential result of the pandemic.

9 [Direct Examination of Mr. Reagan]

10 28. Taxpayer operates primarily in New Mexico. [Direct Examination of Mr.

11 Reagan]

12 29. Mr. Reagan’s functions for Taxpayer vary and include developing

13 agreements with clients, training staff with regard for marketing strategies, and

14 overseeing financial aspects of the Taxpayer’s operations. [Direct Examination of Mr.

15 Reagan]

16 30. Mr. Reagan is a graduate of Texas Tech University with a degree in

17 finance with an emphasis in accounting. He has experience in public accountancy and

18 practiced as a certified public accountant from 1988 until approximately 1997 when he

19 sold his CPA practice to devote his full efforts to Taxpayer’s business. [Direct

20 Examination of Mr. Reagan]

21 31. Taxpayer provides employees for a variety of clients, both public and

22 private entities. [Direct Examination of Mr. Reagan]

23 Relationship with Employees

In the Matter of the Protest of ITSQuest,Inc.
Page 6 of 37
1 32. Clients utilizing Taxpayer’s staffing services supervise and control the daily

2 activities of Taxpayer’s employees who are placed in their service, but employees are

3 exclusively employed and compensated by Taxpayer. [Direct Examination of Mr. Reagan]

4 33. Taxpayer employs its employees “at will” and provides express notification to

5 them that, “once hired, an employee serves at the pleasure of [Taxpayer], and dismissal from

6 employment may occur at any time, with or without cause, at the discretion of either [Taxpayer]

7 or his/her designee (employee).” [Taxpayer Ex. 8 (At-Will Employment)]

8 34. Taxpayer employees are also informed that “it is important that you understand

9 you are a direct employee of … [Taxpayer][.]” [Taxpayer Ex. 8 (Temp-To-Hire Program)]

10 35. Both the employee information pamphlet (Taxpayer Ex. 8) and Taxpayer’s time

11 sheets (Taxpayer Ex. 11) state identically, as follows:

12 Employees are aware of our relationship with our clients as a
13 principal-agent relationship. All taxes and insurance are properly
14 remitted by [Taxpayer] to the correct agencies, but a failure to do
15 so would still insure all employees have the correct amounts
16 credited to their accounts based on our client’s principal-agent
17 relationship.

18 [Direct Examination of Mr. Reagan]

19 General Business Operations and GRT Reporting History

20 36. Taxpayer possesses an employee leasing license and has done so since at least

21 2008. [Direct Examination of Mr. Reagan]

22 37. Public and private sector clients utilizing Taxpayer’s staffing services compensate

23 Taxpayer for salary, wages, and benefits in addition to Taxpayer’s service fees. [Direct

24 Examination of Mr. Reagan]

25 38. Mr. Reagan had understood for several years that Taxpayer’s gross receipts

26 liability should be computed based on its profits (income less expenses) instead of its gross

In the Matter of the Protest of ITSQuest,Inc.
Page 7 of 37
1 receipts (income only). [Direct Examination of Mr. Reagan]

2 39. Mr. Reagan’s understanding stemmed from his recollection of previous

3 guidance from the Department in or prior to 2008, when Taxpayer was granted a refund

4 after Taxpayer asserted that it overpaid gross receipts tax as a result of computing its tax

5 liability as a percentage of its total gross receipts instead of its profits, meaning total

6 gross receipts less expenses. [Direct Examination of Mr. Reagan]

7 40. The Department granted the refund, assertedly agreeing that Taxpayer

8 overpaid gross receipts tax as a result of computing its tax liability as a percentage of its

9 total gross receipts instead of its profits, meaning total gross receipts less expenses.

10 [Direct Examination of Mr. Reagan]

11 41. The Department subsequently audited taxpayer to determine whether the

12 methods used to compute the amount of the refund were accurate. [Direct Examination of

13 Mr. Reagan]

14 42. Because the Department assertedly found there were no improprieties with

15 Taxpayer’s methods of computation, or records relied upon for computing its tax due,

16 Mr. Reagan believed Taxpayer’s method of computing its taxable gross receipts was

17 approved and would continue to be accepted by the Department. [Direct Examination of

18 Mr. Reagan]

19 43. Nevertheless, the Department provided Taxpayer with a notice that the

20 Department intended to reclaim a portion of the previously granted refund because

21 Taxpayer did not possess a leasing license. Taxpayer responded in part by obtaining

22 appropriate licensure, and as previously indicated, has maintained licensure since. [Direct

23 Examination of Mr. Reagan]

In the Matter of the Protest of ITSQuest,Inc.
Page 8 of 37
1 44. Since approximately 2008 until commencement of the audit underlying the

2 current protest, the Taxpayer computed its gross receipts tax as a percentage of the difference

3 between its total income and its expenses, otherwise referred to a its gross profit. [Direct

4 Examination of Mr. Reagan]

5 45. Because the Department raised no concerns with Taxpayer’s computation method,

6 Taxpayer continued to utilize the method until approximately 2018. [Direct Examination of Mr.

7 Reagan]

8 46. Concurrent with, or subsequent to the initiation of the audit underlying the protest,

9 an auditor for the Department informed Mr. Reagan that Taxpayer needed to remit gross receipts

10 tax based on a percentage of its total gross receipts, not based on its profit alone. [Direct

11 Examination of Mr. Reagan]

12 47. In response to communications that Taxpayer needed to remit gross receipts tax

13 based on a percentage of its total gross receipts instead of its profit, Taxpayer changed its

14 business model and billing practices. [Direct Examination of Mr. Reagan]

15 48. Taxpayer’s adjustments to its billing practices contributed to an increase in cost to

16 Taxpayer’s clients, which may have contributed to a loss of business and corresponding business

17 income. [Direct Examination of Mr. Reagan]

18 Private Sector Contracts

19 49. Since at least 2014, Taxpayer’s contracts with its private sector clients have

20 included terms and conditions which Taxpayer asserts established, or demonstrated, the

21 existence of a disclosed agency relationship. [Direct Examination of Mr. Reagan; Taxpayer Ex.

22 6]

23 50. Section 25 of Taxpayer Ex. 6, which exemplifies Taxpayer’s standard private

In the Matter of the Protest of ITSQuest,Inc.
Page 9 of 37
1 sector agreement, states as follows:

2 SCOPE OF AGREEMENT: If any provision of the scope of any
3 provision of this Agreement is unenforceable or too broad in any
4 respect whatsoever to permit enforcement to its full extent, such
5 provisions shall then be enforced to the maximum extent permitted
6 by law, and the parties consent and agree that such provisions shall
7 be curtailed only to the extent necessary to conform to law. In the
8 event of any conflict or inconsistency between any provision of
9 this Agreement and any Schedule, purchase order, order
10 acknowledgment or similar document issued by either party in
11 connection herewith to this Agreement, the provision(s) of this
12 Agreement shall control. Both parties to this agreement are aware
13 of the principal-agent relationship. Although [Taxpayer] remits all
14 taxes and insurance, the employees will still have the correct
15 amounts credited to their accounts if [Taxpayer] fails to remit
16 based on the principal-agent relationship.

17 [Emphasis Added]

18 [Taxpayer Ex. 6 (Section 25); See also Department Ex. G (Section
19 25); Department Ex. H (Section 25)]

20 51. The language contained in Taxpayer’s standard private sector template

21 compliments disclosures contained in Taxpayer’s employee publications, such as

22 Taxpayer’s previously-mentioned employee information pamphlet and time sheet. [Direct

23 Examination of Mr. Reagan; Taxpayer Ex. 8; Taxpayer Ex. 11]

24 52. Department Exhibits G, H, and Taxpayer Ex. 6, Page 4, Para. 15, on each

25 exhibit (original pagination), states:

26 INDEPENDENT CONTRACTOR STATUS: [Taxpayer] agrees
27 that its status is solely that of an independent contractor and not an
28 employee or agent of Customer. In furtherance of such
29 understanding, and notwithstanding any other provision of this
30 agreement to the contrary, the parties agree that [Taxpayer] shall
31 be responsible for payment of all remuneration payable to said
32 Assigned Employees and all taxes imposed on an employer with
33 respect to such employees, including those imposed under federal
34 and state withholding laws and [Taxpayer] shall also be
35 responsible for payment of taxes under the Federal Insurance
36 Contributions Act (“FICA”) with respect to said employees.
37 Except as required by Section 414 (n) of the Internal Revenue

In the Matter of the Protest of ITSQuest,Inc.
Page 10 of 37
1 Code, all employees shall be considered and shall be treated as
2 common law employees of [Taxpayer] and not as employees of
3 Customer for purposes of Section 401 (a) of the Internal Revenue
4 Code.

5 53. Despite the statement that “[Taxpayer] agrees that its status is solely that of an

6 independent contractor and not an employee or agent of Customer[,]” Mr. Reagan believed that

7 Taxpayer was agent of Taxpayer’s clients. [Department Ex. G (Page 4, Para. 15); Department

8 Ex. H (Page 4, Para. 15); Taxpayer Ex. 6 (Page 4, Para. 15); Cross Examination of Mr. Reagan]

9 54. Taxpayer’s time sheets (Taxpayer 11) also state in reference to indemnification:

10 [Taxpayer] agrees to indemnify and defend customer from any and
11 all losses, liability, expenses (including legal) and claims from
12 damage of any nature, whatsoever, which customer may incur,
13 suffer, become liable for, or which may be asserted or claimed
14 against contractor, on the basis that [Taxpayer] failed to comply
15 with any federal, state, or local laws in its capacity as employer of
16 the employees assigned to customer.

17 [Taxpayer Ex. 11]

18 Treatment of Public Sector Contracts

19 55. Public sector clients, such as state and local government and other public bodies,

20 generally require use of their own contract template. Samples of those contracts were contained

21 in Taxpayer Exhibits 12 – 16. [Direct Examination of Mr. Reagan; Taxpayer Ex. 12; Taxpayer

22 Ex. 13; Taxpayer Ex. 14; Taxpayer Ex. 15; Taxpayer Ex. 16]

23 56. Taxpayer’s Statewide Pricing Agreement with the State of New Mexico provides

24 as follows in Article VII:

25 It is specifically agreed between the parties executing this
26 agreement that it is not intended by any of the provisions of any
27 part of the agreement to create in the public or any member thereof
28 a third party beneficiary or to authorize anyone not a party to the
29 agreement to maintain a suit(s) for wrongful death(s), bodily and/
30 or personal injury(s) to person(s), damage(s) to property(ies)
31 and/or any other claim(s) whatsoever pursuant to the provisions of
32 this agreement.

In the Matter of the Protest of ITSQuest,Inc.
Page 11 of 37
1 [Direct Examination of Mr. Reagan; Taxpayer Ex. 12.71 (Article
2 VII)]

3 57. Mr. Reagan acknowledges that Article VII provides no right to bind the

4 state in contract and that it is not an agent of the state under the agreement, but that

5 Taxpayer also had no part in drafting the agreement. [Direct Examination of Mr. Reagan;

6 Taxpayer Ex. 12.71 (Article VII)]

7 58. Taxpayer’s contract with the City of Las Cruces provides as follows in

8 Para. 15:

9 Nothing contained in this Agreement shall create any partnership,
10 association, joint venture, fiduciary or agency relationship between
11 CONTRACTOR and CITY. Except as otherwise specifically set
12 forth herein, neither CONTRACTOR nor CITY, shall be
13 authorized or empowered to make any representation or
14 commitment or to perform any act which shall be binding on the
15 other unless expressly authorized or empowered in writing.

16 [Direct Examination of Mr. Reagan; Taxpayer Ex. 13.4 (Para. 15)]

17 59. Mr. Reagan acknowledges that Para. 15 in Taxpayer’s contract with the

18 City of Las Cruces provides no right to bind the city in contract and that it is not an agent

19 of the city under the contract, but that Taxpayer also had no part in drafting the contract.

20 [Direct Examination of Mr. Reagan; Taxpayer Ex. 13.4 (Para. 15)]

21 60. Taxpayer’s contract with the New Mexico Department of Corrections

22 provides as follows in Section 6:

23 The Contractor and its agents and employees are independent
24 contractors performing professional services for the Agency and
25 are not employees of the State of New Mexico. The Contractor and
26 its agents and employees shall not accrue leave, retirement,
27 insurance, bonding, use of state vehicles, or any other benefits
28 afforded to employees of the State of New Mexico as a result of
29 this Agreement. The Contractor acknowledges that all sums
30 received hereunder are reportable by the Contractor for tax
31 purposes, including without limitation, self-employment and
32 business income tax. The Contractor agrees not to purport to bind

In the Matter of the Protest of ITSQuest,Inc.
Page 12 of 37
1 the State of New Mexico unless the Contractor has express written
2 authority to do so, and then only within the strict limits of that
3 authority.

4 [Direct Examination of Mr. Reagan; Taxpayer Ex. 14.4 (Section
5 6)]

6 61. Mr. Reagan acknowledges that Taxpayer’s agreement with the New Mexico

7 Department of Corrections provides no right to bind the state in contract and that it is not an

8 agent of the state under the contract, but that Taxpayer also had no part in drafting the contract.

9 [Direct Examination of Mr. Reagan; Taxpayer Ex. 14.4 (Section 6)]

10 62. Taxpayer’s contract with the Albuquerque Public Schools is silent in regard to the

11 issue of agency or the authority to bind it in contract. Consequently, Mr. Reagan acknowledges

12 that Taxpayer acquired no explicit right to bind the district in contract and that it is not an agent

13 of the district under the contract, but that Taxpayer also had no part in drafting the contract.

14 [Direct Examination of Mr. Reagan; Taxpayer Ex. 15]

15 63. Taxpayer’s contract with the Village of Ruidoso provides as follows in Section 7:

16 It is specifically agreed between the parties executing this
17 Agreement that it is not intended by any of the provisions or any
18 part of the Agreement to create in the public or any member
19 thereof a third party beneficiary or to authorize anyone not a party
20 to the Agreement to maintain any suit for wrongful death, bodily or
21 personal injury, damage to property or any other matter whatsoever
22 pursuant to the provisions of this Agreement.

23 [Direct Examination of Mr. Reagan; Taxpayer Ex. 16.3 (Section
24 7)]

25 64. Taxpayer’s contract with the Village of Ruidoso also provides as follows in

26 Section 8:

27 The Contractor is an independent contractor by performing those
28 services for the Village and is not an employee of any federal, state
29 or local government body and is not an agent of the Village.

30 [Direct Examination of Mr. Reagan; Taxpayer Ex. 16.3 – 16.4

In the Matter of the Protest of ITSQuest,Inc.
Page 13 of 37
1 (Section 8)]

2 65. Mr. Reagan acknowledges that Taxpayer’s contract with the Village of

3 Ruidoso provides no right to bind the village in contract and that it is not an agent of the

4 village under the contract, but that Taxpayer also had no part in drafting the contract.

5 [Direct Examination of Mr. Reagan; Taxpayer Ex. 16]

6 66. With regard for receipts derived under public sector clients, in the years

7 under audit, the Taxpayer remitted taxes based on profits, meaning income less expenses,

8 rather than total gross receipts. [Direct Examination of Mr. Reagan]

9 Protest Review of Audit and Assessment

10 67. Ms. Angelica Rodriguez is a tax protest auditor for the Department. She

11 reviewed the circumstances underlying the protest and various records. [Direct

12 Examination of Ms. Rodriguez]

13 68. Records reviewed by Ms. Rodriguez include the audit workpapers and the

14 records identified in Department Ex. A. [Direct Examination of Ms. Rodriguez]

15 69. Ms. Rodriguez did not identify any errors in the underlying audit and

16 concurred with the initial conclusions that certain deductions should not have been

17 allowed. [Direct Examination of Ms. Rodriguez]

18 70. Ms. Rodriguez reviewed the list of customers identified in Column J

19 (Department Exhibit A beginning at C7.1 (original pagination)) and the auditor’s

20 explanation for denying deductions, exemptions, or exclusions in Column L. [Department

21 Ex. A; Direct Examination of Ms. Rodriguez]

22 71. Ms. Rodriquez contacted the auditor to inquire whether she had reviewed

23 the contracts that served as the basis for her determination of taxability of certain

24 receipts. The auditor’s response was that she had only reviewed contracts that were

In the Matter of the Protest of ITSQuest,Inc.
Page 14 of 37
1 actually provided. [Department Ex. A; Direct Examination of Ms. Rodriguez]

2 72. Any contracts that were not specifically identified as being provided to the auditor

3 were not reviewed. All contracts that were provided for review were identified in the audit

4 narrative. [Department Ex. A; Cross Examination of Ms. Rodriguez]

5 73. Taxpayer’s private sector contract template (Department Exhibits G, H, and

6 Taxpayer Ex. 6) were particularly relevant to Ms. Rodriguez. She perceived Page 4, Para. 15 of

7 the template as Taxpayer’s recognition that it was an independent contractor to its clients instead

8 of a disclosed agent. [Department Ex. G; Direct Examination of Ms. Rodriguez]

9 74. Ms. Rodriguez would not conclude under any circumstances that Taxpayer

10 maintained an agency relationship with its clients without authority to bind the client. An agency

11 relationship would need to be supported by an express authority to bind. [Cross Examination of

12 Ms. Rodriguez]

13 75. The audit exit interview did not contain any indication to Ms. Rodriguez that

14 Taxpayer contested any of the audit’s conclusions. [Direct Examination of Ms. Rodriguez]

15 Penalty

16 76. In approximately 2014, Mr. Reagan personally inquired from the Department

17 cabinet secretary, Ms. Demesia Padilla, during a meet-and-greet at a local dining establishment,

18 about the Department’s position on this issue, at which time the cabinet secretary indicated that

19 the Department’s position on the issue had not changed. Accordingly, Mr. Reagan believed there

20 should be no concerns with the methods it continued to employ for computing its gross receipts

21 tax liability. [Direct Examination of Mr. Reagan; Department Ex. E]

22 77. Ms. Rodriguez was unable to verify the accuracy of any communications between

23 Demesia Padilla and Mr. Reagan by reviewing various Department records where notations of

In the Matter of the Protest of ITSQuest,Inc.
Page 15 of 37
1 communications would have been documented. [Department Ex. E; Department Ex. F;

2 Direct Examination of Ms. Rodriguez]

3 78. Although Mr. Reagan asserted that its methods of computation, reporting

4 and payment of gross receipts taxes during the relevant periods of time were approved by

5 the Department, the evidentiary record does not contain any written communication or

6 other instructions that may be relied upon to corroborate Mr. Reagan’s recollections. In

7 fact, Taxpayer, through Mr. Reagan, admitted that “[Taxpayer], at one time did have

8 written correspondence from the Department but is unable to locate it after these many

9 years.” [Department Ex. E]

10 DISCUSSION

11 The primary issue in dispute is whether the Department erroneously assessed gross receipts

12 tax on revenue allegedly received solely on behalf of another in a disclosed agency capacity under

13 Section 7-9-3.5 (A) (3) (f). In evaluating Taxpayer’s position, the Hearing Officer is asked to review

14 the propriety or scope of Regulation 3.2.1.19 (C) (1) NMAC and determine whether it unlawfully

15 abridges Section 7-9-3.5 (A) (3) (f). The secondary issue is whether penalty should be abated based

16 on Taxpayer’s asserted reliance on prior advice of the Department as well as subsequent comments

17 by its former cabinet secretary.

18 The Department asserts that its assessment is correct because there was no evidence to

19 establish the existence of an agency relationship consistent with the requirements of Section 7-9-3.5

20 (A) (3) (f), as implemented by Regulation 3.2.1.19 (C) (1) NMAC, and that there is no basis for the

21 abatement of penalty based on comments made by the former cabinet secretary or any other

22 Department personnel.

23 Prior to addressing Taxpayer’s claims, it is necessary to discuss the burden Taxpayer must

In the Matter of the Protest of ITSQuest,Inc.
Page 16 of 37
1 overcome in order to prevail.

2 Presumption of Correctness

3 Pursuant to NMSA 1978, Section 7-1-17 (C) (2007), the Assessment of tax issued in this

4 case is presumed correct and unless otherwise specified, for the purposes of the Tax

5 Administration Act, “tax” includes interest and civil penalty. See NMSA 1978, Section 7-1-3 (X)

6 (2013). Therefore, under Regulation 3.1.6.13 NMAC, the presumption of correctness under

7 Section 7-1-17 (C) also extends to the Department’s assessment of penalty and interest. See

8 Chevron U.S.A., Inc. v. State ex rel. Dep’t of Taxation & Revenue, 2006-NMCA-050, ¶16, 139

9 N.M. 498, 134 P.3d 785 (agency regulations interpreting a statute are presumed proper and are to be

10 given substantial weight).

11 As a result, the presumption of correctness in favor of the Department requires that

12 Taxpayer carry the burden of presenting countervailing evidence or legal argument to show that

13 it is entitled to abatement of the Assessment. See N.M. Taxation & Revenue Dep’t v. Casias

14 Trucking, 2014-NMCA-099, ¶8, 336 P.3d 436. “Unsubstantiated statements that [an] assessment

15 is incorrect cannot overcome the presumption of correctness.” See MPC Ltd. v. N.M. Taxation &

16 Revenue Dep’t, 2003-NMCA-021, ¶13, 133 N.M. 217, 62 P.3d 308; See also Regulation 3.1.6.12

17 NMAC. If a taxpayer presents sufficient evidence to rebut the presumption, then the burden

18 shifts to the Department to re-establish the correctness of the assessment. See MPC, 2003-

19 NMCA-021, ¶13.

20 In circumstances where a taxpayer’s claim for relief relies on the application of an

21 exemption or deduction, “the statute must be construed strictly in favor of the taxing authority,

22 the right to the exemption or deduction must be clearly and unambiguously expressed in the

23 statute, and the right must be clearly established by the taxpayer.” See Wing Pawn Shop v.

In the Matter of the Protest of ITSQuest,Inc.
Page 17 of 37
1 Taxation and Revenue Department, 1991-NMCA-024, ¶16, 111 N.M. 735, 809 P.2d 649

2 (internal citation omitted); See also TPL, Inc. v. N.M. Taxation & Revenue Dep’t, 2003-NMSC-

3 007, ¶9, 133 N.M. 447, 64 P.3d 474.

4 Computing Taxable Gross Receipts

5 As a practical matter, one of the initial steps in any audit is to compute or verify the amount

6 of gross receipts. A subsequent step is to subtract from the taxpayer’s total gross receipts those

7 amounts which are deductible or exempt or even excludable from the definition of gross receipts,

8 assuming excludable receipts were erroneously included in the computation. The difference

9 between total gross receipts and any applicable deductions or exemptions, or less any amounts that

10 should be excluded, is the amount of taxable gross receipts.

11 For the privilege of engaging in business, New Mexico imposes a gross receipts tax on the

12 receipts of any person engaged in business. See NMSA 1978, Section 7-9-4 (2002). Under

13 NMSA 1978, Section 7-9-3.5 (A) (1) (2007), “gross receipts” is defined to mean:

14 the total amount of money or the value of other consideration
15 received from selling property in New Mexico, from leasing or
16 licensing property employed in New Mexico, from granting a right to
17 use a franchise employed in New Mexico, from selling services
18 performed outside New Mexico, the product of which is initially
19 used in New Mexico, or from performing services in New Mexico.

20 Accordingly, under the Gross Receipts and Compensating Tax Act, all gross receipts of a

21 person engaged in business are presumed taxable. See NMSA 1978, Section 7-9-5 (2002).

22 But, as previously stated, a taxpayer’s actual obligation may be affected by any number

23 of applicable deductions or exemptions, or by presenting evidence that its receipts are excludable

24 from taxation under NMSA 1978, Section 7-9-3.5 (e.g. amounts received solely on behalf of

25 another in a disclosed agency capacity pursuant to Section 7-9-3.5 (A) (3) (f)).

26 Statutory Exclusions from Gross Receipts pursuant to Section 7-9-3.5 (A) (3) (f)

In the Matter of the Protest of ITSQuest,Inc.
Page 18 of 37
1 NMSA 1978, Section 7-9-3.5(A) (3) (f) explicitly states that the term “gross receipts”

2 excludes “amounts received solely on behalf of another in a disclosed agency capacity.” Regulation

3 3.2.1.19 (C) (1) NMAC goes on to provide that, “[a]n agency relationship exists if a person has the

4 power to bind a principal in a contract with a third party so that the third party can enforce the

5 contractual obligation against the principal.”

6 New Mexico courts have addressed on several occasions, in the context of gross receipts

7 tax, whether an agency relationship exists and what effect that relationship has on the taxability of

8 receipts derived from that relationship. As early as 1971, the Court of Appeals in Westland

9 Corporation v. Commission of Revenue, 1971-NMCA-083, ¶38, 83 N.M. 29, observed that there

10 was no justification under the facts of that case to impose gross receipts tax on the receipts of a

11 person who served as a “friendly agent” for the limited purpose of “receiving and paying out sums

12 for debts or obligations owing” from another company.

13 More than two decades later, the Court of Appeals in Carlsberg Mgmt. Co. v. State, 1993-

14 NMCA-121, 116 N.M. 247 once again considered the issue of agency in the area of New Mexico’s

15 gross receipts tax. Carlsberg concerned a property management group that operated an apartment

16 complex on behalf of the property owner. The rent at the apartment complex was subsidized by a

17 federal agency. The taxpayer claimed that the federal agency mandated the form of the agreement in

18 place between that taxpayer and the owner. The agreement in Carlsberg referred to that taxpayer as

19 “agent.” Under an agency theory, the Carlsberg taxpayer argued that money it received from the

20 owner’s reimbursing of the payment of employee wages were not subject to gross receipts tax.

21 The Court of Appeals in Carlsberg explained “that a principal’s control over the agent is the

22 key characteristic of an agency relationship.” See Carlsberg, 1993-NMCA-121, ¶12. It went on to

23 explain that whether an agency relationship existed was a factual determination. See Carlsberg,

In the Matter of the Protest of ITSQuest,Inc.
Page 19 of 37
1 1993-NMCA-121, ¶16. It began its evaluation by reviewing the terms of the relevant agreement. In

2 doing so, it emphasized the long-standing rule that when the contract is unambiguous, the language

3 of the contract determines the intent of the parties without further interpretation. It went on in its

4 analysis to conclude that the contract central to the issues in dispute created an unambiguous agent-

5 principal relationship and rejected the Department’s requirement that an agent be disclosed, and

6 adopted the rule that “if a party only receives money… of [] another’s employment-related

7 obligations, then an agency relationship exists sufficient to avoid taxation of those funds as gross

8 receipts.” See Carlsberg, 1993-NMCA-121, ¶15. The Court concluded that the level of control the

9 owner of the apartment complex wielded over that taxpayer regarding that taxpayer’s employees

10 left that taxpayer with no control over the payment of the employees, and thus that taxpayer never

11 possessed any interest in the funds in question used to pay the employees. See Carlsberg, 1993-

12 NMCA-121, ¶19. The Carlsberg decision also noted that an indemnification clause requiring the

13 owner to pay that taxpayer for employment related expenses supported its holding. See id.

14 The Court of Appeals again had an opportunity to revisit the issue in 1995 when it

15 considered Brim Healthcare, Inc. vs. State, 1995-NMCA-055, 119 N.M. 818. The question

16 presented by Brim was whether an agency relationship excluded taxpayer’s reimbursements from

17 the gross receipts tax. In ultimately disagreeing with the taxpayer’s position, the Court of Appeals

18 identified several areas of distinction from the facts underlying Carlsberg. The most significant

19 factor distinguishing Brim from Carlsberg was the absence of an indemnification clause in the

20 agreement at issue in Brim. See id. But another distinction cited in Brim was that the contracts at

21 issue expressly noted that the taxpayer was “not an agent… but rather [was] an independent

22 contractor.” Ultimately, the Court of Appeals agreed that the receipts central to the dispute were not

23 received as “reimbursement of expenses as an agent.” See Brim, 1995-NMCA-055, ¶18.

In the Matter of the Protest of ITSQuest,Inc.
Page 20 of 37
1 Although Carlsberg expressly rejected the Department’s previous policy and regulation

2 allowing for exemption of gross receipts only when there is a disclosed agency relationship, a

3 subsequent legislative enactment has limited the Carlsberg holding. See MPC, 2003-NMCA-021,

4 ¶14. At the time the Court of Appeals issued its decision in Carlsberg, the gross receipts tax

5 definition contained no provision excluding from gross receipts tax receipts received solely on

6 behalf of another in a disclosed agency capacity. Since that case, the Legislature has expressly

7 enacted an exclusion for receipts received in a disclosed agency capacity at Section 7-9-3.5 (A) (3)

8 (f).

9 In 2003, the Court of Appeals in MPC revisited the consequences of an agency relationship

10 in the context of gross receipts tax, albeit for the first time under the subsequently enacted

11 “disclosed agency” exception to the definition of “gross receipts.” In so doing, the Court warned

12 that Carlsberg and Brim were both decided before the enactment of the explicit exclusion for

13 receipts derived in the capacity of a disclosed agent pursuant to Section 7-9-3.5(A) (3) (f), and for

14 that reason, those cases had limited instructive value. See MPC, 2003-NMCA-021, ¶34.

15 Similar to Taxpayer’s field of business, MPC concerned a taxpayer that provided temporary

16 staffing services to clients in New Mexico. MPC mostly relied on unwritten agreements with its

17 clients, but did have some written agreements in place that established the terms and conditions of

18 its services. For example, and similar to the facts underlying the present protest, MPC’s clients

19 supervised the activities of the assigned employees, but the client did not pay the employees.

20 Instead, clients paid the taxpayer, which in turn paid the employee’s wages, benefits, and

21 withholdings. The taxpayer in MPC then went on to claim the totality of its receipts should be

22 excluded from gross receipts because it “received the amounts purely as a conduit between its

23 clients and its employees.” See MPC, 2003-NMCA-021, ¶8.

In the Matter of the Protest of ITSQuest,Inc.
Page 21 of 37
1 The taxpayer’s argument in MPC required that the Court consider both a regulation

2 addressing joint employers and the statutory and regulatory elements for establishing a disclosed

3 agency relationship. Similar to the matter at hand, the Court was called upon to consider the

4 application of Regulation 3.2.1.19 (C) (1) NMAC interpreting and implementing Section 7-9-3.5

5 (A) (3) (f). In doing so, MPC observed Regulation 3.2.1.19 (C) (1) NMAC to mean that:

6 (1) the agent [taxpayer] has the authority to bind the principal (the
7 client)… to an obligation (to the employee) created by the agent
8 [taxpayer], and (2) the beneficiary of that obligation (the employee)
9 is informed by contract that he or she has a right to proceed against
10 the principal (the client) to enforce the obligation.

11 The Court in MPC went on to further explain:

12 Section 7-9-3(F)(2)(f) requires a disclosure to the employee of an
13 agency relationship. This breaks down into the requirements that
14 there be a relationship by which the principal is liable (and knows he
15 is liable) to the employee for payroll if the agent fails to pay, and that
16 the agent disclose this relationship and obligation to the employee.

17 The Court further noted that Regulation 3.2.1.19 (C) demanded additional bookkeeping

18 requirements that must be met in order to exclude receipts received as part of a disclosed agency

19 capacity from gross receipts. See MPC, 2003-NMCA-021, ¶36.

20 Turning to the facts now under consideration, the Hearing Officer notes several similarities

21 between the facts presented by Taxpayer and MPC. For example, the sampling of private sector

22 contracts presented by Taxpayer clearly specified that the relationship between Taxpayer and its

23 clients is that of independent contractor and explicitly disclaimed any agency relationship. See

24 Department Exhibit G (Page 4, Para. 15); Department Ex. H (Page 4, Para. 15); Taxpayer Ex. 6

25 (Page 4, Para. 15).

26 Taxpayer’s public sector contracts are even clearer in regard to Taxpayer’s status, or lack

27 thereof, as an agent. In fact, Mr. Reagan readily admitted that none of the public sector contracts

28 established an agency relationship between Taxpayer and its public sector clients.

In the Matter of the Protest of ITSQuest,Inc.
Page 22 of 37
1 Similar to the facts in MPC, Taxpayer’s clients also supervise the day-to-day activities of

2 Taxpayer’s employees who are not directly compensated by the client. As in MPC, clients pay

3 Taxpayer a sum of money comprised of the employee’s salary or wages, benefits, plus a fee for the

4 services Taxpayer provided. There was no evidence to suggest that clients pre-pay payroll or

5 contribute to any sort of payroll fund from which Taxpayer draws money for employee

6 compensation.

7 Although Taxpayer points out conflicting language in Taxpayer’s client agreements, the

8 Hearing Officer is not persuaded that such language is sufficient to satisfy the requirements of the

9 relevant statute, rule, and case law, recognizing of course that, “the majority rule is that the manner

10 in which the parties designate a relationship is not controlling, and if an act done by one person on

11 behalf of another is in its essential nature one of agency, the one is the agent of the other,

12 notwithstanding he is not so called.” See Chevron Oil Co. v. Sutton, 1973-NMSC-111, ¶ 4, 85 N.M.

13 679, 681, 515 P.2d 1283, 1285.

14 The provision upon which Taxpayer relies states, “[b]oth parties to this agreement are aware

15 of the principal-agent relationship. Although [Taxpayer] remits all taxes and insurance, the

16 employees will still have the correct amounts credited to their accounts if [Taxpayer] fails to remit

17 based on the principal-agent relationship.”

18 The precise meaning of this language is difficult to ascertain. It does not explicitly convey

19 any right to employees to enforce any obligations against a client. In fact, the language makes no

20 reference to Taxpayer’s clients at all. It is vague and ambiguous. But assuming that Mr. Reagan’s

21 understanding of the provision is accurate, it does not actually establish or evidence any genuine

22 principal-agent relationship, and even if it did, the terms and conditions of that relationship are

23 entirely unknown. Conversely stated, to be “aware of the principal-agent relationship” is not

In the Matter of the Protest of ITSQuest,Inc.
Page 23 of 37
1 equivalent to explicitly establishing such relationship, especially when other provisions in the same

2 agreement effectively disclaim the existence of an agency relationship. Section 15 of its private-

3 sector contracts admitted as Taxpayer Ex. 6 and Department Exhibits G and H state in relevant part

4 that, “[Taxpayer] agrees that its status is solely that of an independent contractor and not an

5 employee or agent of Customer.” It goes on to state that “[Taxpayer] shall be responsible for

6 payment of all remuneration payable to said Assigned Employees and all taxes imposed on an

7 employer with respect to such employees, including those imposed under federal and state

8 withholding laws and [Taxpayer] shall also be responsible for payment of taxes under the

9 Federal Insurance Contributions Act (“FICA”) with respect to said employees.”

10 Therefore, whatever grant of authority or relationship might be inferred from the

11 acknowledgment appearing in Section 25, the language contained in Section 15 negates it in

12 clear and unambiguous terms. To the extent there could be reliance on another agreement, not

13 made part of the contract or proffered for consideration in this matter that explicitly establishes a

14 principal-agent relationship, Section 26 in the same exhibit proclaims that “[t]his agreement

15 contains the entire agreement between the parties with respect to the matters covered herein[.]”

16 Moreover, there is no indication that any Taxpayer employee enjoys the right to proceed

17 directly against any client to enforce any contractual obligations. Section 15 clearly obligates

18 Taxpayer for compensating its employees and there is no explicit right to proceed against a client

19 if Taxpayer should fail to do so. The fleeting recognition of a principal-agent relationship in

20 Section 25, when read in light of the remaining sections of the agreement, does not confer any

21 rights on Taxpayer’s employees to pursue contractual claims against anyone except Taxpayer.

22 Although the Hearing Officer found Mr. Reagan to be an affable and credible witness, the

23 Hearing Officer was unpersuaded based on his testimony and the cited agreements that Taxpayer

In the Matter of the Protest of ITSQuest,Inc.
Page 24 of 37
1 maintained a genuine principal-agent relationship with any of its clients in the manner prescribed

2 by the Department and upheld in MPC. “The question of agency must be determined from all of

3 the facts and circumstances in each case, along with the conduct and communications of the

4 parties.” See Trans Union Leasing Corp. v. Hamilton, 1979-NMSC-058, ¶ 10, 93 N.M. 310, 312,

5 600 P.2d 256, 258. In this case, the only evidence in support of a disclosed agency relationship is

6 straightforwardly refuted by contradictory evidence on the record. In fact, the opposing evidence

7 so heavily weighs against the existence of a disclosed agency relationship that the Hearing

8 Officer perceives the language contained in Section 25 as an afterthought suggesting the desire to

9 have one’s cake and eat it, too; to enjoy the fruits of the exclusion provided by the disclosed

10 agency relationship without incurring its potential liabilities or assuming its responsibilities.

11 This, however, would thwart the intentions of the Legislature, which intended the exclusion to

12 apply to a genuine agency-relationship, not one created with the mere purpose of sidestepping

13 taxation. See e.g. MPC Ltd., 2003-NMCA-021, ¶ 25, 133 N.M. 217, 223, 62 P.3d 308, 314

14 (Legislature required agency relationship and disclosure, not merely one or the other).

15 With concern for disclosure, the evidence established that Taxpayer distributes a

16 pamphlet to employees which states, “[e]mployees are aware of our relationship with our clients

17 as a principal-agent relationship. All taxes and insurance are properly remitted by [Taxpayer] to

18 the correct agencies, but a failure to do so would still insure all employees have the correct

19 amounts credited to their accounts based on our client’s principal-agent relationship.” See

20 Taxpayer Ex. 8. The same language appears in fine print on Taxpayer’s time sheets. See

21 Taxpayer 11.

22 However, making employees aware in the manner provided by Taxpayer is not enough.

23 The Hearing Officer’s observation in this protest is similar to the observation made in MPC in

In the Matter of the Protest of ITSQuest,Inc.
Page 25 of 37
1 which the Court explained, Taxpayer “nowhere specifically sets out whether employees were

2 told they could enforce a payroll obligation against the client.” Furthermore, Taxpayer does not

3 show, “any understanding, oral, or written, with any of its clients that the client would be or

4 could be obligated to the employee for payroll.” See MPC, 2003-NMCA-021, ¶ 39. Even if

5 Taxpayer has a good faith belief that those were the intentions underlying the asserted

6 disclosures provided in Taxpayer Exs. 8 and 11, the language utilized is inadequate for providing

7 any meaningful disclosure of any actual rights employees could assert against Taxpayer’s clients,

8 and there is no evidence that any client could be directly indebted to any of Taxpayer’s

9 employees for payroll obligations.

10 Taxpayer argued that the guidance provided by Ruling 401-09-3 (Effective June 17,

11 2009) should apply to the facts of this protest. At first blush, the facts considered in that ruling

12 appeared somewhat analogous to the facts underlying Taxpayer’s protest. The taxpayer in that

13 ruling contracts with film and television producers to perform administrative functions relating to

14 the employment of the production’s cast and crew. The taxpayer handled various tasks, including

15 payroll, withholdings, and other administrative tasks. In exchange for services, the production

16 company separately paid a fee for services and a reimbursement for employee payroll, taxes,

17 benefits, and other payroll expenditures.

18 After considering the application of the relevant statute, regulation, and cases, including

19 Carlsberg, Brim, and MPC, the Department concluded that the taxpayer’s receipts from

20 producers for payroll, benefits, taxes, workers compensation insurance, and similar employee

21 related reimbursements were not gross receipts for purposes of the gross receipts tax act.

22 However, the hearing officer does not find Ruling 401-09-3 to be binding or persuasive under the

23 facts of this protest. The taxpayer subject of the ruling contracted with producers to perform

In the Matter of the Protest of ITSQuest,Inc.
Page 26 of 37
1 administrative functions relating to the employment of production cast and crew. The taxpayer

2 subject of the ruling was not a staffing agency nor employer of the employees at issue.

3 In the present matter, Taxpayer is not retained by the employer to merely assist with

4 performance of administrative functions. Taxpayer’s objective is to employ staff which it can

5 lease to clients in exchange for compensation. The circumstances between Ruling 401-09-3 and

6 the present issue are clearly distinguishable on their facts.

7 The distinction is further exemplified by comparing and contrasting the examples

8 contained in Regulation 3.2.1.19 (C) (7) and (8) NMAC. The example in Regulation 3.2.1.19 (C)

9 (7) bears a resemblance to the facts in Ruling 401-09-3. But in the subsequent example, the

10 Department considers a scenario having more facts in common with the facts of Taxpayer’s

11 protest. That example provides:

12 A enters into an agreement with its client B to provide temporary
13 workers to B. The agreement provides that A retains the right to
14 select and hire employees, to control when the employees are paid,
15 and the right to replace employees. A issues the payroll checks to
16 employees with A as payor. The employees are unaware of any
17 principal-agent relationship between A and B. All receipts A
18 receives from B for payroll and A’s commission or fee for its
19 services to B are subject to gross receipts tax.

20 See Regulation 3.2.1.19 (C) (8) NMAC.

21 In conclusion and for the reasons discussed, Taxpayer did not satisfy the requirements of

22 Section 7-9-3.5(A) (3) (f) and Regulation 3.2.1.19 (C) (1) NMAC, as supported by MPC. Taxpayer

23 failed to prove by a preponderance of evidence that it derived receipts “solely on behalf of another

24 in a disclosed agency capacity.” There was insufficient evidence to establish a genuine principal-

25 agent relationship or the sorts of meaningful disclosures required by Regulation 3.2.1.19 (C) (1) and

26 subsequently endorsed by MPC.

27 Incidentally, although the Hearing Officer need not address the issue having found that

In the Matter of the Protest of ITSQuest,Inc.
Page 27 of 37
1 Taxpayer failed to satisfy the requirements of Regulation 3.2.1.19 (C) (1), the Hearing Officer

2 observed that Taxpayer did not address the bookkeeping requirements contained in Regulation

3 3.2.1.19 (C) (2) NMAC. That regulation provides, “[r]eceipts from the reimbursement of

4 expenses incurred as agent on behalf of a principal while acting in a disclosed agency capacity

5 are not included in the agent's gross receipts if the expenses are separately stated on the agent's

6 billing to the client and are identified in the agent's books and records as reimbursements of

7 expenses incurred on behalf of the principal party.” (Emphasis Added)

8 Accordingly, even had the Hearing Officer found that Taxpayer had satisfied the

9 requirements of Regulation 3.2.1.19 (C) (1), there is nothing apparent from the evidentiary

10 record on which the Hearing Officer could evaluate whether the Taxpayer also satisfied

11 Regulation 3.2.1.19 (C) (2) NMAC. See MPC, 2003-NMCA-021, ¶36.

12 Propriety of Regulation 3.2.1.19 NMAC

13 As seen in the preceding section, the Hearing Officer’s evaluation of the issues presented

14 concentrates in part on Regulation 3.2.1.19 (C) (1) NMAC. Taxpayer asserts, however, that the rule

15 as applied in this case abridges Section 7-9-3.5 (A) (3) (f) and should be disregarded as invalid. It

16 has long been recognized that, “[i]t is, of course, a fundamental principle of administrative law that

17 the authority of the agency is not limited to those powers expressly granted by statute, but includes,

18 also, all powers that may fairly be implied therefrom.” See Wimberly v. N.M. State Police Bd., 1972-

19 NMSC-034, ¶6, 83 N.M. 757, 758, 497 P.2d 968, 969.

20 The Department is empowered under NMSA 1978, Section 9-11-6.2 (A) to issue regulations

21 to administer the tax laws of this state. Its authority, however, is not without limitation. The

22 Department may only promulgate regulations that interpret and exemplify the statutes to which they

23 relate. See NMSA 1978, Section 9-11-6.2 (B) (1).

In the Matter of the Protest of ITSQuest,Inc.
Page 28 of 37
1 In deciding whether a regulation interprets or exemplifies a statute, a regulation may not

2 abridge or otherwise limit the scope of the related statutory enactment. See Rainbo Baking Co. of El

3 Paso, Tex. v. Comm’r of Revenue, 1972-NMCA-139, ¶¶ 10-12, 84 N.M. 303, 305-306. In Rainbo

4 Baking Co., the court held that the Commissioner of Revenue may not promulgate a regulation that

5 would nullify a deduction authorized by the Legislature. In Rainbo, the Commissioner promulgated

6 a regulation that required a nontaxable transaction certificate to be in the possession of the buyer at

7 the time of an audit, which contradicted the statute that only required the buyer to have in its

8 possession a nontaxable transaction certificate. Consequently, the Court ruled that a regulation may

9 not add a requirement that the Legislature has not also authorized or imposed which limits or

10 abridges a statute.

11 Similarly, in Gonzales v. Educ. Retirement Bd., 1990-NMSC-024, 109 N.M. 592, 788 P.2d

12 348, the Court held that the Educational Retirement Board could not enact a regulation that was

13 “unreasonable or irrelevant.” In Gonzales, the Board, by regulation, required a member who was

14 requesting an award of disability benefits to hold no property interest in a bus contract. The Court

15 said that there was nothing within the statutory grant of authority to award disability benefits that

16 authorized the Board to refuse to accept an application for disability if the applicant continued to

17 have a property interest in a bus contract. The Court held that the Board did not have the “statutory

18 power to create unreasonable or irrelevant requirements within the application process before it

19 considers the application.” See Gonzales, 109 N.M. at 594, 788 P.2d at 350. Thus, the Board’s

20 regulation was held to create an unreasonable or irrelevant requirement.

21 Taxpayer’s perception that Regulation 3.2.1.19 (C) (1) NMAC limits or abridges the

22 availability of the exclusion under Section 7-9-3.5 (A) (3) (f) is misplaced. Application of

23 Regulation 3.2.1.19 (C) (1) NMAC has come before the New Mexico Court of Appeals on several

In the Matter of the Protest of ITSQuest,Inc.
Page 29 of 37
1 occasions. The first reported case was MPC more than 20 years ago when the guidance to which

2 this decision adheres was first articulated. A handful of unreported, and albeit unprecedential

3 decisions of the court have also followed. In each instance, the parties and the court had an

4 opportunity to reconsider the application of MPC or the regulation on which it relied. At no time has

5 any court disturbed the rule articulated by MPC or second-guessed the propriety of the regulation on

6 which it relied in reaching its decision. See Active Sols., Incorporated v. New Mexico Taxation &

7 Revenue Dep't, A-1-CA-37632, 2020 WL 4459109 (N.M. Ct. App. Aug. 3, 2020); Del Corazon

8 Hospice, LLC v. New Mexico Taxation & Revenue Dep't, A-1-CA-37347, 2020 WL 4730709 (N.M.

9 Ct. App. Aug. 10, 2020); Matter of Protest of ATC Healthcare Services, Inc., A-1-CA-36081, 2019

10 WL 2092230 (N.M. Ct. App. May 7, 2019); Bogle Mgmt. Co., Inc. v. New Mexico Taxation &

11 Revenue Dep't, A-1-CA-35641, 2017 WL 6997308 (N.M. Ct. App. Dec. 5, 2017).

12 That is not to say that an appellate court could not take a different view should it find it

13 appropriate to do so. But the guidance it has provided in both precedential and non-precedential

14 decisions has been consistent and reliable and the Hearing Officer does not perceive any facts in the

15 present case which should cause a change in direction.

16 Moreover, the Hearing Officer observed that Regulation 3.2.1.19 NMAC was most recently

17 amended in 2010 but the specific section at issue in this protest has remained consistent since it was

18 discussed in MPC in 2002. The Hearing Officer finds significance in this observation because, “[i]n

19 construing statutes and regulations, courts will ‘give persuasive weight to long-standing

20 administrative constructions of statutes by the agency charged with administering them.’” See Pub.

21 Serv. Co. of N.M. v. N.M. Taxation & Revenue Dept., 2007-NMCA-050, ¶ 41, 141 N.M. 520, 532,

22 157 P.3d 85, 97 (citing High Ridge Hinkle Joint Venture v. City of Albuquerque, 1998-NMSC-050,

23 ¶ 5, 126 N.M. 413, 414, 970 P.2d 599, 600).

In the Matter of the Protest of ITSQuest,Inc.
Page 30 of 37
1 Regulation 3.2.1.19 (C) is a proper implementation of the law and the Hearing Officer

2 perceives no conflict with the statute which authorizes it.

3 Penalty

4 When a taxpayer fails to pay taxes due to the State because of negligence or disregard of

5 rules and regulations, but without intent to evade or defeat a tax, NMSA 1978 Section 7-1-69

6 (2007) requires that:

7 there shall be added to the amount assessed a penalty in an amount
8 equal to the greater of: (1) two percent per month or any fraction of
9 a month from the date the tax was due multiplied by the amount of
10 tax due but not paid, not to exceed twenty percent of the tax due
11 but not paid.

12 [Emphasis Added]

13 The statute’s use of the word “shall” makes the imposition of penalty mandatory in all

14 instances where a taxpayer’s actions or inactions meet the legal definition of “negligence.” See

15 Marbob Energy Corp. v. N.M. Oil Conservation Comm'n, 2009-NMSC-013, ¶22, 146 N.M. 24, 32

16 (use of the word “shall” in a statute indicates that a provision is mandatory absent clear indication to

17 the contrary).

18 Regulation 3.1.11.10 NMAC defines negligence in three separate ways: (A) “failure to

19 exercise that degree of ordinary business care and prudence which reasonable taxpayers would

20 exercise under like circumstances;” (B) “inaction by taxpayer where action is required”; or (C)

21 “inadvertence, indifference, thoughtlessness, carelessness, erroneous belief or inattention.”

22 In instances where a taxpayer might fall under the definition of civil negligence subject to

23 penalty, Section 7-1-69 (B) provides an exception in that “[n]o penalty shall be assessed against

24 a taxpayer if the failure to pay an amount of tax when due results from a mistake of law made in

25 good faith and on reasonable grounds.”

In the Matter of the Protest of ITSQuest,Inc.
Page 31 of 37
1 In this case, Taxpayer is negligent for failure to exercise that degree of ordinary business

2 care and prudence which reasonable taxpayers would exercise under like circumstances or

3 inadvertence, erroneous belief, or inattention.

4 In this protest, Taxpayer claims that no penalty should be assessed because the

5 Department previously expressed agreement with Taxpayer’s methods of computing its gross

6 receipts tax liability, and a subsequent interaction with Ms. Demesia Padilla, the Department’s

7 cabinet secretary at the time. The interaction occurred at a local restaurant in close proximity to

8 the New Mexico State Capitol during the legislative session. Mr. Reagan said that the cabinet

9 secretary “came to visit friends who were working with him” on his efforts to procure state

10 business.

11 During their interactions, Mr. Reagan “mentioned to her [he] had an employee leasing

12 license and used it for years as a mechanism to deduct direct labor costs from the billing amounts

13 and taxed the remaining portion for remittance to the state. She seemed knowledgeable about the

14 laws pertaining to employee leasing and talked about consistency and utilization of direct costs

15 for deductions.” Mr. Reagan went on to explain that “[he] left the conversation without any red

16 flags and believed she understood [his] business model.” See Department Ex. E.

17 Former cabinet secretary Padilla, by signed and sworn affidavit responded that “[she] did

18 not recall giving any tax advice to Jeff Reagan at any time.” See Department Ex. F.

19 Although Mr. Reagan presents as very credible, the Hearing Officer is not persuaded that

20 the conversation, as described in the testimony or in Mr. Reagan’s written summary, justifies

21 abatement of penalty based on mistake of law made in good faith and on reasonable grounds.

22 Viewing Mr. Reagan’s recollection of his conversation in the light most favorable to Taxpayer,

23 simply leaving his conversation “without any red flags” assuming that Ms. Padilla “understood

In the Matter of the Protest of ITSQuest,Inc.
Page 32 of 37
1 [his] business model” is not equivalent to a mistake of law made in good faith and on reasonable

2 grounds. Even if Ms. Padilla and Mr. Reagan shared similar views regarding tax policy, their

3 agreement is not nor should it be equated with tax advice upon which Taxpayer should

4 reasonably rely. Moreover, having similar views on tax policy cannot be construed as permission

5 to deviate from the requirements of law if those requirements do not align with the favored

6 policy.

7 The other grounds for abatement of civil negligence penalty are found under Regulation

8 3.1.11.11 NMAC. That regulation establishes eight indicators of non-negligence where penalty

9 may be abated. Based on the evidence presented, the first factor under Regulation 3.1.11.11

10 NMAC that is potentially applicable in this proceeding is:

11 D. the taxpayer proves that the failure to pay tax or to file a return
12 was caused by reasonable reliance on the advice of competent tax
13 counsel or accountant as to the taxpayer's liability after full
14 disclosure of all relevant facts; failure to make a timely filing of a
15 tax return, however, is not excused by the taxpayer's reliance on an
16 agent;

17 Referring back to Mr. Reagan’s interactions with Ms. Padilla, there was no evidence to

18 suggest, much less establish by a preponderance, that Mr. Reagan provided a full disclosure of

19 all relevant facts. In contrast, Mr. Reagan’s description of his conversation indicates that their

20 interactions may have been quite superficial and policy based, rather than fact specific.

21 Accordingly, the communications that Mr. Reagan may have had with Ms. Padilla fail to satisfy

22 the requirements of Regulation 3.1.11.11 (D) NMAC.

23 The other potentially applicable indicator of non-negligence at Regulation 3.1.11.11 (A)

24 provides for abatement of penalty if “the taxpayer proves the taxpayer was affirmatively misled

25 by a department employee[.]” For the same reasons, this indicator of non-negligence fails to

26 afford relief from penalty because once again in the light most favorable to Taxpayer, leaving a

In the Matter of the Protest of ITSQuest,Inc.
Page 33 of 37
1 conversation “without any red flags” assuming that the cabinet secretary “understood [his]

2 business model” is not equivalent to being affirmatively misled. In contrast, NMSA 1978,

3 Section 9-11-6.2 and the rules implementing the law provide a formal mechanism for seeking a

4 ruling from the secretary of the Department if Taxpayer desired “clarification of the

5 consequences of a specified set of circumstances.” See NMSA 1978, Section 9-11-6.2 (B) (2);

6 see also Regulation 3.1.2.8 NMAC.

7 To the extent Taxpayer relies on other communications, such as those that may have

8 occurred in or about 2008, the Hearing Officer finds that Mr. Reagan’s testimony alone is not

9 sufficient to establish entitlement to an abatement in the absence of the written communications

10 he recalled having (as referenced in Department Ex. G), but was unable to produce as evidence.

11 Although generally credible in all regards, Mr. Reagan’s testimony on this issue lacked the sort

12 of specificity necessary to evaluate whether Taxpayer’s reliance was reasonable, whether the

13 Department’s positions had changed, or whether the Taxpayer was indeed misled.

14 It is Taxpayer’s duty under Tiffany Construction Co., 1976-NMCA-127, ¶5, to ascertain

15 the tax consequences of its actions. The Department did not allege that Taxpayer’s conduct in this

16 regard was with the intent to evade or defeat a tax. In other words, Taxpayer did not act with bad

17 intentions. Yet, El Centro Villa Nursing Ctr. v. Taxation & Revenue Dept. of State of N.M., 1989-

18 NMCA-070, 108 N.M. 795, 795, 779 P.2d 982, 982, established that the civil negligence penalty is

19 appropriate under the circumstances of this protest and Regulation 3.1.11.11 NMAC does not

20 provide grounds for abatement of the penalty.

21 For the reasons stated, Taxpayer did not overcome the presumption of correctness that

22 attached to the Assessment, and the protest should be DENIED.

23 CONCLUSIONS OF LAW

In the Matter of the Protest of ITSQuest,Inc.
Page 34 of 37
1 A. Taxpayer filed a timely, written protest to the Assessment. Jurisdiction lies over the

2 parties and the subject matter of this protest.

3 B. A hearing was timely set and held within 90 days of Taxpayer’s protest as required

4 by NMSA 1978, Section 7-1B-8.

5 C. All of Taxpayer’s receipts were presumed subject to gross receipts tax under

6 NMSA 1978, Section 7-9-5 (2002).

7 D. Taxpayer carries the burden to present countervailing evidence or legal argument

8 to show that it is entitled to an abatement of an assessment. See Casias Trucking, 2014-NMCA-

9 099, ¶8.

10 E. If a taxpayer presents sufficient evidence to rebut the presumption, then the

11 burden shifts to the Department to re-establish the correctness of the assessment. See MPC Ltd.,

12 2003-NMCA-021, ¶13.

13 F. The contracts between Taxpayer and its private sector and public sector clients failed

14 to establish the existence of a disclosed agency relationship in which Taxpayer had actual authority

15 to bind its customers with third parties. Taxpayer was therefore not a disclosed agent under

16 NMSA 1978, Section 7-9-3.5 (A) (3) (f) and Regulation 3.2.1.19 (C) (1) NMAC. See MPC, ¶36.

17 G. Since Taxpayer was not a disclosed agent under NMSA 1978, Section 7-9-3.5 (A)

18 (3) (f) and Regulation 3.2.1.19 (C) (1) NMAC, Taxpayer’s receipts from providing employment

19 staffing services were taxable gross receipts.

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

21 under the assessment, which shall continue to accrue until the tax principal is satisfied.

22 I. Under NMSA 1978, Section 7-1-69 (2007), Taxpayers are liable for civil

23 negligence penalty and there is no basis under the facts of the protest to permit an abatement.

In the Matter of the Protest of ITSQuest,Inc.
Page 35 of 37
1 J. Taxpayer did not rebut the statutory presumption of correctness that attached to the

2 Assessment under NMSA 1978, Section 7-1-17 and the burden did not therefore shift to the

3 Department to re-establish the correctness of its assessment.

4 For the foregoing reasons, Taxpayer’s protest should be, and hereby is, DENIED.

5 DATED: June 17, 2021

6
7 Chris Romero
8 Hearing Officer
9 Administrative Hearings Office
10 P.O. Box 6400
11 Santa Fe, NM 87502

12 NOTICE OF RIGHT TO APPEAL

13 Pursuant to NMSA 1978, Section 7-1-25 (2015), the parties have the right to appeal this

14 decision by filing a notice of appeal with the New Mexico Court of Appeals within 30 days of the

15 date shown above. If an appeal is not timely filed with the Court of Appeals within 30 days, this

16 Decision and Order will become final. Rule of Appellate Procedure 12-601 NMRA articulates

17 the requirements of perfecting an appeal of an administrative decision with the Court of Appeals.

18 Either party filing an appeal shall file a courtesy copy of the appeal with the Administrative

19 Hearings Office contemporaneous with the Court of Appeals filing so that the Administrative

20 Hearings Office may begin preparing the record proper. The parties will each be provided with a

21 copy of the record proper at the time of the filing of the record proper with the Court of Appeals,

22 which occurs within 14 days of the Administrative Hearings Office receipt of the docketing

23 statement from the appealing party. See Rule 12-209 NMRA.

In the Matter of the Protest of ITSQuest,Inc.
Page 36 of 37
1 CERTIFICATE OF SERVICE

2 On June 17, 2021, a copy of the foregoing Decision and Order was submitted to the parties

3 listed below in the following manner:

4 Email Email
5 INTENTIONALLY BLANK

6
7 John D. Griego
8 Legal Assistant
9 Administrative Hearings Office
10 Post Office Box 6400
11 Santa Fe, NM 87502
12 PH: (505)827-0466
13 FX: (505)827-9732
14 [email protected]

In the Matter of the Protest of ITSQuest,Inc.
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