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Contact one
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Andrew J. Toth
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Thomas E. Mazurek, Jr.
CPA, Senior Manager
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Tax Tips – October 2011
Have a question about state and local taxes? Struggling with a sales & use tax issue? Help is just a click away! Send an email to the Tronconi Segarra & Associates state and local tax team. They will answer your question personally, and then publish questions (anonymously) with their answers in a future newsletter issue. Click here to email your question to Tronconi Segarra & Associates.
State Amnesty Programs At-a-Glance
| State |
Amnesty Period |
Benefits |
| Colorado |
Oct. 1 to Nov. 15, 2011 |
½ Interest & Penalties waived |
| Ohio |
May 1 to June 15, 2012 |
½ Interest & Penalties waived |
Where “Inaction” Equals Denial of a Refund
NM
Where does a state’s inaction on a refund claim result in an effective “denial” of the claim? New Mexico, that’s where. The Taxpayer filed a timely claim for refund on October 8, 2009. On May 19, 2010, the Department sent the Taxpayer a letter (210-day letter) indicating that the Department could not take any action on the claim because more than 210 days (actually about 220 days) had passed since the claim was filed.
The letter also advised that the claim could be refiled provided that the statute of limitations had not expired. A state representative told the Taxpayer that the statute of limitations would not apply because the claim had originally been filed within the time and was presently being processed.
The Taxpayer refiled the claim on May 19, 2010. However, a New Mexico hearing officer has concluded that, at the time of refiling, the claim had become stale as it was after the December 31, 2009 deadline, and the Department could not act on the claim. In The Matter Of The Protest Of Healthsouth Rehabilitation, To The Denial Of Refund Under Id No. L0402881600, dated September 6, 2011.
Remedies for Inaction by the Department
When a claim for refund is neither granted nor denied within 120 days of the date the claim was filed, taxpayers have the option of refiling the claim or of pursuing a legal or administrative remedy within 90 days of the 120th day, that is within 210 days of the date of the claim. See NMSA 1978, § 7-1-26 (B). Taxpayers may only refile the claim if there is still time to do so under the statute of limitations. See NMSA 1978, § 7-1-26 (B) and (D). Taxpayers must file an administrative protest or a lawsuit in district court within 210 days of the date that the claim was filed. See NMSA 1978, § 7-1-26 (B) and (C).
So If you’ve filed a refund claim in New Mexico (or are about to), you may consider refilling the claim on the 121st day of the original filing whether you’ve heard from The Taxation and Revenue Department or not. If you wait until the Department sends an inaction letter, it may be too late to refile the claim.
Estoppel
The Taxpayer argued that it was relying on statements made by the state’s representative when the 210-day letter was sent and that the statute of limitations should not apply. To the extent that the Taxpayer's argument might encompass equitable estoppel, the hearing officer overruled it, noting that equitable estoppel is an exclusively judicial remedy. See AA Oilfield Service v. New Mexico State Corp. Comm'n, 118 N.M. 273, 881 P.2d 18 (1994) (holding that an administrative agency cannot grant the equitable remedy of estoppel because that power is held exclusively by the judiciary).
Right argument . . . wrong forum. Perhaps the Taxpayer will seek a judicial remedy after all.
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