This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The New Mexico Taxation and Revenue Department denied Team Specialty Products, Inc.'s application for a Technology Jobs Tax Credit for the 2001 tax year. The denial was based on the company's failure to apply within the one-year statutory deadline. The company, under new ownership since November 2001, experienced significant internal issues, including employee misconduct and financial mismanagement, which delayed the discovery of the tax credit opportunity. The application was ultimately filed in September 2003, well past the statutory deadline (paras 1-5).
Procedural History
- Taxation and Revenue Department, September 19, 2003: Denied Team Specialty Products, Inc.'s application for the Technology Jobs Tax Credit for being untimely (para 5).
- Taxation and Revenue Department Hearing Officer, (N/A): Denied the company's protest, holding that the one-year statutory deadline was mandatory and not discretionary (para 6).
Parties' Submissions
- Appellant (Team Specialty Products, Inc.): Argued that the statutory language in Section 7-9F-9(A) of the Technology Jobs Tax Credit Act, which uses the word "may," made the one-year deadline permissive rather than mandatory. They also contended that the Department had discretion to extend the deadline for good cause and that the denial violated substantive due process (paras 6-7).
- Appellee (New Mexico Taxation and Revenue Department): Maintained that the one-year deadline was mandatory, as the statute did not grant discretion to extend the deadline. They argued that the Department lacked authority to accept late applications and that the denial was consistent with the law (paras 6, 15).
Legal Issues
- Was the one-year application deadline in Section 7-9F-9(A) of the Technology Jobs Tax Credit Act mandatory or permissive?
- Did the New Mexico Taxation and Revenue Department have discretion to extend the application deadline for good cause?
- Did the denial of the tax credit application violate the appellant's substantive due process rights?
Disposition
- The Court of Appeals of New Mexico affirmed the decision of the hearing officer, holding that the one-year deadline was mandatory and that the Department properly denied the application as untimely (para 1).
Reasons
Per Sutin J. (Pickard and Robinson JJ. concurring):
Mandatory Nature of the Deadline: The court held that the one-year deadline in Section 7-9F-9(A) was mandatory. Although the statute used the word "may," the legislative intent, as evidenced by the statutory scheme and the absence of any provision for extensions, indicated that the deadline was not discretionary. The court emphasized that tax credits are matters of legislative grace and must be strictly construed against the taxpayer (paras 1, 9-13).
No Discretion to Extend Deadline: The court found that the Department lacked statutory authority to extend the deadline. Unlike other statutes that explicitly grant discretion to extend deadlines, the Technology Jobs Tax Credit Act contained no such provision. The court rejected the appellant's argument that the Department could exercise discretion under general principles of fairness or the Act's purpose (paras 14-16).
Substantive Due Process: The court dismissed the appellant's substantive due process claim, finding no evidence that the Department's actions were arbitrary, capricious, or an abuse of discretion. The court noted that the appellant failed to demonstrate due diligence in discovering and addressing the missed deadline and that the company was responsible for the actions of its employees (paras 18-21).
Conclusion: The court affirmed the hearing officer's decision, holding that the appellant's failure to file the application within the statutory deadline barred the Department from approving the tax credit (para 22).