Davis v. Commissioner of Revenue
| Decision Date | 06 August 1971 |
| Docket Number | No. 653,653 |
| Parties | Lee R. DAVIS, d/b/a Sutherland Furniture & Appliance, Appellant, v. COMMISSIONER OF REVENUE of the State of New Mexico, Appellee. |
| Court | Court of Appeals of New Mexico |
The Bureau made a deficiency assessment of gross receipts tax on Davis for State and Municipal tax. The assessment was based on Davis' failure to include 'time price differentials' on credit sales which were made on installment contracts and sold to finance companies.
Although the retail installment contracts were made in Davis' name, the finance companies furnished the contract forms, approved credit of the purchasers before the contracts were executed, and then purchased the contracts by paying Davis the 'Total Cash Sales Price' less the amount recived by Davis as a down payment. Davis did not receive the 'time price differential.' That sum, if paid, was received by the finance company purchasing the contracts.
Davis protested the deficiency assessment on the grounds that he never received the money on which the deficiency assessment was based and that such a tax would be discriminatory and unconstitutional '* * * because his gross receipts would be taxed at more than the applicable tax rates and more than the receipts of other taxpayers.'
We reverse.
Two assessments were made. One assessment was made under § 72--16--7, N.M.S.A.1953 (Repl.Vol.1961) (repealed Laws 1966, Ch. 47, § 22, July 1, 1967) and the other for the period after July 1, 1967, being under § 72--16A--3, subd. F, N.M.S.A.1953 (Repl.Vol., Supp.1969).
Those statutes read:
72--16--7 '* * * Provided, that in the event the seller or leaser (sic), who has so elected, transfers his interest in any such contract to some third person he shall pay the tax upon the full sale price of the commodity involved, unless a record is kept of payments thereafter made on such contracts in such manner that the bureau of revenue can at all times ascertain from the records of the seller the amount paid thereon by the purchaser. * * *'
72--16A--3 '* * * F. 'gross receipts' means the total amount of money or the value of other consideration, received from selling property in New Mexico, from leasing property employed in New Mexico or from performing services in New Mexico, and includes any type of time-price differential and receipts from sales of tangible personal property handled on consignment but excludes cash discounts allowed and taken.
'In an exchange in which the money or other consideration received does not represent the value of the property or service exchanged, 'gross receipts' means the reasonable value of the property or service exchanged.
'When the sale of property or service is made under any type of charge, conditional or time sales contract or the leasing of property is made under a leasing contract, the seller or lessor may elect to treat all receipts under such contracts as gross receipts as and when the payments are actually received. If the seller or lessor transfers his interest in any such contract to a third person, he shall pay the gross receipts tax upon the full sale or leasing contract amount.
"Gross receipts,' for the purposes of the business of buying, selling or promoting the purchase, sale or leasing, as factor, agent or broker, on a commission or fee basis, of any property, service, stock, bond or security, includes only the total commissions or fees derived from the business;'
Assessment Prior to July 1, 1967.
The Bureau contends that although 'full sale price' is not defined under the repealed law, 'gross proceeds of sales' was defined by § 72--16--2, subd. E, N.M.S.A.1953 (Repl.Vol.1961) (repealed Laws 1966, Ch. 47, § 22, July 1, 1967) which stated, in part:
"Gross proceeds of sales' means the sum or value proceeding or accruing from the sale of tangible personal property, * * * including any services that are a part of such sales * * *, whether received in money or otherwise, including all receipts, cash, credits and property of any kind or nature, and also the amount for which credit is allowed by the seller to the purchaser, * * *'
It is the Bureau's contention that under this section, which must be read with § 72--16--7, supra, that the clear legislative intent is to include 'time price differential' as either '* * * services that are a part...
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