Par Five Servs., LLC v. N.M. Taxation & Revenue Dep't

• Decision Date: 08 March 2021
• Docket Number: No. A-1-CA-37231, No. A-1-CA-37303,A-1-CA-37231
• Citation: 489 P.3d 983
• Parties: PAR FIVE SERVICES, LLC, Protestant-Appellee/Cross-Appellant, v. NEW MEXICO TAXATION & REVENUE DEPARTMENT, Respondent-Appellant/Cross-Appellee. Mosaic Potash Carlsbad Inc., Protestant-Appellant, v. New Mexico Taxation & Revenue Department, Respondent-Appellee.
• Court: Court of Appeals of New Mexico

489 P.3d 983

PAR FIVE SERVICES, LLC, Protestant-Appellee/Cross-Appellant,

v.NEW MEXICO TAXATION & REVENUE DEPARTMENT, Respondent-Appellant/Cross-Appellee.

Mosaic Potash Carlsbad Inc., Protestant-Appellant,

v.New Mexico Taxation & Revenue Department, Respondent-Appellee.

No. A-1-CA-37231

No. A-1-CA-37303

Court of Appeals of New Mexico.

Filing Date: March 8, 2021

Sanchez, Mowrer & Desiderio, P.C., Robert J. Desiderio, Isaac S. Emmanuel, Albuquerque, NM, Betzer, Roybal & Eisenberg, P.C., Benjamin C. Roybal, Albuquerque, NM, for Appellee Par Five Energy Services, LLC and Appellant Mosaic Potash Carlsbad, Inc.

Hector H. Balderas, Attorney General, Timothy J. Williams, Staff Attorney, Legal Services Bureau, Tonya Noonan Herring, Special Assistant Attorney General, Marek Grabowski, Special Assistant Attorney General, Santa Fe, NM, for New Mexico Taxation & Revenue Department

B. ZAMORA, Judge.

{1} This opinion addresses two separate appeals.¹ Mosaic Potash Carlsbad, Inc. and Par Five Energy Services, LLC (collectively, Taxpayers), appeal from the administrative hearing officers’ decisions upholding partial denials by the New Mexico Department of Taxation and Revenue (Department) of applications for the New Mexico High-Wage Jobs Tax Credit (HWJTC), NMSA 1978, § 7-9G-1 (2013, amended 2019).² The Department also appeals the hearing officer's allowance of the HWJTC for one of Par Five's employees. The central issue in both appeals is the definition and effect of the statutory term "new job" for purposes of the HWJTC. We hold that a "new job" is brought into being for purposes of the HWJTC when a new job position that did not previously exist is created. We affirm the findings of the hearing officer who presided over the Mosaic case, and affirm in part and reverse in part, the findings of the hearing officer who presided over the Par Five case.

BACKGROUND

I. The HWJTC and Departmental Methodologies

{2} The HWJTC provides an eligible employer with a tax credit for each "new high-wage economic-based job" for three consecutive qualifying periods the employer creates and fills with an eligible employee. Section 7-9G-1(D). Relevant to this appeal, the Department employs two different methodologies known as the "replacement analysis" and the "career path promotion analysis" to determine whether Taxpayers have created a "new job" for purposes of the HWJTC. When a new employee is hired, the Department utilizes the replacement analysis to determine whether a "new job" has been created. In contrast, when an existing employee is promoted to a different position, the Department utilizes the career path promotion analysis to determine whether a "new job" has been created.

II. The Tax Protests

{3} In December 2015, Par Five filed an application for credit under the HWJTC for qualifying periods occurring between January 2011 and July 2015. As relevant to this appeal, the Department, employing the replacement analysis, denied the HWJTC with respect to six employees over seven qualifying periods, on the basis that such employees "were hired to fill preexisting jobs, not new jobs." The hearing officer upheld the Department's denial.³ In addition, Par Five promoted an existing employee to a higher paying position and claimed that the promotion created a "new job." Employing the career path promotion analysis, the Department denied the HWJTC after determining that Par Five had not created a new position, but instead had simply promoted the employee into a higher paying position. The hearing officer reversed the Department's denial, finding that there was no dispute that the promotion was actually a new job and concluding that the criteria the Department used under the career path promotion analysis to determine whether the position was new were not supported by the HWJTC statute. Par Five appeals the hearing officer's decision and order upholding the Department's denials of credit pursuant to the replacement analysis, and the Department appeals the hearing officer's decision and order reversing the Department's denial, pursuant to the career path promotion analysis.

{4} Similarly, in December 2015 Mosaic filed an application for credit for the period of January 2010 through February 2015. As relevant to this appeal, the Department, applying the replacement analysis, denied the HWJTC for sixty employees over ninety-two qualifying periods on the basis that the hiring of these employees did not create "new jobs" because the hired employees merely filled vacancies left by employees who had previously held the same job positions. The hearing officer upheld the denial based on a finding that Mosaic had "failed to substantiate that the jobs claimed were newly created[.]"⁴ The hearing officer also rejected Mosaic's claim that the Department mechanically denied credit for certain qualifying periods based on the Department's prior denial of a previous HWJTC application submitted by Mosaic. Mosaic appeals the hearing officer's decision and order upholding the Department's denials of credit pursuant to the replacement analysis. In addition, Mosaic appeals the hearing officer's finding that the Department fully reviewed and analyzed Mosaic's application materials and did not mechanically deny credit for any qualifying periods claimed in the present application based on the Department's denial of Mosaic's prior application.

DISCUSSION

{5} The parties raise the following issues on appeal: (1) Taxpayers allege that the hearing officers erred in upholding the Department's interpretation of the statutory term "new job" as requiring the creation of a new position; (2) Taxpayers contend that the hearing officer erred in upholding the Department's denials of credit under the replacement analysis; (3) the Department alleges that the hearing officer in the Par Five case erred by finding that Par Five was entitled to the HWJTC for promoting one of its existing employees; and (4) Mosaic argues that substantial evidence does not support the hearing officer's denial of the HWJTC.

I. Standard of Review

{6} On appeal, a decision and order issued by a hearing officer for an administrative agency will only be set aside if it is "(1) arbitrary, capricious or an abuse of discretion; (2) not supported by substantial evidence in the record; or (3) otherwise not in accordance with the law." Team Specialty Prods., Inc. v. N.M. Tax'n & Revenue Dep't , 2005-NMCA-020, ¶ 8, 137 N.M. 50, 107 P.3d 4 (internal quotation marks and citation omitted). We review a hearing officer's "interpretation of the statutory and regulatory language de novo." Giant Cab, Inc. v. CT Towing, Inc. , 2019-NMCA-072, ¶ 6, 453 P.3d 466.

II. For Purposes of the HWJTC a "New Job" Means the Creation of a Job Position That Did Not Previously Exist

{7} We begin by clarifying the definition of the statutory term "new job" for purposes of the HWJTC because the parties’ competing interpretations of this term underpin their contrasting positions with respect to the propriety of the replacement and career path promotion analyses utilized by the Department. Taxpayers contend that a "new job" is created for the purposes of the HWJTC when an employer hires a new employee . In contrast, the Department argues that creating a "new job" means creating a job position that did not previously exist. We agree with the Department.

{8} Interpretation of a statute is a question of law which an appellate court reviews de novo. See Morgan Keegan Mortg. Co. v. Candelaria , 1998-NMCA-008, ¶ 5, 124 N.M. 405, 951 P.2d 1066. In construing a statute, our primary goal is "to give effect to the intent of the [L]egislature." Dell Catalog Sales L.P. v. N.M. Tax'n & Revenue Dep't , 2009-NMCA-001, ¶ 19, 145 N.M. 419, 199 P.3d 863 (internal quotation marks and citation omitted). In discerning legislative intent, "we look first to the plain language of the statute, giving the words their ordinary meaning[.]" Flores v. Herrera , 2016-NMSC-033, ¶ 8, 384 P.3d 1070 (internal quotation marks and citation omitted). If the plain language of the statute is clear, we refrain from further interpretation. Starko, Inc. v. N.M. Human Servs. Dep't , 2014-NMSC-033, ¶ 46, 333 P.3d 947 (Vigil, C.J., dissenting). "A fundamental rule of statutory construction is that all provisions of a statute, together with other statutes in pari materia, must be read together to ascertain the legislative intent." Roth v. Thompson , 1992-NMSC-011, ¶ 15, 113 N.M. 331, 825 P.2d 1241.

{9} The term "new high-wage economic-based job" is defined under the HWJTC as "a new job created in New Mexico by an eligible employer ... that is occupied for at least forty-eight weeks of a qualifying period by an eligible employee[.]" Section 7-9G-1(M)(5) (emphasis added). The term "new job" is not further defined by the 2013 version of the HWJTC or by regulation. The hearing officers in both cases looked to dictionary definitions to elucidate the meaning of the term. They found that the word "new" means "recently come into being," and that the word "create" means "to bring into existence[.]" New , Black's Law Dictionary (11th ed. 2019); Create, Merriam-Webster Online Dictionary , http://www.merriam-webster.com/dictionary/create (last visited Feb. 24, 2021). Based on these definitions, the hearing officers concluded that "a new job is one that recently came into being and did not exist at an earlier time." On appeal, Taxpayers note that the hearing officers did not define the crucial term "job" within the phrase "new job." Taxpayers offer the definition "the regular work that a person does to earn money," in support of their contention that "new job" means "new employee." Job , Cambridge Online Dictionary , https://dictionary.cambridge.org/us/dictionary/english/job (last visited Feb. 24, 2021). Ostensibly, Taxpayers offer this definition because it specifically references a "person"—implying that the "person" doing "the regular work" is an integral component of what constitutes a "job." However, "job" is also...