*1 507 P.2d INC., CARPETS, a New Mexico OF

HOUSE Appellant, corporation, REVENUE, State of New Mex OF

BUREAU ico, O’Cheskey, Commission Fred L. Appellees. er of

No. 993. Appeals

Court of New Mexico. 23, 1973.

Feb.

pet protested pad. Taxpayer pursuant 72-13-38, (Repl.Vol. N.M.S.A.1953 10, pt. 2, Supp.1969). Following an informal conference with taxpayer, par- the Commissioner ordered a taxes, tial abatement the assessed with penalty. taxpayer related interest and and the Commissioner then entered into “Stipulation regarding of Facts” the re- Thereafter, maining assessments. Commissioner denied all further relief re- taxpayer protest. quested by in its having gross tax on amounts it received carpet (a) for constitutes matter, double taxation same (b) imposition gross of the under the circumstances vio- lates N.M. Const. Art. Carpets cor- a New Mexico

poration engaged selling in the business of carpet. taxpay- a customer enters When seeking carpet, about er’s store information quoted price for the total he a standard charge carpet. by the Billings installed for Hines, appel- Albuquerque, for Stuart to- to the customer reflect lant. carpet, charged pad, and in- tal amount for Norvell, Gen., stallation, Atty. along an indicated Susan P. with amount David L. Graber, Gen., price. Atty. Bureau of Reve- tax” on the entire Asst. “sales nue, Fe, appellees. for Santa physically accomplished Installation is Service, (hereinafter

OPINION corporation Service, Inc.) Mexico a New engaged installing, clean- in the business of LOPEZ, Judge. maintaining carpet and ing, repairing, and appeals Incorporated, Carpets, Plouse of anyone serv- padding requesting such for from a decision and order the Commis- however, ices; major is tax- customer 72-13-39, pursuant sioner of Revenue to § payer. 2, Supp. (Repl.Vol. 1971). Inc., Service, separate Taxpayer and are entities, separate regis- corporate

The Bureau of Revenue conducted two tration numbers subsidiaries taxpay- audits and records of books corporation. third each other or of period Sep- January er for 196-1 Inc., installing bills for the basis of these au- tember 1967. On turn, the ulti- carpet. Taxpayer, bills dits, two Bureau issued assessments of n emergency in- purchase of mate for the school, customer gross receipts, and mu- pad. taxes, stalled plus penalty nicipal and interest tax- and, Inc., installing carpet; for failure include against es for turn, carpet-pad-installa- buyer receipts, re- reported amounts gross in its goods paid taxpayer package for the Taxpay- carpet. tion installation of ceived for installed plus them the service er included in its had does not bill for use. for car- received period this amounts ceeds of sales. payment expressly customers. Where statute ceive paid gross tax on authorizes inclusion of services which are carpet. sales within the amounts received for installation of definition receipts, justified taxation is whenever *3 Taxpayer raises the theories of property requires which sold rendition appeal. agency trusteeship in his and some it service to make suitable for sale to These theories are to review. question, the customer in even the serv- change party permitted A will not be to his portion principal ice the sale cost theory “ appeal. A case on claimant Am.Jur., involved. 47 Sales and Use Tax- may ap- . appeal the court . . es, (1943). 26§ peals relief, for further but to the 72-16-2, H, supra, Section subd. theory same extent and the same as defines “retail” as . “. the sale . was asserted . . . the commis- before tangible property consumption personal for or delegate. sioner his . . .” Section tangible and not for resale in form of 72-13-39, supra. personal property, and ‘retailer’ means ev- Taxpayer’s installation are sub- ery person engaged in the business of mak- ject to gross tax. ing sales at retail.” From the facts of the Receipts by taxpayer derived from sales it can be said that is en- performed installation services gaged selling tangible in the business of January, or after July before personal property consumption by for 1, 1967, were assessed in accordance with purchaser, and not for resale. 72-16-2, the old law — Legislative language in old law 10, (Repl. pt. Vol. Supp.1965) of the 72-16-2, H, supra, of the Emer subd. —§ Emergency Act, School Tax was a which Act, gency evidencing Tax the in School privilege tax on businesses then in force. impose proceeds tent sales tax on the a This statute remained July in effect until along of retail sales from relat with those 72-16-2, D, supra, 1967. Section subd. services, clearly required ed taxation “gross receipts” defines as: receipts. Dike See “ sum, . . . the total . . . Corporation wood v. Bureau of compensation ceived as personal for (1964). professional services, for the exercise of case, taxpayer provided a a privilege imposed by tax is service, installation, product render the Act, Emergency School Tax . use. See sold suitable for customer’s total of a derived Mahin, 183, 277 N.E.2d Spagat 50 Ill.2d v. trades, business, commerce, and the ; Income Tax Division (1971) Gross gross proceeds of sales as hereinafter Co., Ayres 118 N.E. & 233 Ind. L. S. defined, . .” . 2d 480 72-16-2, E, Section supra, subd. defines Receipts Compensating Gross “gross proceeds of sales” as: July Tax Act became effective “. . . proceeding sum or value Taxpayer’s receipts transac- derived from accruing or tangible from the sale of after date were occurring on or tions personal property, . . . and includ- provisions. its assessed in accordance any ing part services that of such Emergency old School to the Similar sales, ., . . whether received law, 72-16A-2, Act, the new N.M. Tax money otherwise, or . . . Supp.1967), S.A.1953, (Repl.Vol. passed provide This . revenue inclusion of taxable was “. . encompasses purposes by levying on the public those of a tax for here. The Emergency Act, privilege engaging in activities specifically School Tax certain provided that services . .” Section which are of within New Mexico. 72-16A-3, B, tangible personalty, supra, that: sale states such car as subd. “ pet pad, pro- ‘selling’ any transfer of ‘buying’ be included in or the taxable means once, perform- been assessed seller who does consideration property for consideration; resale, for thus clearly thus not sell obli- ance of service gated paying what its portions of bear burden of embracing again both gross receipts Subparagraph tax due. has not taxpayer sells customers. receipts” “gross propor- asked more than defines this section F of pro- tional fair share has it in differently the former nor fact than somewhat vision, amount of mon- even one of the contested taxes. the total “. consideration, re- “ other ey value of or the Mexi- property in selling New ceived from used a nontaxable certificate had been [i]f performing services co, . or Carpets, and then *4 Mexico, . . . in New Cai'pet been liable Service would have applica- interpret the seeks tax; .” We disa the entire . . . Receipts and Com- bility of both the Gross gree. Had delivered Emergency the pensating Tax Act and certificate, Inc., a nontaxable transaction current by citing from the Act Tax School re only have been would 72-16A-14.3, statute, liability receipts be gross lieved the tax Supp.1971) and from pt. (Repl. Vol. of a as a seller service cause its status Regulations, Revenue G. current Bureau of 72-16A-13, for resale. N.M.S.A. Section March Regulation effective R. 14.2^4 2, Supp.1967). (Repl. 1953 Vol. However, subsequezit neither the 1972. further new the relevant amendments nor “ conversely, the Receipts Compensation and or old Gross Carpet a nontaxable Service delivered given ef- Regulations were retroactive Tax Carpet, transaction cez'tificate House 144, 37; New fect. Laws 1969 ch. See liable for would be then House of Receipts Compensating Mexico Gross the in addition to the 1967; Septembez-, Regulations, Tax Act 72-16A-13, pad. Section Pertaining Regulations in Effect and buyer, only supra, the clear that makes Receipts Com- the New Gross Mexico registration applied for a has or had who 5, 1969; Act, pensating" Tax December number, may nontaxable transac execute a Pertaining to Regulations in Effect and case, present tax In the tion certificate. Receipts and Com- the New Mexico Gross Service, Inc., buyer, the payer is the Act, Tax March pensating Had a non for resale. seller of service taxation. There has been no double proper been transaction certificate taxable contends that service, ly delivered, ? the reseller of pay gross receipts it re tax on amounts be liable for (taxpayer case) in this cai'pet ceived constitutes for installation of receipts payment gross tax. Izic. had double taxation since Tractor Co. v. Bu- of Rust In the case receipts tax its 82, 475 P.2d 779 82 N.M. reau of disagree. for installation. We argued (Ct.App.1970), Rust support position, taxpayer In cited compen- imposed. There, a tax had been the definition of “double taxation” upon taxpay- assessed sating “use” tax was imposition “double “the assessment” as leased, rented or equipment which was er’s tax, power, by taxing same same pre- tax had “sales” and a upozi subject Aragon the same matter.” v. imposed upon derived viously been Empire Co., 47 Mining Milling Gold & by those payment rental N.M. 142 P.2d 539 same leased. The property was whom assess- opinion in both gross receipts equipment In our tax involved was was taxes imposed upon held that two this instance the same The court mezrts. subject matter; trans- imposed upon an identical in this were not matter case stages or trans- separate action; two distinct consists of two transactions or rather despite identity of found, instance, taxpayer sales. has were In this actions required inequality No nonuniformity who was the seller-lessor taxing taxpayer’s existed. sulted No double taxation un- both taxes. der the clear mandate of revenue laws. though In the even Taxpayer has been assessed in exactly the partic- on these may have taxed same tangible manner as other sellers of transactions, there no second ular sets of personalty or services therein. by per- upon property the same owned son, prior tax- for there was no The decision of af- the Commissioner is payer. Service, Inc., paid Only an earlier firmed.

tax. It is so ordered. Taxpayer’s point final stated as fol- SUTIN, J., concurs. lows : HENDLEY, J., specially concurring.

Acceptable tax is on equality and based uniformity. FIENDLEY, Judge (specially concur- ring). New Mexico State Board of Public Grant, Accountancy P. I with the result reached Court, Supreme 2d (1956), in dis majority opinion *5 but cannot the with cussing double taxation and N.M.Const. reasoning. 8, 1, Art. said: § First, disagree part I with that the of argued permit “It is also that is to what majority opinion under the heading “Tax- attempted here amounts to double taxa- payer’s subject 1, VIII, tion and Art. violates Const. gross receipts tax” for the reason that tax- equality requiring uniformity of tax- payer argue does not taxability the of the upon subjects ation of taxation of the taxpayer’s argument The services. that same class. We fail to see wherein since the taxes have been collected from any taxation, there double however taxpayer one whom appropriate dfeemsthe otherwise, if viewed. Even it were there person (Service, Inc.) should exists against constitutional inhibition no have to again. Implicit them tax- in double taxation. payer’s argument is a concession that the Revenue, Rust Tractor Co. Bureau of services are taxpayer. taxable but not to supra, provided example another of this Second, disagree I part that the with of proposition. Rust that a contended opinion majority heading under the “There imposed tax had a been which constituted has been no double taxation” for the rea- protection denial equal laws, of un- son that it the be- misconceives issue. I Constitutions, der the State Federal lieve that the matter is and should be dis- 8, and violated N.M.Const. Art. 1. The posed on statutory of the basis of the provi- court decided that no constitutional scheme. opinion sion had been violated. The cited presently question The taxes in which several support in of authorities the addi- period cover January the tional principle that in field of the taxa- September the 1967 were levied under tion, heavy a burden with one rests who provisions of three successive but similar constitutionality the legis- attack of 5; laws. Laws ch. ch. Laws lation. Michael Bureau Maloof & Co. v. J. 325; and Laws ch. 47. The stated Revenue, 80 N.M. 458 P.2d 89 purpose the three successive laws (1969). Edmunds v. Bureau of levy has at all relevant times been to taxa doing privilege on the the business in has not shown un The State of New Mexico. total reasonable classification in the' of every subject statutes business the themselves, any unequal ceipts nor or the nonuniform has at all relevant times application statutory presumption of the laws to it. of taxa- Legislature the present case goods the sell In

bility. businesses Those as- to be for the tax provided the means permitted resale have been and services for once, by using namely, nontaxa- sessed but receipts of such sales the to deduct Not transaction certificates. they ble receive a certif- their avoiding the means for himself of a resale certificate availed icate, originally called taxpayer is left with question, in transac- the tax presently called a nontaxable taxability. presumption of certificate, purchaser. the the tion undisputed present it disagree Lastly, I appropri- use of the not make did heading “Ac- majority opinion under the dealings with type in its ate of certificate uni- ceptable equality tax is based stipulation to is a Inc. There majority’s formity” that the for the reason audit, which subsequent to the effect that issue misconceives discussion question, produced here the assessments taxpayer. reason for presented by a nontaxable delivered differing misconception is defini- this Inc. transaction certificate by the ma- used tions of “double taxation” however, This, does the taxpayer. pointed As out jority delivery such certifi- good. The no argu- paragraphs preceding permit recipient of cate serves as "double against ment what he views certificate, in this case legislative intent as is based on taxation” product service value deduct the scheme, in the while expressed sold for resale. possi- majority’s relates to a discussion presented as frames issue explicitly issue not ble constitutional understand of “double taxation.” I one unnecessary argued by taxpayer and taxpayer to mean that since decision of the case. *6 price tax on VIII, provides in Art. N.M.Const. be that it would of the installation services equal shall be that: “. taxes permit contrary legislative intent to to the in upon subjects taxation and uniform those same the Bureau of Revenue the same class.” meaning taxpayer. Taxpayer’s receipts to is taxation” different of the term “double imposition of Taxpayer contends that the Aragon meaning given in the require- this case violates majority opinion. Tax- in the case cited VIII, Art. ments of the N.M.Const. taxation”, as argument that “double payer’s to this contention is that answer it, depend prohibited is does he defines equal and statutory provides an scheme prohibition as the constitutional uniform method of taxation. majority apparently have it. Rath- nontaxable er, taxpayer argues type could have used that this by contrary provided stat- .prohibited certificates taxation because it..i-s transaction taxpayer’s argue his own legislative He now to the intent. It ute. cannot intent, legislative himself the deductions that it is the failure to avail contention by permitting by provisions provided statute render as manifested imposes unequal for re- burdens the deduction of from sales scheme but sale, assessed that the tax “. .be v. Bureau are not Gruschus uniform. See deciding, that Assuming, once.” without P.2d 105 legislative pur statement pre pose correct, cannot still I concur foregoing reasons For the Jones, N. vail. As we said in Reed v. af- majority in the result reached (Ct.App.1970): M. Bu- firming and order of the decision “. . The burden is on the reasoning reau, but I cannot clearly right the de- establish his used to that result. achieve duction.