Q: The question is about requirements for NTTCs in NM when selling art on commission & statute of limitations for audits.
I am an artist in NM. In 2013 & 2014 I sold work through a gallery. They collected gross receipts tax from buyers & paid taxes on the full amount of each sale. I reported the income I received from sales on federal & state returns. Recently I was audited by NM Tax. & Rev. They claim I owe gross receipts tax on that income. I explained the situation to the auditor & he told me the gallery should have given me an NTTC. The gallery had never done this with any of their artists. How is this typically handled with a gallery if not by NTTCs?
Furthermore, I asked why I was being audited for taxes so far back & the auditor said he was not allowed to look at returns for 3 years in case they were amended. But I looked up the law & it seems to me that auditing is actually required to happen within 3 years. Is this correct? Is there anything I can do to counter this assessment? They assessed a grand total of $7.34 for unpaid tax within the past 3 years, then over $1000 for 4-6 years ago.
Based on the information you provided, you are actually in a somewhat complicated situation. You’re going to need to “get moving” soon, because there’s a 60-day within which you need to apply for a retroactive exemption to the NTTC. This pamphlet should get you started: https://smartpay.gsa.gov/sites/default/files/FYI-204%20Nontaxable%20Transaction%20Certificates%20NTTCs%20%281%29.pdf
If all of this information is too complicated and you would like a licensed New Mexico attorney to help, please contact me. I may be able to help you further. Email me at: Digiacomo@troonlaw.com
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