N.M. Stat. § 7-1-25 (2026)

A. If the protestant or secretary is dissatisfied with the decision and order of the
hearing officer, the party may appeal to the court of appeals for further relief, but only to
the same extent and upon the same theory as was asserted in the hearing before the
hearing officer. All such appeals shall be upon the record made at the hearing and shall
not be de novo. All such appeals to the court of appeals shall be taken within thirty days
of the date of mailing or delivery of the written decision and order of the hearing officer
to the protestant, and, if not so taken, the decision and order are conclusive.

   B. The procedure for perfecting an appeal under this section to the court of appeals
shall be as provided by the Rules of Appellate Procedure.

   C. Upon appeal, the court shall set aside a decision and order of the hearing officer
only if found to be:

       (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.

    D. If the secretary appeals a decision of the hearing officer and the court's decision,
from which either no appeal is taken or no appeal may be taken, upholds the decision of
the hearing officer, the court shall award reasonable attorney fees to the protestant. If
the decision upholds the hearing officer's decision only in part, the award shall be
limited to reasonable attorney fees associated with the portion upheld.

History: 1953 Comp., § 72-13-39, enacted by Laws 1965, ch. 248, § 27; 1966, ch. 30, §
3; 1973, ch. 167, § 1; 1979, ch. 144, § 24; 1985, ch. 65, § 15; 1986, ch. 20, § 16; 1989,
ch. 325, § 7; 2015, ch. 73, § 16.

                                      ANNOTATIONS

Cross references. — For Rules of Appellate Procedure, see Rule 12-101 NMRA et
seq.

The 2015 amendment, effective July 1, 2015, provided for appeals from hearing
officers’ decisions; in the catchline, after "Appeals from", deleted "secretary’s" and
added "hearing officer’s"; and in Subsection D, after "shall award reasonable", deleted
"attorney’s" and added "attorney", and after "limited to reasonable" deleted "attorney’s"
and added "attorney".

Temporary provisions. — Laws 2015, ch. 73, § 36 provided:

A.      On July 1, 2015, all personnel, functions, appropriations, money, records,
furniture, equipment and other property of, or attributable to, the hearings bureau of the
office of the secretary of taxation and revenue shall be transferred to the administrative
hearings office.

B.      On July 1, 2015, all contractual obligations of the hearings bureau of the office of
the secretary of taxation and revenue shall be binding on the administrative hearings
office.

C.     On July 1, 2015, all references in statute to the hearings bureau of the office of
the secretary of taxation and revenue or hearing officers of the taxation and revenue
department in Chapters 7 and 66 NMSA 1978 shall be deemed to be references to the
administrative hearings office or a hearing officer of the office.

D.    Rules of the taxation and revenue department pertaining to hearing officers and
the conduct of hearings pursuant to actions related to Chapter 7 or 66 NMSA 1978 shall
be deemed to be the rules of the administrative hearings office until amended or
repealed by the office.

The 1989 amendment, effective June 16, 1989, in Subsection A, substituted
"protestant or secretary" for "protestant or claimant" and "the hearing officer, the party"
for "the secretary, the protestant or claimant" in the first sentence and "the hearing
officer to the protestant" for "the secretary to the protestant, or claimant" in the last
sentence of the subsection; substituted present Subsection B for the provisions of
former Subsections B and C, specifying the procedure for perfecting an appeal under
this section; redesignated former Subsection D as present Subsection C, substituting
"hearing officer" for "secretary" near the beginning; and added present Subsection D.

                          I.     GENERAL CONSIDERATION.

Section grants court of appeals jurisdiction to review director's ( hearing officer's)
decisions. — Court of appeals lacks jurisdiction to review decisions of the
commissioner (hearing officer) under the Administrative Procedures Act (12-8-1 to 12-8-
25 NMSA 1978), but does have jurisdiction to review such decisions under this section
of the Tax Administration Act. Westland Corp. v. Commissioner of Revenue, 1971-
NMCA-083, 83 N.M. 29, 487 P.2d 1099, cert. denied, 83 N.M. 22, 487 P.2d 1092.

Scope of jurisdiction. — The court of appeals has jurisdiction in appeals from a
hearing officer's decision and order whether the issues are deemed to arise out of a
claim for refund or out of the protest of an assessment. Kaiser Steel Corp. v. Revenue
Div., Taxation & Revenue Dep't, 1981-NMCA-042, 96 N.M. 117, 628 P.2d 687, cert.
denied, 96 N.M. 116, 628 P.2d 686.

Untimely notice of appeal. — Where taxpayer protested an assessment of tax by the
New Mexico taxation and revenue department (department) on gross receipts for
commissions earned on the sale of implantable prosthetic devices, and where the
hearing officer filed his decision and order in favor of taxpayer, finding that taxpayer's
commissions were not subject to the gross receipts tax, and where the hearing officer
denied the department's motion for reconsideration, which was filed fifteen days after
the hearing officer's decision, and where the department filed its notice of appeal
twenty-three days after denial of its motion for reconsideration and thirty-eight days after
the filing of the hearing officer's decision and order, the department's appeal was
untimely because this section unambiguously requires that appeals be taken within
thirty days of the hearing officer's decision and order, and nothing in this section allows
for the tolling of the period for filing a notice of appeal. In re Gelinas, 2020-NMCA-038,
cert. denied.

                                       II.    APPEAL.

                                  A.         IN GENERAL.

Record must indicate reasoning and basis of denial of protest. — Although the
commissioner (hearing officer) is not required to make formal findings of fact and
conclusions of law, the record presented to the court for review must indicate his
reasoning and the basis on which he denied the taxpayer's protest and in the absence
of this matter must be remanded for further proceedings. Title Servs., Inc. v.
Commissioner of Revenue, 1974-NMCA-014, 86 N.M. 128, 520 P.2d 284.

Meaning of "claimant" and "taxpayer". — The court of appeals had no jurisdiction
over the appeal of an Indian tribe which had been denied the right to intervene in a
protest brought by a construction company over assessment of gross receipts tax on
receipts under a contract between the tribe and the company, despite the fact that
contractual indemnity provisions would ultimately render the tribe liable to the company
for any tax due; the tribe was not a "claimant," (term "claimant" no longer in statute)
since no taxes had yet been paid, and was not a "taxpayer" since the taxes were
assessed not to it but to the company. Mescalero Apache Tribe v. Bureau of Revenue,
1975-NMCA-130, 88 N.M. 525, 543 P.2d 493, cert. denied, 89 N.M. 206, 549 P.2d 284
(1976).

"Unjust enrichment". — A hearing officer acted in a manner inconsistent with the law
in weighing additional equitable factors beyond those required by the doctrine of
equitable recoupment, thereby undercutting the required factors, where taxpayer paid
correct amount of tax but mistakenly did so as a compensating use, not gross receipts,
tax. Teco Invs., Inc. v. Taxation & Revenue Dep't, 1998-NMCA-055, 125 N.M. 103, 957
P.2d 532.
                              B.     ISSUE AT HEARING.

Waiver of issues. — The taxation and revenue department waived the issue whether
the taxpayer failed to properly pursue its remedies under the Tax Administration Act by
not raising the issue prior to appeal. Kaiser Steel Corp. v. Revenue Div., Taxation &
Revenue Dep't, 1981-NMCA-042, 96 N.M. 117, 628 P.2d 687, cert. denied, 96 N.M.
116, 628 P.2d 686.

Issue not raised at hearing cannot be heard on appeal. — The appeal to a court of
appeals from the commissioner's (hearing officer's) decision is on the record made at
the hearing. If the record does not show an issue was raised at the hearing, this issue is
not before the appellate court for review. Till v. Jones, 1972-NMCA-046, 83 N.M. 743,
497 P.2d 745, cert. denied, 83 N.M. 740, 497 P.2d 742.

If an issue is not raised at the formal hearing, it is not an issue in the appeal. In re
Ranchers-Tufco Limestone Project Joint Venture, 1983-NMCA-126, 100 N.M. 632, 674
P.2d 522, cert. denied, 100 N.M. 505, 672 P2d 1136.

Appeal to same extent and upon same theory as hearing. — This section provides
that the appeal to an appellate court is only to the same extent and upon the same
theory as was asserted in the hearing. N.M. Sheriffs & Police Ass'n v. Bureau of
Revenue, 1973-NMCA-130, 85 N.M. 565, 514 P.2d 616.

A party will not be permitted to change his theory of a case on appeal, thus precluding
from consideration questions or issues which were not raised at the hearing. Kaiser
Steel Corp. v. Revenue Div., 1981-NMCA-042, 96 N.M. 117, 628 P.2d 687, cert. denied,
96 N.M. 116, 628 P.2d 686.

Audit items not protested or issue in hearing not reviewable. — Since the appellant
did not protest items included in audit and these items were not an issue at the hearing,
appellant may not challenge, in the court of appeals, the sufficiency of the evidence as
to receipts from these items when they were not an issue in the hearing because this
section authorizes appeals to this court only to the same extent and upon the same
theory as was asserted in the hearing before the commissioner (hearing officer).
Archuleta v. O'Cheskey, 1972-NMCA-165, 84 N.M. 428, 504 P.2d 638.

Arguments not raised at hearing not reviewable. — The taxpayer did not raise the
argument before the bureau (hearing officer) that the base figure for the gross receipts
tax was not correct and therefore it need not be considered on appeal. Floyd & Berry
Davis Co. v. Bureau of Revenue, 1975-NMCA-143, 88 N.M. 576, 544 P.2d 291.

                                    III.   RECORD.

Question of law not binding but inference from facts conclusive. — As all facts
before the commissioner (hearing officer) and relating to both questions were stipulated,
accordingly, if but one inference can reasonably be drawn from the stipulated facts, a
question of law is presented and a finding of the commissioner (hearing officer) to the
contrary is not binding on the reviewing court. If, however, more than one inference can
reasonably be drawn, then the finding of the commissioner (hearing officer) is
conclusive. Rust Tractor Co. v. Bureau of Revenue, 1970-NMCA-107, 82 N.M. 82, 475
P.2d 779, cert. denied, 82 N.M. 81, 475 P.2d 778; Rock v. Commissioner of Revenue,
1972-NMCA-012, 83 N.M. 478, 493 P.2d 963.

                          IV.    GROUNDS FOR REVERSAL.

                                  A.     ARBITRARY.

If Paragraphs (2) and (3) of Subsection D (now Subsection C) are satisfied, then
Paragraph (1) satisfied. — Since the order was supported by substantial evidence and
was in accordance with applicable law, it was neither arbitrary nor capricious and its
entry was not an abuse of discretion. Union Cnty. Feedlot, Inc. v. Vigil, 1968-NMCA-
088, 79 N.M. 684, 448 P.2d 485.

Double taxation is not necessarily arbitrary or capricious. N.M. Sheriffs & Police Ass'n
v. Bureau of Revenue, 1973-NMCA-130, 85 N.M. 565, 514 P.2d 616.

"Income". — The New Mexico taxation and revenue department's determination of the
taxpayers' tax liability was not arbitrary and capricious; the taxpayers' arguments that
their wages from their employment were not "income" were frivolous and without any
legal support. Holt v. N.M. Dep't of Taxation & Revenue, 2002-NMSC-034, 133 N.M. 11,
59 P.3d 491.

Ruling arbitrary if all evidence not considered. — Since the commissioner (hearing
officer), before arriving at a decision, did not consider all of the evidence presented at
the hearing but only that pertaining to the "indicia" under G.R. Regulation 12.5:1
(3.2.105.7 NMAC), the court could not say that the commissioner (hearing officer) would
have reached the same conclusion had all of "the evidence presented and admitted"
been considered as required by Section 7-1-24G NMSA 1978 (now Section 7-1-24(I)
NMSA 1978), and therefore held the ruling reversed for arbitrariness. Eaton v. Bureau
of Revenue, 1972-NMCA-114, 84 N.M. 226, 501 P.2d 670, cert. denied, 84 N.M. 219,
501 P.2d 663.

                           B.     SUBSTANTIAL EVIDENCE.

Evidence viewed in light most favorable to director's (hearing officer's) decision.
— The duty of the court of appeals is to determine whether there is substantial evidence
in the record to support the order, viewing all evidence in the light most favorable to the
commissioner's (hearing officer's) decision. Floyd & Berry Davis Co. v. Bureau of
Revenue, 1975-NMCA-143, 88 N.M. 576, 544 P.2d 291.

Review of evidence. — Whether previous owner sold out its business and whether
plaintiff purchased that business is a question of fact and, accordingly, this court
examines the facts. In doing so, it views the evidence in the light most favorable to the
commissioner's (hearing officer's) decision. Sterling Title Co. v. Commissioner of
Revenue, 1973-NMCA-086, 85 N.M. 279, 511 P.2d 765.

Only favorable evidence considered. — In determining whether there is substantial
evidence in the record, the court considers only favorable evidence and views that
evidence in a light most favorable to the commissioner's (hearing officer's) decision.
Westland Corp. v. Commissioner of Revenue, 1972-NMCA-147, 84 N.M. 327, 503 P.2d
151, cert. denied, 83 N.M. 22, 487 P.2d 1092; C & D Trailer Sales v. Taxation &
Revenue Dep't, 1979-NMCA-151, 93 N.M. 697, 604 P.2d 835.

Director's (hearing officer's) determination conclusive if more than one inference
drawn. — If more than one inference can reasonably be drawn from the evidence, then
the determination made by the commissioner (hearing officer), that the books and
records were inadequate, is conclusive. Waldroop v. O'Cheskey, 1973-NMCA-146, 85
N.M. 736, 516 P.2d 1119.

Conclusion must be supported by entire record. — In resolving conflicts in the
evidence in support of the findings, it is not contemplated, nor is it consistent with
reason, that words, phrases, clauses or sentences may be selected out of context and
then combined to give support for a conclusion which is not supportable by the entire
text of the testimony of the witnesses on the particular subject or subjects from which
the selections are taken. McVean & Barlow, Inc. v. N.M. Bureau of Revenue, 1975-
NMCA-128, 88 N.M. 521, 543 P.2d 489, cert. denied, 89 N.M. 6, 546 P.2d 71.

Presumption of assessment's correctness overcome when no substantial
evidence supports. — The assessment is presumed to be correct; the taxpayer may
overcome the presumption of correctness of the assessment by presenting evidence
and showing that the decision of the bureau (now department) is not supported by
substantial evidence. Floyd & Berry Davis Co. v. Bureau of Revenue, 1975-NMCA-143,
88 N.M. 576, 544 P.2d 291.

Presumption not overcome when contradictory evidence presented. — Evidence
that the construction contract between the taxpayer, a contracting business, and a
corporation created a ceiling price was not compelling in view of the contradictory
evidence as to the actual cost of the construction, and the presumption of correctness of
the assessment of gross receipts tax was not overcome. Floyd & Berry Davis Co. v.
Bureau of Revenue, 1975-NMCA-143, 88 N.M. 576, 544 P.2d 291.

Since there was substantial evidence to support decision that the moneys paid to
taxpayer were used solely for taxpayer's own obligations and purposes, and the
appellate court found nothing in the record to indicate that any of the sums were used
by taxpayer to pay the debts of any of the other three corporations, they were properly
taxable under Gross Receipts and Compensating Tax Act (Chapter 7, Article 9 NMSA
1978). Westland Corp. v. Commissioner of Revenue, 1972-NMCA-147, 84 N.M. 327,
503 P.2d 151, cert. denied, 83 N.M. 22, 487 P.2d 1092.
                           C.     ACCORDANCE WITH LAW.

Decision not in accordance with law if record not complete. — Under Subsection
D(3) (Subsection C(3)), the court will set aside a decision and order of the
commissioner (hearing officer) if it is found to be not in accordance with law, and the
court's review, pursuant to Subsection A, must be based upon the record. Since there
was nowhere in the record any indication that the ordinance in question even existed
and the court found it impossible to proceed without some knowledge of the
considerations underlying the bureau's (department's) action, the case was remanded
so that the record could indicate the bureau's (department's) reasoning and basis for
denial of taxpayer's request. Co-Con, Inc. v. Bureau of Revenue, 1974-NMCA-134, 87
N.M. 118, 529 P.2d 1239, cert. denied, 87 N.M. 111, 529 P.2d 1232.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 72 Am. Jur. 2d State and Local
Taxation §§ 711, 718, 786, 787, 820, 827.

Propriety of certiorari to review decisions of tax boards, 77 A.L.R. 1357.

84 C.J.S. Taxation §§ 452 et seq., 654 to 655, 763 to 773, 815 to 823; 85 C.J.S.
Taxation §§ 907 et seq., 1073 et seq., 1762 et seq.