Team Specialty Products, Inc. v. New Mexico Taxation and Revenue Department

Team Specialty Products was purchased by new owners in November 2001, who retained the company's existing bookkeeper and her assistant. Unbeknownst to the new owners, an employee committed unauthorized credit card charges and forged a company check, and the company's application for a technology jobs and research and development tax credit for the 2001 calendar year was never filed by the statutory deadline of December 31, 2002. After discovering the oversight, the company's newly hired accountant submitted the application in September 2003 — roughly nine months late — and the Department denied it as untimely.

'May Apply' Still Created a Mandatory Deadline

The taxpayer argued that section 7-9F-9(A)'s use of the word 'may' — stating that 'a taxpayer may apply for approval of a credit within one year' — made the one-year window permissive rather than a hard deadline, contrasting it with a companion investment credit statute using the word 'shall.' The Court of Appeals rejected this argument, holding that reading the statute together with the Technology Act's other provisions on annual reporting and payroll calculations showed the Legislature intended to bind any taxpayer who chose to seek the credit to a strict one-year application window, not to create an open-ended filing period.

No Authority to Extend, and No Due Diligence Shown

The Court further held that the Department, as a creature of statute, had no express or implied authority to extend the one-year deadline, since the Technology Act — unlike other New Mexico tax statutes — contained no extension provision. The Court also found the taxpayer had not shown any due diligence in monitoring its eligibility for the credit before the employee's misconduct came to light, and rejected the taxpayer's substantive due process argument that enforcing the deadline let the state benefit from a criminal employee's wrongdoing.

The Court affirmed the hearing officer's denial of the taxpayer's protest in full.

Significance: This is the foundational New Mexico appellate decision establishing that the Technology Jobs and Research and Development Tax Credit Act's one-year application deadline is strictly mandatory, with no administrative discretion to excuse a late filing — even for sympathetic reasons like employee embezzlement — a rule subsequently applied in later New Mexico administrative decisions such as In the Matter of the Protest of Wall Company Inc.