New Mexicans shopping on Amazon.com will soon find a state tax added to their bill. State officials said Monday the giant online retailer will begin collecting gross receipts taxes on purchases shipped to the Land of Enchantment beginning in April, a move that may not thrill shoppers but will likely hearten legislators looking to boost revenue amid a budget crisis and please small businesses frustrated with competing against internet companies that do not charge New Mexico taxes. “It will give much needed revenue to the state and it will allow local retailers to compete fairly,” said Simon Brackley, president of the Santa Fe Chamber of Commerce. The announcement that Amazon would start collecting New Mexico taxes comes as the state Legislature is considering legislation that would require major internet companies to charge gross receipts taxes on purchases shipped into the state. Amazon is expected to pay the base state gross receipts tax of about 5 percent.
Part of the search warrant that resulted in the resignation of Taxation and Revenue Department Secretary Demesia Padilla mentioned her alleged abuse of power in a case referred by the State Auditor. Here are the stories NM Political Report wrote about this from last year. Auditor finds possible abuse of power in Tax and Rev: Allegations revealed by the state Auditor found that (at the time) unnamed top officials in TRD could have given improper preferential treatment to a taxpayer in New Mexico. State Auditor Tim Keller referred the investigation to Attorney General Hector Balderas. A spokesman for TRD said the letter from Keller was political and, “We believe these are nothing more than unsubstantiated claims that are being driven by disgruntled former employees, who either work for the State Auditor or were fired for sexual harassment, and now they have an ax to grind.”
TRD secretary named in investigation: A letter to Gov. Susana Martinez from State Auditor Tim Keller revealed the allegations of abuse of power surrounded Taxation and Revenue Department Secretary Demesia Padilla.
I was walking out of the office late in July when I got a phone call from Justin Horwath, a reporter from The Santa Fe New Mexican with whom I’m a friend from his days at the Santa Fe Reporter. We hired his former roommate and co-worker Joey Peters to work at the same time as Justin joined The New Mexican. It was about one of Joey’s stories that he was calling about. I knew which one. Earlier that afternoon, we published a story where we reported “a leaked email from the state Taxation and Revenue Department last week was perhaps more transparent than the department intended.”
We are counting down the top ten stories through the end of the year with expanded recaps or personal recollections from the three members of the team.
Shortly after state Taxation and Revenue Department Secretary Demesia Padilla was publicly implicated in an investigation of wrongdoing, the governor’s chief of staff received a letter. Those who sent the letter, which Susana Martinez Chief of Staff Keith Gardner received on July 14, claimed to be employees “who have witnessed the decline of this department because of the unprofessional, unethical, and overall inept leadership of Demesia Padilla.”
“Since the governor is on the record that her staff are expected to hold to the highest ethical and professional standards, we hope that you’ll look into what we share in this letter, and that you’ll do something about it before more TRD staff, out of frustration, seek out the [Attorney General], the state auditor and the press as a means to address these serious concerns,” the letter reads. NM Political Report obtained the letter through a public records request with the governor’s office. In July, State Auditor Tim Keller announced a preliminary investigation contracted by his office concluded that Padilla may have interfered with the tax audit of a former client for whom she did accounting work before becoming the TRD cabinet secretary. The client, later revealed to be Bernalillo-based Harold’s Grading & Trucking, has denied knowing about or asking for any special treatment.
In July, State Auditor General Counsel Sarita Nair filed an ethics complaint against Tax Department lead attorney Brad Odell with the Disciplinary Board of the Supreme Court of New Mexico, NM Political Report has learned. The Disciplinary Board opted not to take action against Odell, citing that it lacked sufficient evidence.
When New Mexico Political Report discovered and reported on a botched redaction from the state Taxation and Revenue Department this summer, the state responded with a threat. “You purposely manipulated the document in order to reveal taxpayer return information and thwart the purpose of the redaction,” tax department spokesman Ben Cloutier wrote to us in July. “You have published taxpayer return information despite the clear intent that it remain confidential. It is unlawful for any person other than the taxpayer to intentionally reveal to any other person the taxpayer’s return information.”
Yet internal emails show at least one current tax department attorney faulted his employer, and not New Mexico Political Report, for the mishap. “I have been telling the Department for years that we are not redacting documents properly,” tax department attorney Lewis Terr wrote in an email the same day we published the story.
When the State Taxation and Revenue Department was in the process of auditing Bernalillo-based Harold’s Grading & Trucking, Secretary Demesia Padilla wanted to write an affidavit supporting tax deductions the company made in the past. This is according to an email recently released to New Mexico Political Report by the department as part of a public records request. Padilla is under investigation by the New Mexico Attorney General’s office for allegedly using her position to attempt to provide special treatment to a taxpayer for whom she previously did accounting work. State Auditor Tim Keller, whose office conducted a preliminary investigation into the matter, wouldn’t publicly identity the name of the taxpayer in question. However, a botched redaction from the tax department this summer revealed that it was Harold’s Trucking.
Before New Mexico Political Report recently reported on a botched redaction from the state Taxation and Revenue Department, we reached out to its spokesman multiple times. It took Taxation Department spokesman Ben Cloutier more than four hours to respond. And when he did, he responded with a legal threat. “Mr. Peters,” he begins in an email sent Thursday late afternoon:
Although taxpayer return information was redacted by the department to provide confidentiality, you purposely manipulated the document (i.e., you were able to get around the redaction and enhance the imagery) in order to reveal taxpayer return information and thwart the purpose of the redaction. Furthermore, you have published taxpayer return information despite the clear intent that it remain confidential.
A leaked email from the state Taxation and Revenue Department last week was perhaps more transparent than the department intended. Update: The Taxation and Revenue Department responded. Here is the response. This story continues as originally written below. State Taxation and Revenue Secretary Demesia Padilla is currently under investigation by the state Attorney General’s Office for allegedly providing or attempting special tax treatment to a former client for whom she served as a certified public accountant.
Top officials in the state Taxation and Revenue Department may have improperly given preferential treatment to a New Mexico taxpayer, according to State Auditor Tim Keller’s Office. Update: A letter from Keller to Gov. Susana Martinez names Tax and Revenue Department Secretary Demesia Padilla as part of the investigation. Our report is here. The post continues as originally written below. The allegations came from a fraud hotline call to Keller’s office in February, along with an audio recording of senior Taxation Department officials.