Court Opinion

ID: 6470750
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:15:33.052503+00
Date Added: 2024-06-11T15:53:48.126956
License: Public Domain

LOPEZ, Judge (specially concurring). I agree with the result reached in Judge Sutin’s opinion but specially concur to make clear the reasons for my so doing. I think that American Automobile Ass’n, Inc. v. Bureau of Revenue, 87 N.M. 330, 533 P.2d 103 (1975) overruled sub silentio Farmer’s Oil Co. v. State Tax Commission, 41 N.M. 693, 73 P.2d 816 (1937). In Farmer's Oil the court held that a nonprofit corporation, which sold certain types of goods to its members, was engaged in business with the object of benefit, and was therefore subject to the tax. The court found a sufficient “benefit” to the organization in “. . . the fact that it, as well as its members, receives benefit and advantage in thus fulfilling the very purpose of its corporate existence.” In American Automobile Ass’n, the court held that the benefit to members was irrelevant in determining whether the corporation was a non-profit corporation. Ascertaining whether or not the corporation was a non-profit corporation was necessary to determine the applicability of a statutory exemption for dues paid to nonprofit associations. Section 72 — 16A-12.27, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp. 1975). However, the court went on to resolve whether the corporation was “engaging in business” under § 72-16A-3(E), N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp. 1975) which is the section with which we are concerned here. “Engaging in business” was contrasted with being a nonprofit corporation, thereby implying that a non-profit corporation cannot be “engaging in business”. Thus, although Farmer’s Oil held that a non-profit corporation could be “benefited” by fulfilling its corporate purpose, the Supreme Court in the American Automobile Ass’n case appears to have adopted a strict distribution of profits test to determine “benefit”. Under this test the cooperative water association receives no benefits.