{
  "id": 2822634,
  "name": "AMERICAN AUTOMOBILE ASSOCIATION, INC., Appellant, v. BUREAU OF REVENUE of the State of New Mexico, Appellee",
  "name_abbreviation": "American Automobile Ass'n v. Bureau of Revenue",
  "decision_date": "1974-04-24",
  "docket_number": "No. 1293",
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  "provenance": {
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  "casebody": {
    "judges": [
      "HERNANDEZ and LOPEZ, JJ., concur."
    ],
    "parties": [
      "AMERICAN AUTOMOBILE ASSOCIATION, INC., Appellant, v. BUREAU OF REVENUE of the State of New Mexico, Appellee."
    ],
    "opinions": [
      {
        "text": "OPINION\nWOOD, Chief Judge.\nThis direct appeal from the Decision and Order of the Commissioner of Revenue involves the liability of the taxpayer for gross receipts and municipal taxes, and interest on the gross receipts tax, for the period January 1, 1969, to November 30, 1971. The taxpayer claims it is not liable because of a statutory exemption. This exemption, Laws 1966, ch. 47, \u00a7 12 (y) and Laws 1969, ch. 144, \u00a7 32, is compiled as \u00a7 72-16A-12.27, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp. 1973). It reads:\n\u201cExempted from the gross receipts tax are the receipts from dues and registration. fees of nonprofit social, fraternal, political, trade, business, labor or professional organizations.\u201d\nThe taxpayers asserts the receipts involved are from dues and registration fees and that it is a nonprofit business organization. The Bureau contests each element of the claim. We consider only whether taxpayer is \u201cnonprofit.\u201d\nTaxpayer is incorporated as a corporation without capital stock under Connecticut law. It is authorized to do business in New Mexico as a foreign corporation. The articles of incorporation state that no part of the corporation\u2019s income is distributable to its members, directors or officers. The articles also state that the corporation shall not pay dividends. The applicable bylaws state that \u201c \u2018no part of said [corporate] funds shall inure, or be distributed, to the Members of this corporation.\u2019 \u201d It is stipulated that no part of the corporate income inures to the benefit of or is distributable to members, directors or officers of the corporation.\nTaxpayer relies on the items in the preceding paragraph, asserting that these items establish that it is a nonprofit corporation.\nThe designation of taxpayer as \u201cnonprofit\u201d under Connecticut law is not conclusive on the meaning of \u201cnonprofit.\u201d State v. Sweeney, 153 Ohio St. 66, 91 N. E.2d 13 (1950). The fact that the taxpayer does not pay dividends and that no part of its income is distributed to members, directors or officers is also not conclusive on the meaning of \u201cnonprofit\u201d as used in \u00a7 72-16A-12.27, supra. State v. Sweeney, supra.\nThe determination of whether taxpayer is a nonprofit organization within the meaning of \u00a7 72-16A-12.27, supra, is to be made on the basis of what the taxpayer does and not on the basis of what it professes to be. Shaker Medical Center Hosp. v. Blue Cross of N. E. Ohio, 115 Ohio App. 497, 183 N.E.2d 628 (1962); compare United Veterans Org. v. New Mexico Prop. App. Dept., 84 N.M. 114, 500 P.2d 199 (Ct.App.1972).\nThe taxpayer works for the improvement of motoring and travel conditions at the national, state and local level. The work here is directed toward legislation, highways, taxation and safety.\nIn addition, taxpayer provides direct services to its members. These services include a \u201c \u2018guaranteed arrest bond;\u2019 \u201d bail bond of up to $5,000.00; \u201c\u2018[l]egal reimbursement fees;\u2019 \u201d emergency road service; \u201c \u2018theft reward protection;\u2019 \u201d \u201c \u2018check cashing ;\u2019 \u201d license and title service; \u201c\u2018[a]utomobile finance for purchase of tires and batteries;\u2019 \u201d and assistance in collecting small claims arising out of automobile accidents.\nThe direct services the taxpayer provides to its members shows that it confers benefits upon its members. State v. Sweeney, supra. The question is whether these benefits are a \u201cprofit,\u201d thus prohibiting taxpayer from being a \u201cnonprofit\u201d organization.\nThe gross receipts tax law defines neither profit nor nonprofit. Booth v. Gross, Kelly & Co., 30 N.M. 465, 238 P. 829, 41 A.L.R. 868 (1925) states that profits and dividends are not necessarily synonymous terms. Booth, supra, cites authority to the effect that \u201cprofit\u201d has a larger meaning than \u201cdividends\u201d and covers benefits of any kind.\nState v. Lumbermen\u2019s Clinic, 186 Wash. 384, 58 P.2d 812 (1936) states:\n\u201cProfit does not necessarily mean a direct return by way of dividends, interest, capital account, or salaries. A saving of expense which would otherwise necessarily be incurred is also a profit to the person benefited. If respondent renders to its members ... a service at a cost lower than that which would otherwise be paid for such service, then respondent\u2019s operations result in a profit to its members. . . . \u201d\nSee State v. Sweeney, supra. Compare Farmers Oil Co. v. State Tax Commission, 41 N.M. 693, 73 P.2d 816 (1937).\nThe benefits that taxpayer provides to its members are a profit to those members. Accordingly, taxpayer is not a \u201cnonprofit\u201d organization entitled to the exemption provided by \u00a7 72-16A-12.27, supra.\nThe Decision and Order of the Commissioner is affirmed.\nIt is so ordered.\nHERNANDEZ and LOPEZ, JJ., concur.",
        "type": "majority",
        "author": "WOOD, Chief Judge."
      }
    ],
    "attorneys": [
      "Dean S. Zinn, Zinn & Donnell, Santa Fe, Tibo J. Chavez, Chavez & Cowper, Belen, for appellant.",
      "David L. Norvell, Atty. Gen., Joseph T. Sprague, Bureau of Revenue, Asst. Atty. Gen., Santa Fe, for appellee."
    ],
    "corrections": "",
    "head_matter": "525 P.2d 929\nAMERICAN AUTOMOBILE ASSOCIATION, INC., Appellant, v. BUREAU OF REVENUE of the State of New Mexico, Appellee.\nNo. 1293.\nCourt of Appeals of New Mexico.\nApril 24, 1974.\nRehearing Denied June 17, 1974.\nCertiorari Issued July 25, 1974.\nDean S. Zinn, Zinn & Donnell, Santa Fe, Tibo J. Chavez, Chavez & Cowper, Belen, for appellant.\nDavid L. Norvell, Atty. Gen., Joseph T. Sprague, Bureau of Revenue, Asst. Atty. Gen., Santa Fe, for appellee."
  },
  "file_name": "0569-01",
  "first_page_order": 599,
  "last_page_order": 601
}