BEFORE THE UTAH STATE TAX COMMISSION
PETITIONER, ) ORDER
Petitioner, ) Appeal No. 01-0577
v. ) Account No. #####
AUDITING DIVISION OF ) Tax Type: Sales
THE UTAH STATE TAX )
COMMISSION, ) Audit Period: 10/01/96 thru 12/31/98
Respondent. ) Judge: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: PETITIONER REP, from COMPANY A
For Respondent: Ms. Anna Anderson, from the Auditing Division
STATEMENT OF THE CASE
This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. '59-1-502.5, on October 16, 2001.
Petitioner was assessed additional sales and use taxes for the audit period of October 1, 1996 through December 31, 1998, together with interest thereon at the statutory rate. No penalties were imposed on the audit assessment. The basis for the additional taxes was for disallowed exempt sales and unreported taxable purchases. The majority of the tax assessed was for several large purchases made from a few companies.
Petitioner has presented evidence that some of those companies were authorized to do business in the State of Utah during the times at issue, and one or more of those companies was not qualified to do business, but should have obtained a license to do business in the State of Utah. Therefore, Petitioner argues that the companies had the responsibility to collect and remit the sales tax to the State of Utah, and Respondent should therefore look to those companies for collection and payment of the tax. Petitioner does not allege that it paid the tax on any of the invoices in question.
Petitioner is concerned that perhaps Respondent has also imposed the same tax upon the sellers, and therefore is attempting to collect the tax twice, once from the seller and once from Petitioner. Petitioner has therefore requested information concerning any audits of the sellers of the materials. However, such information is confidential and cannot be disclosed, but, it is the policy of the Commission to not collect the tax twice on any transaction.
The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. Utah Code Ann. §59-1-401(10).
It is the duty of the vendor to collect the tax from the vendee and to remit it to the Tax Commission. E. C. Olson Company v. State Tax Commission, 109 Utah 563, 168 P. 2d 324 (1946). However, where the tax is not collected by the vendor, the consumer of the goods has the primary liability for payment of the sales tax. Ralph Child Construction Co. v. United States, 365 F. 2d 841 (10th Cir. 1966).
DECISION AND ORDER
Based upon the foregoing, the Commission determines that the tax imposed by Respondent upon Petitioner was appropriate, and that Petitioner has not paid the tax to any vendor or any other person, and is therefore liable for the tax. The audit assessment of Respondent upon Petitioner is hereby sustained and affirmed. It is so ordered.
This decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134
Failure to request a Formal Hearing will preclude any further appeal rights in this matter.
DATED this 10th day of January, 2002.
G. Blaine Davis
Administrative Law Judge
BY ORDER OF THE UTAH STATE TAX COMMISSION.
The Commission has reviewed this case and the undersigned concur in this decision.
DATED this 10th day of January, 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson