BEFORE THE UTAH STATE TAX COMMISSION
PETITIONER, ) FINDINGS OF FACT,
) CONCLUSIONS OF LAW,
Petitioner, ) AND FINAL DECISION
v. ) Appeal No. 01-0667
) Account No. #####
AUDITING DIVISION OF )
THE UTAH STATE TAX ) Tax Type:
COMMISSION, ) Tax Year: Multiple
Respondent. ) Judge: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: PETITIONER REP 1
PETITIONER REP 2
For Respondent: Ms. Susan Barnum, Assistant Attorney General
Ms. Shelly Robinson, from the Auditing Division
Ms. Heidi Reilly, from the Auditing Division
STATEMENT OF THE CASE
This matter came before the Utah State Tax Commission for a Formal Hearing on March 19, 2002. Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is tourism tax, together with the interest thereon.
2. The period in question is January 1, 1998 through December 31, 2000.
3. The issue in this proceeding is whether to sustain an audit assessment made by Respondent for tourism tax in an amount of $$$$$, together with interest thereon at the statutory rate.
4. When Petitioner applied for its sales tax license, in the blank asking the applicant to describe the nature of the business, Petitioner stated "retail sales of coffee and snack foods". In the section asking for sales information for a sales tax license, Petitioner checked the box which says "retail sales of goods or services from a place of business located in Utah". Petitioner did not check the box which says "short-term (less than 30 days) rental or lease of motor vehicles and/or restaurant sales of prepared foods".
5. Petitioner also did not check the box which says "business location within the city limits of Alta, Brianhead, Park City or Springdale", but did show the address of the business as CITY, Utah, in the boxes requesting the address.
6. When Petitioner received its sales tax license and the forms with which to file, it did receive forms to file the resort city's tax, but it did not receive the form for restaurants selling prepared foods. Because of the boxes checked by Petitioner, the business was not encoded on the computer by the Tax Commission as a restaurant, so the tourism tax coupons were not sent to Petitioner. In addition, the tax bulletins concerning the tourism tax would likewise not have been sent to Petitioner's business.
7. Petitioner has always filed and paid its sales tax returns timely, and the only problem has been the failure to collect the restaurant tax.
8. Petitioner did not collect the restaurant tax from its customers, and any such tax paid will be required to come out of their pocket.
9. Petitioner operates the business from a ten foot by ten foot tuff shed located at CITY, Utah, and they have a bag check and ski check, together with the sale of coffee. The sales of coffee constitute more than 50% of the business of Petitioner.
10. Petitioner maintains that the reason the box which says "short-term (less than 30 days) rental or lease or motor vehicles and/or restaurant sales of prepared foods", was not checked is because he only noticed that the line was talking about motor vehicles and he did not notice the end of the line which talks about prepared foods.
11. Petitioner maintains it should not be held responsible for this "bureaucratic mistake".
12. Petitioner further argues that the Tax Commission did send him the forms for the resort area tax, even though he did not check the box. The matter was apparently caught at the Tax Commission because the address was listed as CITY, Utah. Petitioner then argues that the Tax Commission should have done likewise on the prepared foods form, even though he did not check the appropriate box, because he did state in written form that his business was "retail sales of coffee and snack foods".
In addition to any other taxes, a county legislative body may, impose a tourism, recreation, cultural, and convention tax. (Utah Code Ann. §59-12-601(1).) The City of CITY has imposed such a tax.
Utah Code Ann. §59-12-603(1)(b) provides:
"A county legislative body of any county may impose a tax of not to exceed one percent of all sales of prepared foods and beverages that are sold by restaurants;" COUNTY County has imposed such a tax.
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).
Petitioner apparently has the view that the problem was caused by a "bureaucratic mistake", apparently viewing this matter as a mistake that was made by the Tax Commission. However, the mistake was made by Petitioner when the application for a sales tax license was made, and Petitioner failed to check the appropriate box on the application form. If Petitioner had checked the correct box on the application, the appropriate forms would have been sent. Based on Petitioner's excellent compliance record, it is likely that the tourism tax on sales of prepared foods and beverages would then have been collected and remitted to the Tax Commission, and this problem would have been avoided. The determination of which taxpayers should receive the forms relating to tourism tax on prepared foods and beverages is based upon the blocks that are checked on the form at the time the application is made. That form was not properly prepared.
The Commission determines that Petitioner should be responsible for the tax, but determines that the interest should be waived.
DECISION AND ORDER
Based upon the foregoing, the Tax Commission determines that the assessment of the tourism tax for the audit period of January 1, 1998 through December 31, 2000 should be, and is hereby sustained. However, the Commission hereby waives the interest due thereon. It is so ordered.
DATED this 6th day of May , 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 6th day of May , 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson