BEFORE THE UTAH STATE TAX COMMISSION
) Appeal No. 01-1442
) Account No. #####
AUDITING DIVISION OF THE )
UTAH STATE TAX COMMISSION, ) Tax Type: Sales Tax
Respondent. ) Presiding: Rees
This matter came before the Commission for a Status Conference on January 9, 2002. Petitioner stated that the only issue is her request for relief from an interest assessment imposed on her for audit period April 1, 1998 through March 31, 2001. Because there are no facts in dispute, this proceeding was converted to an Initial Hearing for the purpose of making a decision on Petitioner's request.
Petitioner operates a nursery and floral business. She stated that she was visited by auditors who explained that the purpose of the audit was to review her sales and use tax records and to help her correct any problems. The auditor or auditors discovered that Petitioner had collected sales tax on her retail sales, but she had neglected to collect tax on amounts charged for delivery. Petitioner stated that she assumed delivery charges were nontaxable service charges, so she did not charge sales tax on those amounts. The Auditing Division issued a Sales and Use Tax Summary in the amount of $$$$$, including $$$$$ in interest through November 21, 2001.
Petitioner immediately corrected her sales tax practices prospectively to collect the correct amount of sales tax on retail sales that include delivery charges. However, Petitioner states that she never collected the tax and, because her business is operating in the red, she cannot afford to pay the assessment. She asks the Commission to waive the assessment.
Although Petitioner took immediate steps to correct her collections process, she is liable under the law for the uncollected tax. The Commission's policy on waiving interest assessments through adjudicative proceedings is very narrow because the Commission rarely has the opportunity in this setting to evaluate the Petitioner's financial situation. Petitioner would have to show that she relied on erroneous information or instruction by a Tax Commission staff member, and there is no such showing in this case.
Although we find Petitioner liable for the uncollected tax and interest, we refer her to the Taxpayer Services Division for further evaluation of her financial situation. The Taxpayer Services Divsion can recommend a waiver or Officer in Compromise on the basis of financial hardship.
BY ORDER OF THE COMMISSION.
The undersigned have reviewed this motion and concur in this decision.
DATED this 31st day of January , 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson