: Appeal No. 02-1125
: Acct. No. #####
Auditing Division of the Utah State :
For Petitioner: PETITIONER
For Respondent: Gale Francis, Assistant Attorney General, with Andrew Coffman and John Manning, Auditing Division
Petitioner brings this appeal from a penalty assessment issued by Respondent on May 9, 2002. Petitioner waived the Initial Hearing and this matter was argued in Formal Hearing on March 6, 2003. At issue is the 500% penalty assessment against Petitioner for the display for resale of contraband goods in the form of cigarettes that did not bear the appropriate stamp and markings as provided by law.
1. It is unlawful for a person to offer cigarettes for sale without first obtaining a license from the Tax Commission. Utah Code Ann. §59-14-101.
2. Cigarettes held for sale, use or storage in this state are subject to a cigarette tax. The tax is paid affixing stamps to each package or container. Utah Code §§59-14-204 and 59-14-205.
3. The presence on any unstamped package or container in a place of business conducting retail sales is prima facie evidence that the cigarettes are held for sale and subject to the cigarette tax. Utah Code Ann. §59-14-205 (7).
4. Any person who sells or distributes cigarettes in violation of the Cigarette and Tobacco Tax and Licensing Act is subject to a penalty of up to 500% of the retail value of the cigarettes. Utah Code Ann. §59-14-211 (2).