BEFORE THE UTAH STATE TAX COMMISSION
TAXPAYER SERVICES DIVISION, ) ORDER DENYING REQUEST
UTAH STATE TAX COMMISSION, ) FOR RECONSIDERATION
Petitioner, ) Appeal No. 03-1253
v. ) Account No. #####
RESPONDENT, ) Tax Type: Sales Tax/Revocation
) Judge: Chapman
STATEMENT OF THE CASE
This matter is before the Commission from a Request for Reconsideration and Second Request for Hearing (ďRequestĒ) filed by the Respondent on July 9, 2004, in response to the Order of Revocation of its sales tax license issued by the Commission on June 21, 2004. The Order of Revocation was issued upon the Respondentís noncompliance with the terms of a Stipulation entered into by the parties on January 29, 2004 and approved by the Commission on February 5, 2004. The Respondentís Request addresses the following points.
1. The Respondent asks for reconsideration on its belief that the Commission is mistaken as to the efforts the Respondent has made to meet its delinquent tax obligations. The Respondent indicates a lack of sufficient cash flow necessary to make the payments agreed to in the Stipulation, a fact that Commission already considered when it made its decision to revoke the Respondentís sales tax license. In addition, we note that, pursuant to Item 7 of the Stipulation, ďeconomic hardship will not be considered a justification for failing to comply with th[e] stipulation.Ē
In addition, the Respondent challenges the Commissionís conclusion that the Respondent has not made sufficient efforts to meet its stipulated payments. Once again, in its Request as it had in its Reply to Order to Show Cause and Request for Hearing (ďReplyĒ), the Respondent states that its cash flow would not permit it to make monthly payments of the amount required under the Stipulation. However, once again, the Respondent is extremely vague in its assertions and its promises. No evidence was submitted in its Reply to show what its monthly cash flows had been and was at the time it submitted it Reply or what amounts had been generated by such cash flow and could have been applied each month toward the delinquent amounts, but were not. What was and remains apparent is the Respondentís total failure to make any payment toward its delinquent balance after February 26, 2004.
The Respondentís decision, after February 26, 2004, not to make payments toward its delinquent tax liability was a major factor in the Commissionís decision to revoke the Respondentís sales tax license. Although the Respondent claims in its Request that the Commission must have assumed that the Respondent had sufficient cash flow to make the payments agreed to in the Stipulation, the Respondent is incorrect. The Commission was not mistaken as to this fact. The Commission made no conclusion as to whether the Respondent had sufficient cash flow to meet its stipulated monthly payment because the Respondent did not provide enough information on which to base such a conclusion.
However, there was sufficient information to show that the Respondent agreed to make certain payments and did not do so. In addition, there was sufficient information to show that the Respondent did not make any monthly payments towards it delinquent liability after February 26, 2004, including payments smaller than that required in the Stipulation, but which its cash flow might have allowed. The Commission might have been convinced of the Respondentís desire and ability to meet its sales tax obligations if it had made the partial payments its cash flow might have permitted and if it had proven that its cash flow could only have supported such payments. But the Respondent did neither. After a history of noncompliance and disregard for the tax laws of Utah, the Respondentís decision, after February 26, 2004, not to make anypayments toward its delinquent tax liabilities convinced the Commission that the Respondent was either insincere in its commitment to comply with the law or did not have the ability to meet its obligations. The Commission does not find that it based its decision to revoke the Respondentís sales tax license on a mistake of fact concerning the Respondentís cash flow. The Respondent is merely rearguing those arguments already presented in its Reply and already considered by the Commission when it issued its Order of Revocation.
2. and 3. The Respondentís second and third points both involve the Respondentís filing of sales tax returns. The Petitioner claims that the Commission was mistaken as to whether the Respondent had filed its sales tax returns and whether the Petitioner had stated it had not filed the returns due. However, the Commission was not mistaken in its Order of Revocation as to whether the Respondent had filed its sales tax returns for the last quarter of 2003 and the first quarter of 2004. In the Order of Revocation, we acknowledged that the Respondent had stated that it had filed these returns, copies of which were attached for the Commission to review. Nevertheless, from the evidence and arguments submitted by the Respondent in its Reply, it is reasonable to assume that the Respondent did not timely file these returns. Nowhere did the Respondent indicate in its Reply that these returns had been timely filed. On the contrary, the Respondentís precise language concerning these returns was that the ďRespondent has now filed all returns required[.]Ē
In Exhibit 3 attached to its Reply, the Respondent admitted that it was mistaken concerning its completion of its 2003 obligations. The copy of the actual return submitted for the 4th quarter of 2003 (Exhibit 1) was undated and unsigned. The return for the first quarter of 2004 (Exhibit 2) was signed on May 5, 2004, two days after its due date. Although the Commission believes it is reasonable to assume that both of these returns were untimely filed for the above reasons, the Commission believed the Respondentís claim that the returns had been filed by the time the Reply was submitted. Accordingly, the Commission was not mistaken concerning the fact that the Respondent had filed these returns, nor did the Commission believe that the Respondent stated that it had not filed these returns. The fact that the Respondent had indeed filed the returns was believed by the Commission and considered in the Commissionís decision to revoke the Respondentís sales tax license. Again, the Respondent is merely trying to reargue those arguments already presented and considered by the Commission before issuing its Order of Revocation.
4. As to the Respondentís request for a hearing on this matter, Item 3 of the Stipulation provides that ď[t]he Licensees, by entering this Stipulation, knowingly waive all rights to an administrative hearing before the Commission.Ē Furthermore, under Item 6, the decision to hold a hearing on the issue or to decide the matter based on the Petitionerís affidavit and the Respondentís responses is at the sole discretion of the Commission. For this reason and because the Commission was not mistaken concerning a fact on which it based its decision to revoke the Respondentís sales tax license, the Commission denies the Respondentís Request for Reconsideration and Second Request for Hearing.
Utah Administrative Rule R861-1A-29 provides that a Petition for Reconsideration "will allege as grounds for reconsideration either a mistake in law or fact, or the discovery of new evidence" that could not, with due diligence, have been discovered and produced at trial. Under this rule, the Tax Commission may exercise its discretion in granting or denying a Petition for Reconsideration.
DECISION AND ORDER
Based on the foregoing, the Tax Commission sees no ďmistake in law or fact, or the discovery of new evidenceĒ as set forth by Utah Administrative Rule R861-1A-29 upon which to grant the request for reconsideration. Nor does the Commission grant the Petitionerís request for a second hearing. Therefore, the Respondentís Request for Reconsideration and Second Request for Hearing are denied. It is so ordered.
BY ORDER OF THE UTAH STATE TAX COMMISSION:
DATED this 16th day of August , 2004.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson