85-0008 SALES






In the Matter:




Taxpayer ) Appeal No. 85-54-0008



This is a decision from a hearing regarding the sales tax license revocation of XXXXX. (hereinafter referred to as "Taxpayer"), requested by the Collections Division of the Utah State Tax Commission (hereinafter referred to as "Claimant").

The sales tax license revocation hearing was held on XXXXX, at the hour of 2:30 p.m. in the offices of the Utah State Tax Commission. XXXXX, Hearing Officer, heard the matter for the Utah State Tax Commission. XXXXX appeared on behalf of and representing the Taxpayer. XXXXX, Compliance Agent, appeared and presented the arguments for the Claimant.

After reviewing the evidence presented and the written documentation submitted, the Commission makes the following determinations:

1. Taxpayer was issued a sales tax license, No. XXXXX, on XXXXX. Such a license is valid until the vendor "ceases to do business, changes his business address, or until (the license is) revoked by the State Tax Commission." Utah Code Ann. 59-15-3 (1953, as amended).

2. Taxpayer was responsible for the collection of sales taxes on the sale of his goods and services, Utah Code Ann. 59-15-5(1) (1953, as amended). Taxpayer was required to hold the sales taxes in "escrow" for the Utah State Tax Commission (although a separate account was not required), and was required to remit these taxes to the State Tax Commission. Utah Code Ann. 59-15-5(4) (1953, as amended). The sales taxes collected were expressly not to be used for profits, operating expenses, or any other use pertaining to the business of Taxpayer. Taxpayer was "deemed to be a person charged with the receipt, safekeeping, and transfer of public moneys". Utah Code Ann. 59-15-5(1) (1953, as amended).

Sales taxes are an addition to the price of a good or service over and above the profit margin that a vendor has established. These taxes do not alter the profits. If the Taxpayer had not included the sales tax collected in its profit margin, it would not have had any difficulty remitting the sales tax, regardless of how much or how little was sold during the quarter.

3. The sales tax collected are "due and payable to the State Tax Commission quarterly on or before the thirtieth day of the month next succeeding each calendar quarterly period . . ." Utah Code Ann. 59-15-5(4) (1953, as amended).

4. The Utah State Tax Commission is vested with the authority to revoke the license of "any person violating any provision of this (Sales Tax) Act . . ." Utah Code Ann. 59-15-5 (1953, as amended). The only requirements are that the Taxpayer must be given reasonable notice and a hearing prior to the revocation Id. See supra page 1 for information regarding the hearing. In addition Claimant, through XXXXX, Compliance Agent via telephone and letters, has repeatedly mentioned the possibility and imminence of revocation to the Taxpayer if the taxes remained delinquent.

5. The Taxpayer operates two facilities, one in Murray, Utah and the other in Ogden, Utah. The Taxpayer is presently attempting to sell the operation in Ogden, Utah.

6. The business was previously owned and operated by two corporations: 1) XXXXX, dba XXXXX at XXXXX, Murray, Utah (License No. XXXXX) and 2) XXXXX, , dba XXXXX at XXXXX, Ogden, Utah (License No. XXXXX). In XXXXX, XXXXX purchased XXXXX. In XXXXX, XXXXX purchased XXXXX. The officers of these corporations after the purchase by XXXXX were as follows: XXXXX, President; XXXXX (son), Vice-President; and XXXXX (wife), Secretary/Treasurer. From XXXXX to XXXXX, these corporations accrued a sales tax delinquency liability of approximately $$$$$$.

In November of XXXXX, the two corporations filed a petition in the United States Bankruptcy Court, District of Utah requesting relief under Chapter 11 of the United States Bankruptcy Code. (This petition was amended to a Chapter 7 in XXXXX).

In XXXXX, XXXXX purchased the assets of those two corporations, with the approval of the United States Bankruptcy Court, for $$$$$. In XXXXX, XXXXX formed a new corporation, XXXXX, Inc. The officers are as follows: XXXXX, President; XXXXX (son), Vice-President; and XXXXX (wife), Secretary/Treasurer. The Taxpayer was issued sales tax license No. XXXXX. The Taxpayer failed to satisfactorily timely remit the sales taxes accrued for the 3rd quarter of XXXXX in the amount of $$$$$.

7. On XXXXX, the Taxpayer and the Collection and Compliance Division entered into an Agreement, a copy of which is attached and the pertinent part of which is as follows:

a. A cashier's check (XXXXX) was received by the Claimant on XXXXX, in the amount of $$$$$ as payment for the delinquent sales tax periods XXXXX - XXXXX and XXXXX - XXXXX.

b. A bond of $$$$$ shall be posted within 120 days of the date of the Preliminary Agreement (XXXXX) for continued operation.

1) $$$$$ shall be deposited in a trust account with XXXXX, Murray Branch.

2) Stated bond amount to be deposited in four (4) equal deposits of $$$$$ each for XXXXX, XXXXX, XXXXX, and XXXXX.

c. A savings trust account shall be established for current Sales and Withholding Taxes, which amounts are to be deposited weekly into that account.

d. All delinquent withholding taxes shall be to date by XXXXX and kept current thereafter.

e. All Sales and Withholding taxes shall be paid by cashier's check during the bond period.


The Commission revokes Taxpayer's sales tax license effective the date of this agreement, but stays the execution of the revocation indefinitely unless taxpayer fails to carry out its duties under the attached agreement.

Dated this 16th day of May, 1985.


Mark K. Buchi Gary C. Cornia

Chairman Commissioner

G. Ellsworth Brunson Marthe F. Dyner

Commissioner Commissioner