85-0008 SALES
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In the Matter:
: DECISION FROM
SALES TAX
XXXXX ) LICENSE REVOCATION HEARING
XXXXX. :
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.
THEREFORE IT IS HEREBY DECIDED:
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.
BY ORDER OF THE UTAH STATE TAX COMMISSION
Mark K.
Buchi Gary
C. Cornia
Chairman Commissioner
G. Ellsworth
Brunson Marthe
F. Dyner
Commissioner Commissioner