BEFORE THE STATE TAX COMMISSION OF UTAH
XXXXX : ORDER ON MOTION TO
) RECONSIDER AN INFORMAL
Petitioner : DECISION
v. : Appeal No. 85-0094
AUDITING DIVISION OF THE :
UTAH STATE TAX COMMISSION )
STATEMENT OF CASE
An Informal Decision was rendered on XXXXX. Thereafter, the Petitioner appealed the Decision to a Formal Hearing. However, the only issue which was appealed was the penalty and interest which had been assessed by the Auditing Division and which was affirmed by the Informal Decision. A Formal Hearing was held on XXXXX. James E. Harward, Hearing Officer and Joe B. Pacheco, Commissioner, heard the matter for the Tax Commission. Petitioner was represented by XXXXX and XXXXX. Respondent was represented by XXXXX and XXXXX. At the outset it was determined that the petition should be considered a motion to reconsider upon the penalty and interest rather than treating the matter as a Formal Hearing. Therefore, on motion of the Hearing Officer, and not objection being raised by either Petitioner or Respondent, the matter was converted to a Motion for Reconsideration of the Decision of the Informal Hearing. Thereafter, testimony and evidence was taken on the issue of penalty and interest.
Evidence was presented that XXXXX acted in good faith in the issue of collecting sales tax from farmers for the purchases of certain items of equipment. Further evidence was presented that the exemption itself was unclear and confusing. The Respondent recommended that the penalty be waived because of the gray area of the law and the good faith efforts of the Petitioner to take care of the matter once it was called to his attention.
The Petitioner further argued that since he did not collect the sales tax, he didn't have the use of the money and therefore, should not be required to pay interest on money which was not collected.
As final matter, the Petitioner requested that the Auditing Division assist the Petitioner in the collection of the sales tax from the farmers who did not pay the sales tax.
DECISION AND ORDER
Based upon the foregoing facts, it's the Tax Commission's Decision and Order that the penalty assessed against the Petitioner be waived on the grounds that the matters was, in fact, one of dispute and the Petitioner acted in good faith in pursuing the matter as he did. The Tax Commission is also persuaded that since the Petitioner did not, in fact, collect the sales tax, he did not have the use of the money and therefore, the interest will also be waived.
The Tax Commission also directs the Auditing Division to assist the Petitioner in the collection of the tax from farmers to the extent of giving information and corroborating the proceedings to date of the Petitioner. However, the Auditing Division is not to actively participate in the collection process or to be the collector.
DATED this 12 day of March, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
Mark K. Buchi Joe B. Pacheco
R. H. Hansen Roger O. Tew