BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX, )
:
Petitioner, )
: DECISION
FROM
v. ) INFORMAL HEARING
:
AUDIT DIVISION
OF THE )
UTAH STATE TAX
COMMISSION, : Appeal No. 85-0112
)
Respondent. :
_____________________________________
STATEMENT OF CASE
An
Informal Hearing was held on XXXXX.
Commissioner XXXXX heard the matter for the Commission. Petitioners were represented by XXXXX, XXXXX
and XXXXX. The Respondent was
represented by XXXXX, Assistant Attorney General for the state of Utah, XXXXX
and XXXXX.
The
Petitioners were purchasing sawdust and selling this product to XXXXX to be
used in well drilling operations. The
product was delivered directly to the driller under contract to XXXXX, but it
was invoiced to and paid for by XXXXX.
The sawdust was purchased from several local distributors and no sales
tax was paid on that purchase nor was it collected on the sale to XXXXX.
Petitioners
argued that they considered themselves a wholesaling operation, and therefore,
did not collect or pay a sales tax on their transactions. Petitioners did acquire a sales tax license,
but have not filed a sales tax return or paid any sales tax. The Petitioners did not require a sales tax
exemption number or verification from XXXXX of their wholesale status. The Petitioner argued that the purchase and
sale of the sawdust is exempt from taxation because of the agricultural
exemption in the Utah Code. The Petitioner
further argued that the statute of limitations should apply and bar the
determination of the Respondent.
The
Respondent presented evidence that sawdust does not qualify for an agriculture
exemption because it was not produced by the Petitioner. Further evidence was presented that the sale
of sawdust was not a wholesale sale because Petitioner did not bear his burden
of proof to show a valid exemption certificate or a statement from XXXXX to
substantiate that the transaction was an exempt one. The Respondent argued that the statute of limitations had not yet
started to run where there is a failure to file a sales tax return.
DECISION AND ORDER
The
Tax Commission, after reviewing the file and the evidence presented at the
Informal Hearing and the recommendation of the Hearing Officer, finds that
1.
The Petitioner is not a producer of the sawdust who is therefore entitled to
the agricultural product exemption (Utah State Tax Commission Regulation S-39).
2.
XXXXX did not hold a wholesaler license.
The Petitioner did not present a valid exemption certificate or
statement from XXXXX to substantiate that the sales to XXXXX was a wholesale
transaction (Utah State Tax Commission Rule S-23(2-e).)
3.
The statute of limitations begins to run when the Petitioner files a sales tax
return. Since no return was filed in
this matter, the statute of limitations has not yet commenced to run, and
therefore, the argument that the statute of limitations has run does not apply.
4.
The Petitioners failed to shift the burden of proof to the Respondent.
ORDER
Based
upon the foregoing, it is hereby ordered that Petitioner's request for
redetermination be dismissed.
DATED
this 26 day of December, 1985.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
Mark K.
Buchi Gary
C. Cornia
Chairman Commissioner
R. H. Hansen Roger
O. Tew
Commissioner Commissioner