86-0105 - Motor Fuel

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX,

Petitioner, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. ) AND FINAL DECISION

:

)

COLLECTION DIVISION OF THE : No. 86-0105

STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX

:

Respondent. )

_____________________________________

STATEMENT OF CASE

Pursuant to the stipulation entered at the pre-hearing conference this decision is made without oral argument and based upon the documentation and evidence submitted and made part of the file.

Therefore based upon that representation and understanding, the Tax Commission makes its

FINDINGS OF FACTS

1. In XXXXX XXXXX purchased all the oil and gas produced by XXXXX. As part of the purchase, XXXXX prepared and filed the Occupation Conservation and Mineral Production Withholding tax returns, and paid the required taxes and royalty payments to the owners on the oil and gas produced by the wells of which XXXXX was the operator.

2. In the spring of XXXXX, XXXXX closed its operation in the XXXXX and disposed of its interest in the oil and gas properties XXXXX advised XXXXX that it would no longer retain its rights to purchase crude oil and gas and thus would no longer act as disperser for XXXXX and the other owners. As a result, XXXXX would no longer be responsible for the collection, filing, and payment of taxes.

3. The Petitioner, thereafter, purchased a system in April to automate its accounting system for the purposes of accounting, filing, and paying taxes. Although purchased in April it was not operational until September of XXXXX. In addition, Petitioner hired a law firm to educate employees on Utah taxes.

4. On March 15, XXXXX, the occupation taxes in the sum of $$$$$ were paid for the XXXXX year.

5. The Tax Commission assessed a penalty of $$$$$ on the XXXXX fourth quarter occupational tax return claiming that the tax had not been paid timely. That penalty has been paid by Petitioner and 2 request for the waiver and refund of the same as been made by the Petitioner.

CONCLUSIONS OF LAW

1. Utah Code Ann. 59-5-67 provides for an occupation tax to be imposed upon the Petitioner. Utah Code Ann. 59-5-71 provides that tax must be filed and paid on or before June 1 of the year next succeeding the calendar year.

2. The only exception to the filing provisions of 59-5-71 is (2)(a) which requires the quarterly filings be made where the preceding calendar year was $$$$$ or more in tax obligation.

3. Petitioner did not have a tax obligation for the tax year XXXXX. XXXXX had the obligation.

4. Petitioner timely filed within the provisions of the Utah Code. Therefore penalty was not properly assessed.

5. Petitioner's request is for waiver of penalty and interest as it relates to these periods and is not a petition for redetermination of the tax due. Therefore, the Commission declines to consider any overpayment of tax due to striper or exempt wells.

FINAL DECISION AND ORDER

Therefore, based upon the foregoing, it is the Final Decision and Order of the Utah State Tax Commission that all tax penalties associated with the XXXXX occupation tax plus interest be waived. It is so ordered.

DATED this 4 day of February, 1988.

BY ORDER OF THE STATE TAX COMMISSION OF UTAH.

ABSENT

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner