BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX,
:
Petitioner, )
: DECISION
OF
v. ) INFORMAL HEARING
:
COLLECTION
DIVISION OF THE )
STATE TAX
COMMISSION OF UTAH, : Appeal No. 86-0122
) Account
No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
An
Informal Hearing was scheduled for August 21, 1986. Petitioner notified the Appeals Section of the Utah State Tax
Commission that it desired a waiver of its right to an oral hearing in the
above matter, and that it would prefer a decision based on the written materials
in the file.
Due
to clerical oversight, Petitioner's sales, use, and resort community tax
prepayment return was not filed until XXXXX, although it was due on XXXXX. Respondent assessed a 10% penalty of $$$$$.
Petitioner disputed the assessment of the penalty because a change in personnel
resulted in clerical oversight of the prepayment return being filed, and
because Petitioner had never before filed untimely.
Respondent
concedes that Petitioner has an excellent filing history. Petitioner has not paid the penalty, but
requests that the interest charges be abated as of XXXXX, based on a
conversation Petitioner's representative had with XXXXX, in which XXXXX
purportedly indicated to the Petitioner that interest would be abated as of
that date. Petitioner subsequently paid $$$$$ to the Tax Commission
representing interest up to XXXXX.
FINDINGS
1. Utah Code Ann. § 59-15-5.1(3) (1953) provides for a penalty of 10% of the total
amount of the prepayment due if the taxpayer fails to timely file a prepayment
return.
2. When a taxpayer makes a late payment, the
amount of the payment is applied first to penalty, then to interest, and last
to principal. If the taxpayer does not
pay an amount representing the amount of the penalty assessment, interest will
continue to accrue until that amount is paid because that amount actually
represents part or all of the principal tax liability. In order to abate the accrual of interest,
the taxpayer must pay the amount representing the amount of the penalty
assessment, and then petition for a waiver of the penalty if appropriate.
3. The Commission finds that while Petitioner
did not intend to evade its sales and use tax liability, it was negligent in
failing to pay its sales, use, and resort community tax liability on time. Therefore, the penalty was properly
assessed.
DECISION AND ORDER
Based
on the foregoing facts and the written evidence, it is the Decision and Order
of the Utah State Tax Commission that the penalty assessment be sustained. Interest is ordered to accrue until the
penalty is paid.
DATED
this 7 day of October, 1986.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco G.
Blaine Davis *
Commissioner Commissioner