BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
AUDITING
DIVISION OF THE : Appeal No. 86 0172
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
An
Informal Hearing was held on XXXXX.
James E. Harward, Hearing Officer, heard the matter for the Utah State
Tax Commission. XXXXX and XXXXX, Deputy
XXXXX County Attorneys, represented the Petitioner. XXXXX, Assistant Attorney General. XXXXX and XXXXX represented Respondent.
Petitioner
is an organization contracted by XXXXX County to operate XXXXX County's solid
waste disposal facility. The facility
is operated as a service to county residents and no profit is realized from its
operation. Respondent assessed a sales and use tax on equipment purchased from
XXXXX to XXXXX. Petitioner argued that
it did not purchase the equipment, and that XXXXX County purchased equipment
for government proprietary functions; therefore, the purchases should be exempt
from sales tax. Since the time Petitioner's
Petition for Redetermination was filed, Petitioner and Respondent have settled
the matter with Petitioner paying the sales tax. The only issue left to be determined is whether Petitioner should
be required to pay penalty and interest.
At
the hearing Petitioner argued that the waste disposal facility was operated by
Petitioner and that equipment used in running the operation was bought by XXXXX
County or by Petitioner. The
understanding between Petitioner and XXXXX County, however, was that all of the
equipment was owned by the county.
Petitioners and XXXXX County's agreement required XXXXX County to pay
any tax bills. If the transactions had
been handled properly, no tax would ever had been assessed because XXXXX
County's purchase of equipment would have been sales tax exempt. Petitioner argued that the penalty and
interest should be waived because XXXXX County and Petitioner had a
government-agency relationship. In other words, when Petitioner purchased
equipment for the solid waste disposal facility, it did so as XXXXX County's
agent.
Respondent
also recommended waiver of the penalty and interest, arguing that XXXXX County
(the party in the contractual agreement between XXXXX County and Petitioner
that was required to pay any tax bills) did not have use of the money that was
ultimately paid to Respondent.
DECISION AND ORDER
Based
on the foregoing, it is the Decision and Order of the Utah State Tax Commission
to grant Petitioner's request for waiver of penalty and interest. By this decision
the Tax Commission recognizes that Petitioner and XXXXX County acted not with
negligence nor intentional disregard of the law, but operated under the belief
that if Petitioner purchased equipment whose ownership would be in XXXXX
County, the purchase would be sales tax exempt because it would be the same as
a purchase of equipment by XXXXX County.
Respondent
is therefore ordered to adjust its records to reflect the decision of the
Commission to waive all penalties and interest in this matter.
DATED
this 1 day of September, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner