BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
:
Petitioner, ) FINDINGS OF FACTS,
: CONCLUSION
OF LAW
v. ) AND FINAL DECISION
:
)
AUDITING
DIVISION OF THE : Appeal No. 86 0180
UTAH STATE TAX
COMMISSION, ) audit period XXXXX through
: XXXXX
Respondent. )
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for formal proceedings
pursuant to stipulation of the parties, the hearing was waived and the matter
submitted on briefs.
For
a period beginning XXXXX through XXXXX, the Respondent assessed an audit
deficiency against the Petitioner in the sum of $$$$$ plus interest. This sum represented sales tax on some $$$$$
of sales to XXXXX or XXXXX. XXXXX
represented to the Petitioners that the items purchased were for resale and
therefore exempt from sales tax. XXXXX
was purchasing beds, couches, lamps, and other furniture items to be used on
the XXXXX project.
The
Tax Commission makes its
FINDINGS OF FACTS
1. Petitioner is a retail outlet of furniture
located in the State of Utah.
2. Petitioner provided to XXXXX, XXXXX, or
XXXXX approximately $$$$$ of furniture to furnish condominiums at the XXXXX
project.
3. The Petitioners were told by XXXXX that the
furniture was for resale. Therefore,
the receipts indicated in the sales tax column that the items were for resale
and that tax was not collected.
4. No exemption certificates or other further
evidence of resale was collected by the Petitioners.
5. XXXXX has refused to provide exemption
certificates or sales tax numbers to the Petitioner.
6. The furniture packages were placed in the
condominiums. The condominiums were
then sold without designation as to real or personal property.
7. No sale tax was collected on the sales of
the furniture.
CONCLUSIONS OF LAW
1. Tax Commission Rule A12-02-S23 requires that
taxpayer tangible personal property or services to exempt customers is required
to keep records verifying the non-taxable status of such sales. Records shall include (1) such invoice
showing the name and identity of the customer, and (2) exemption certificate
for exempt sales of tangible personal property.
2. The burden of proving that a sale is for
resale or otherwise exempt is upon the person who makes the sale. Rule S23.
3. Utah Code Ann. § 59-15-5 (2) provides that where a wholesaler makes a sale to a
retailer who represents that it is for resale, then the wholesaler is not
required to collect sales tax.
FINAL DECISION
Based
upon the foregoing findings of facts and conclusions of law, the Tax Commission
has no alternative but to deny the request of the Petitioner from the assessment
of the taxes. The Tax Commission is not
persuaded that the Petitioner has met its burden of proof to show that the sale
is for resale or otherwise exempt. The
burden of proof would require a showing of an exemption certificate or actual
resale of the items in question where a taxable transaction takes place. In the facts before the Commission it
appears that the furniture is placed in a condominium unit. The condominium unit is then sold as a lump
sum without any designation between real and personal property. In that transaction no sales tax is
collected on the transaction. Therefore
the sale from XXXXX to either XXXXX or XXXXX is a sale upon which sales tax should
have been collected and was not.
However, the Tax Commission is basing its decision on the failure of the
Petitioner to submit sufficient acceptable evidence that would indicate that
the furniture was actually purchased for resale on a retail taxable basis. Therefore, the deficiency is affirmed.
DATED
this 22 day of September, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner