BEFORE THE STATE TAX COMMISSION OF UTAH
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
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.
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
Joe B. Pacheco G. Blaine Davis