BEFORE THE STATE
TAX COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0318
STATE TAX
COMMISSION OF UTAH, )
:
Respondent. )
_____________________________________
STATEMENT OF
CASE
This is an appeal to the Utah State Tax Commission
from a decision of the Collection Division of the Utah State Tax Commission
(Respondent) to assess a $$$$$ per pack penalty on eighteen packages of
unstamped cigarettes confiscated from XXXXX (Petitioner).
An Informal Hearing was held on XXXXX, in the offices
of the Utah State Tax Commission. David
J. Angerhofer, Hearing Officer, heard the matter for the Tax Commission. XXXXX, of XXXXX, and XXXXX represented the
Petitioner.
Petitioner does not dispute that the eighteen
packages of cigarettes which Respondent confiscated were unstamped. Petitioner bases his petition on 3 grounds:
1.
Petitioner's first point is that there is no effective way for
Petitioner to tell if the cigarettes have been properly stamped. Most cigarettes are sold in the carton, and
the customers require sealed cartons.
The only way to check the cartons for stamps would be to pinch the
corners of the carton and look inside.
Since Petitioner sells approximately 1,500 cartons per week, the
checking process would be tedious and slow.
2.
Petitioner's second point is that he has already paid the appropriate
cigarette tax. The distributor of the
cigarettes assesses the cigarette tax to Petitioner at the time of
purchase. The tax assessment is based
on the number of cigarettes sold to Petitioner and not on the number of tax
stamps placed on cigarettes.
3.
Petitioner's third point is that the statutes provide for a more
effective procedure to collect the penalty.
Section 59-18-4 permits the tax to be collected from the manufacturer,
jobber, distributor, wholesaler, retailer or consumer. Petitioner stated that it would be more
efficient for enforcement purposes if the distributors were inspected rather
than the retailers. Since the distributors
open the cartons to affix the stamps, this would be the most logical point at
which to determine if the stamps have been properly affixed.
Respondent confiscated ten packs of XXXXX, two packs
of XXXXX, and six packs of XXXXX.
Respondent assessed a penalty of $$$$$ per pack for a total penalty of
$$$$$.
FINDINGS
The $$$$$ per pack penalty was properly assessed by
Respondent pursuant to Utah Code Ann. § 59-18-5 (1953).
Petitioner has a duty to make certain that the stamp
has been properly fixed on each package of cigarettes before the Petitioner
offers a package for sale. Petitioner
could have simply and quickly verified whether the packages in question had
been properly stamped. Petitioner was
negligent in not checking for the stamps.
The $$$$$ per pack is properly assessed pursuant to Utah Code Ann. §
59-18-5.
DECISION AND
ORDER
It is the Decision and Order of the Utah State Tax
Commission that the penalty assessed against XXXXX be sustained.
DATED this 17 day of October, 1986.
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