86 0617 &
86 0351
Motor Fuel
Signed 12/12/86
BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0617
STATE TAX
COMMISSION OF UTAH, ) and 86 0351
: Acct. No. XXXXX
) and XXXXX
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 penalty and interest on oil and gas
occupation tax account No. XXXXX for the XXXXX annual occupation tax return and
for the XXXXX first and second quarter occupation tax returns. This is also an appeal from a decision of
Respondent to assess penalty and interest on withholding royalties oil and gas
tax account No. XXXXX. The
circumstances giving rise to the late payment of both types of taxes are the
same so both appeals will be addressed in one decision.
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
Commission. XXXXX and XXXXX represented
the Petitioner. XXXXX and XXXXX
represented the Respondent.
XXXXX purchased 55% of XXXXX in
XXXXX. In XXXXX, XXXXX assumed
operation of both the XXXXX and XXXXX fields which XXXXX had previously
operated. Petitioner stated that revenues
were not paid to XXXXX until XXXXX. Petitioner assumed that since revenues were
being sent to XXXXX prior to XXXXX, that XXXXX was handling the taxes. During this time XXXXX was moving its office
to Canada and communications between XXXXX and XXXXX were less than ideal.
Petitioner stated that it received the
first notice of delinquent taxes ten months after it assumed operation of the
XXXXX and XXXXX fields. Petitioner immediately took steps to remedy the problem
and has been very cooperative.
FINDINGS
Petitioner is liable for the taxes
since Petitioner assumed operation of both the XXXXX and XXXXX fields in
XXXXX. Petitioner was negligent in
assuming that because XXXXX continued to receive revenues, XXXXX would still
pay the taxes. Although there may have
been confusion and delays in the transfer of information from XXXXX to
XXXXX this is not an unforeseeable
event when one company takes over operation from another. Petitioner should have made arrangements
with XXXXX concerning the responsibility for payment of taxes in order to avoid
the mix‑up that occurred.
DECISION AND
ORDER
It is the Decision and Order of the
Utah State Tax Commission that Petitioner's request for waiver of penalty on
oil and gas occupation tax account No. XXXXX and withholding royalties oil and
gas tax account No. XXXXX be denied.
The assessment of penalty and interest
by the Collection Division of the Utah State Tax Commission is hereby affirmed.
DATED this 12 day of November, 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
NOTICE: You
have 30 days after the date on the Mailing Certificate to request a Formal
Hearing.
^^