BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 86 0357
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
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 sales and use tax account No. XXXXX. 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.
On or about XXXXX, Petitioner purchased a mobile concrete pump from XXXXX of XXXXX, Utah. Petitioner stated that the sales representative of XXXXX told the Petitioner that the Utah State Legislature recently repealed the sales tax law as it applied to major pieces of construction equipment and that no sales tax would apply to the purchase of the mobile concrete pump.
Sales and use tax auditors from the Tax Commission determined that sales taxes were due on the purchase of the mobile concrete pump. The position of the sales and use tax auditors was that since the invoice to Petitioner stated "F.O.B. XXXXX, Minnesota", XXXXX was not responsible to collect and remit the taxes. Petitioner was responsible for the taxes. Respondent assessed a penalty of $$$$$ and interest of $$$$$ on the purchase of the concrete pump.
Petitioner stated that the sales taxes due should have been collected and remitted by XXXXX. Petitioner has paid the tax but requests a waiver of the penalty and interest.
XXXXX was a vendor of mobile concrete pumps pursuant to Utah Code Ann. § 59-15-5(3)(1953). XXXXX had or utilized "an office, distribution house, sales house, warehouse, service enterprise, or other place of business" in XXXXX, Utah at the time of the sale of the mobile concrete pump to Petitioner. As a vendor, XXXXX was responsible for the collection of the amount of the tax imposed on the mobile concrete pump sale. See, Section 59-15-5(1).
The sale of the mobile concrete pump did not occur outside of Utah even though the invoice stated "F.O.B. XXXXX, Minnesota." Petitioner presented a copy of the final invoice from XXXXX illustrating that XXXXX and not XXXXX (the manufacturer) billed Petitioner for the pump. Petitioner also presented copies of the checks with which Petitioner purchased the pump. The checks were made to the order of XXXXX of XXXXX, Utah, and were deposited by XXXXX in XXXXX of XXXXX, Utah. Finally, Petitioner presented a copy of the certificate of origin for the mobile concrete pump. Assignment No. 1 was from XXXXX to XXXXX of XXXXX, Minnesota. Assignment No. 2 was from XXXXX to XXXXX of XXXXX, Utah. Assignment No. 3 was from XXXXX to XXXXX of XXXXX, Utah.
Petitioner sent his operator to Minnesota to pick up the mobile concrete pump based on the recommendation of both manufacturer and the vendor that the operator travel to the factory to attend the "new owner orientation program." The operator was taught the operation and maintenance of the pumping unit in Minnesota.
Once Petitioner brought the mobile pumping unit into Utah, Petitioner immediately went to the Tax Commission to obtain a license and fuel permits. The mobile concrete pump was classified as "Special Mobile Equipment" pursuant to Section 41-1-l(n) and was exempted from registration. Petitioner did not attempt to conceal the purchase of the mobile concrete pump.
Petitioner was required to pay the sales tax on the purchase of the pump and has done so. However, XXXXX (the vendor) and not Petitioner was responsible for the collection of the sales tax. Therefore, Petitioner may not be assessed penalty and interest for failure to collect and remit sales tax.
DECISION AND ORDER
It is the Decision and Order of the Utah State Tax Commission that Petitioner's request for waiver of penalty and interest on sales and use tax account No. XXXXX be granted.
The Collection Division of the Utah State Tax Commission is hereby ordered to adjust its records in accordance with this decision.
DATED this 1 day of December, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis