BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX,
Petitioner, :
v. : INFORMAL DECISION
:
COLLECTION
DIVISION OF THE : Appeal No. 86 1817
STATE TAX
COMMISSION OF UTAH, ) Acct. No. 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 to assess penalty and interest on
sales and use tax account No. XXXXX for a transaction during XXXXX. An Informal Hearing was held on XXXXX, in
the offices of the Utah State Tax Commission.
James E. Harward, Hearing Officer, heard the matter for the
Commission. XXXXX represented
himself. XXXXX represented the
Respondent.
On
XXXXX, Petitioner purchased a used XXXXX from XXXXX. Petitioner signed the sales invoice, claiming the "machine
to be used at above address [XXXXX] specifically for farm and produce
production." Because Petitioner
claimed an agricultural exemption, Petitioner did not pay sales tax on the
purchase of the XXXXX.
Respondent
determined that Petitioner was not entitled to the agricultural exemption, and
assessed a tax of $$$$$, a 100% fraud penalty of $$$$$, and interest of $$$$$
as of XXXXX. Petitioner requested a
waiver of the 100% civil fraud penalty.
FINDINGS
Petitioner
did not use the XXXXX "primarily and directly in farming
operations...." See, Utah Code
Ann. §59-15-6(3) (1953), which sets forth the exemptions from Utah sales tax. Although the XXXXX may have been used
initially to clear Petitioner's property in XXXXX County, the XXXXX was
primarily used for Petitioner's excavating business. Therefore, the XXXXX does not qualify for an agricultural
exemption.
Petitioner
is not the first to rely, to his detriment, upon representations by XXXXX that
sales tax may be avoided if an agricultural exemption is claimed. Petitioner was negligent in relying on the
assertions of XXXXX. Petitioner should
have checked to see if the agricultural exemption would apply in his case
before claiming exemption on the invoice.
Petitioner is subject to a 10% negligence penalty pursuant to Utah Code
Ann. §59-15-8 (1953). However,
Petitioner's actions do not rise to the level of fraud since he relied upon the
assertions of XXXXX and since XXXXX has made the same representations to others
as part of its sales pitch.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that the penalty in
this matter shall be reduced from the 100% fraud penalty to the 10% negligence
penalty.
The
Collection Division of the Utah State Tax Commission is ordered to adjust its
records with this decision.
DATED
this 11 day of March, 1987.
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