86-1823 - Sales

 

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX,

            Petitioner,                                                         :

v.                                                                                 :           INFORMAL DECISION

                                                                                    :

AUDITING DIVISION OF THE                                :           Appeal No. 86 1823

STATE TAX COMMISSION OF UTAH,                  )           Account No. XXXXX

                                                                                    :           Audit Period XXXXX

            Respondent.                                                     :           thru XXXXX

_____________________________________

STATEMENT OF CASE

            This is an appeal to the Utah State Tax Commission from an amended audit report prepared by the Auditing Division of the Utah State Tax Commission (Respondent) on 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, CPA, and XXXXX represented the Petitioner.  XXXXX and XXXXX represented the Respondent.

            Petitioner acknowledged that the tax portion of the amended audit report was correct but appeals the 10% penalty and stated that there were extenuating circumstances.  Prior to starting the filter rebuilding business, Petitioner was in the meat business.  Petitioner was told that he did not need to collect tax on meat which customers brought in to have cut.  Petitioner saw similarities between this business and the filter business.  Customers brought in their own filters to be rebuilt.  Petitioner was further advised by the auditor of the company that it was okay not to charge the tax.  Petitioner was told by several clients that other companies did charge tax but Petitioner assumed that this was because the other companies sold new filters while Petitioner rebuilt filters.  Petitioner started collecting the tax on its own initiative.

            Respondent noted that Petitioner had a duty to learn of the law when he set up the filter rebuilding business and stated that it is not the job of the Tax Commission to seek out and teach taxpayers.  Respondent noted that Petitioner started filing returns in XXXXX, filed and paid three quarters in XXXXX, but stopped paying the tax for the fourth quarter of XXXXX, and the first quarter of XXXXX.

DECISION AND ORDER

            Based on the foregoing, it is the Decision and Order of the Utah State Tax Commission to deny Petitioner's Petition for Redetermination.

            The amended audit report of the Auditing Division of the Utah State Tax Commission, as prepared on XXXXX, is hereby affirmed.

            DATED this 11 day of December, 1987.

BY ORDER OF THE STATE TAX COMMISSION OF UTAH.

ABSENT

R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco                                                            G. Blaine Davis

Commissioner   Commissioner