BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE ) Appeal No. 87-0223
UTAH STATE TAX COMMISSION, ) Acct. No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for an Informal Hearing on XXXXX. James E. Harward, Hearing Officer, heard the matter for the Tax Commission. XXXXX was present and XXXXX appeared representing the Respondent. The Petitioner has been assessed pursuant to Utah Code Ann. §59-2-1321(3) a penalty. The Petitioner contested the assessment of said penalty on the grounds that at the time during the audit period the corporation and the Petitioner were under the impression that the corporation was a nonprofit corporation which was not obligated for the payment of sales tax on items of personal property used or consumed by the tax exempt corporation. The Petitioner did indicate that he was the person responsible for signing and paying the sales tax and returns and the day to day operation of the business.
DECISION AND ORDER
The Tax Commission makes its decision based upon the following facts:
1. Petitioner was charged with responsibility with the day to day operation of the business.
2. Petitioner was under the impression that no sales tax need be paid on the items consumed or used by the Petitioner or by the nonprofit corporation.
3. Not being aware that the sales tax needed to paid the Petitioner did not make a conscious or intentional decision to prefer other creditors over the payment of the sales tax.
4. Petitioner's conduct or impression may be at best negligence, however, it does not rise to the level of being reckless or intentional disregard of obvious or known risks.
5. After being told of the audit and the need to pay sales tax the Petitioner was no longer in a position to investigate the problem in that the business was in the process of being sold.
6. The Petitioner may have used some funds from the operation of the business to pay personal obligations; however, no evidence has been produced which would indicate that those funds were tax money.
7. Therefore, the Tax Commission declines to affirm
the penalty assessment under Utah Code Ann. §59-2-1321(3).
DATED this 2 day of February, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis