BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, :
v. : INFORMAL DECISION
AUDITING
DIVISION OF THE : Appeal No. 87-0979
UTAH STATE TAX COMMISSION, : Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission XXXXX. An informal hearing was
held in response to Petitioner's Petition for Redetermination made after
receiving a statutory Notice of Deficiency and Amended Audit Report issued by
the Commission for the sales tax audit period XXXXX. James E. Harward, Hearing Officer, heard the matter for and in
behalf of the Commission. XXXXX
represented Petitioner. XXXXX
represented Respondent. Petitioner was
unable to produce tax exempt certificates for many sales transactions which
took place during the three year audit period.
However, Petitioner did produce evidence data gathered from one of three
stores involved and treated as representative of all stores suggesting that 98%
of the sales in question were tax exempt. Petitioner also presented evidence
that it has closed its business doors and has no assets, no employees, and no
way of producing the tax exempt certificates.
Respondent directed attention to Utah Administrative Rule 865-23S-1(A)
and (E) which stipulate the following:
A.
Taxpayers selling tangible personal property. . . to exempt customers are
required to keep records verifying the non-taxable status of the sales. . . .
E.
The burden of proving that a sale is. . . exempt is upon the person who makes the
sales. If any agent of the Tax
Commission requests. . . a valid exemption certificate or other similar
acceptable evidence to support the vendor's claim that a sale is. . . exempt,
and the vendor is unable to comply, the sale will be considered taxable.
FINDINGS
The
Commission has determined that exemption numbers alone are not sufficient
evidence to support an exempt claim. In
addition, representative samples of sales transactions cannot be substituted
for actual transactions when determining the percentage of compliance or the
amount of tax due. The plain language
of the rule requires that vendors provide exemption certificates or similar
acceptable evidence to verify exempt sales.
Utah Admin. R. 861-1OA-1(D) stipulates that it is presumed that parties
dealing with the Commission are familiar with all rules of the Commission and
all revenue laws of the state of Utah.
Petitioners inability to meet its burden of proof or to provide tax
exempt certificates for the sales in question opens it to liability for sales
tax assessments and any penalty and interest charges which have accrued.
DECISION AND ORDER
Based
on the foregoing, it is the decision of the Utah State Tax Commission that
Petitioner's Petition for Redetermination be denied and that the audit
assessment, as determined by the Respondent, stand.
DATED
this 7 day of October, 1988.
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