87-1000 - Sales

 

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX

            Petitioner,                                                         :

v.                                                                                 :           INFORMAL DECISION

COLLECTION DIVISION OF THE                          :           Appeal No. 87-1000

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 (Respondent) to assess penalty and interest on sales and use tax account No. XXXXX for the audit period 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 represented the Petitioner.

            Petitioner stated that during the audit period in question he sold two cars to a XXXXX.  XXXXX provided Petitioner a tax exempt number and signed an exemption certificate.  Petitioner did not know at this time that the tax exempt number was invalid, but only discovered this fact later on during the audit.  Petitioner stated that he did not try to avoid taxes and that he took the tax exempt number in good faith.  Petitioner requests a waiver of the penalty and interest.

FINDINGS

            Sales tax rule A12-02-S23 (e) states the following:

            The burden of proving that a sale is for resale or otherwise exempt shall be upon the person who makes the sale.  In any case, if upon request of any member or agent of the tax commission the vendor fails to produce a valid exemption certificate or other similar acceptable evidence in support of the vendor's claim that a sale is for resale or otherwise exempt, the sale will be considered taxable and the tax shall be payable by the vendor.

            The exemption certificate in this matter was not a valid exemption certificate.  Therefore the Petitioner is liable for the tax and the corresponding penalty and interest.  Petitioner exhibited good faith in accepting the invalid tax exempt number.  Therefore, the Tax Commission hereby waives the penalty which has been assessed.  However, interest shall not be waived.  The Tax Commission was denied the use of the money during the period of delinquency.

DECISION AND ORDER

            It is the Decision and Order of the Utah State Tax Commission that penalty on sales and use tax account No. XXXXX for the audit period XXXXX be waived.  Interest shall remain as assessed.  The Collection Division of the Utah State Tax Commission is hereby ordered to adjust its records in accordance with this decision.

            DATED this 15 day of October, 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