87-1140 - Sales

BEFORE THE STATE TAX COMMISSION OF UTAH

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UTAH STATE TAX COMMISSION, : ORDER DENYING

COLLECTION DIVISION, : PETITION FOR TEMPORARY

Petitioner, : RELIEF

v. : Appeal No. 87-1140

XXXXX )

Respondent. : Sales Tax No. XXXXX

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STATEMENT OF CASE

On XXXXX, the Utah State Tax Commission rendered an Informal Decision revoking Respondent's sales tax license No. XXXXX. This decision was served upon Respondent on XXXXX. On XXXXX, Respondent filed a Petition for Temporary Relief from Order with the Tax Commission. On XXXXX, David J. Angerhofer, Hearing Officer, held a telephone conversation with XXXXX, Attorney for Respondent, to discuss the petition. Respondent stated that he has approximately $$$$$ worth of inventory which, if liquidated at retail level, would probably pay all priority lien holders, would pay the tax obligation in full, and would be at least a partial payment to the unsecured creditors. Petitioner projects sales of from $$$$$ to $$$$$ during XXXXX, from $$$$$ of inventory. If, on the other hand, the bank sells the inventory at wholesale, it will recover only on the dollar. Respondent stated that it will change locations to a better area to increase retail sales, that the majority if not all of the tax liability will be paid by the end of the holiday season, that Respondent will set up a trust account and make weekly deposits of sales tax, and that Respondent will stipulate with the Tax Commission to be subject to an audit at any time to verify that Respondent is properly collecting sales tax. Respondent stated that it intends to file a Chapter 11 bankruptcy proceeding to either reorganize its debts or to liquidate its assets in a fashion as to realize the maximum value. It is in the best interest to the State to permit Respondent to remain in business in order for it to file a Chapter 11 bankruptcy proceeding. If the State allows Respondent to remain in business, a significantly greater recovery will result. The Tax Commission finds no basis on which to grant the Petition for Temporary Relief from Order. Respondent has not posted a bond in the amount of the tax, penalty, and interest that is currently delinquent and due, and Respondent has not opened an account in a local financial institution for the purpose of making weekly deposits in the amount of the current accruing sales tax liability.

ORDER

Based on the foregoing, it is the Order of the Utah State Tax Commission that Respondent's Petition for Temporary Relief from Order is hereby denied. The Informal Decision rendered on XXXXX, and revoking sales tax license No. XXXXX shall remain in effect.

DATED this 26 day of October, 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

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