87-1159 - Oil & Gas

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX

            Petitioner,                                                         :

v.                                                                                 :

AUDITING DIVISION OF THE                                :           ORDER

            UTAH STATE TAX COMMISSION,            :           Appeal No. 87-1159

            Respondent.                                                     :           Tax Type: Severance and Conservation

_____________________________________

            The Utah State Tax Commission hereby approved the Agreement on the terms contained in the accompanying Stipulation between XXXXX and the Auditing Division of the Utah State Tax Commission.  Upon compliance with the terms of the Stipulation, the audit will be deemed fully satisfied.  The above-captioned appeal number 87-1159 is hereby dismissed.

            SO ORDERED by the Utah State Tax Commission this 10 day of December, 1992.

R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco                                                            G. Blaine Davis

Commissioner                                                               Commissioner


BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX

            Petitioner,                                                         :

v.                                                                                 :           STIPULATION

AUDITING DIVISION OF THE                                :           Appeal Nos. 87-1159

            UTAH STATE TAX COMMISSION,            :           Tax Type: Severance and

            Respondent.                                                     :           Conservation

_____________________________________

            This Stipulation is made by and between XXXXX (referred to herein as "taxpayer," "taxpayers" or by their specific corporate names) and the State of Utah by and through the Utah State Tax Commission ("Commission") and its counsel, the Utah Attorney General.

RECITALS

            WHEREAS, the Taxpayers filed Utah severance tax and conservation tax returns for oil and gas produced in production periods beginning XXXXX and ending XXXXX (the "Production Periods"); and WHEREAS, a controversy has arisen concerning additional tax liability of Taxpayers for Utah severance tax and conservation tax due for oil and gas produced during the Production Periods; and 1 Although the term "severance tax" is used throughout this Stipulation to refer to the production related tax currently imposed by Chapter 5, Title 58, Utah Code Ann., it is agreed and understood that "severance tax" is synonymous with the tax sometimes referred to as "occupation tax" and the assessments referred to herein used the term "occupation tax" in lieu of "severance tax."  WHEREAS, the Auditing Division of the Utah State Tax Commission ("Division") has assessed the Taxpayers for additional severance tax and conservation tax, related penalty and interest pursuant to the following three "Statutory Notice of Deficiency" notices: Statutory Notice of Deficiency dated XXXXX, Statutory Notice of Deficiency dated XXXXX, and Statutory Notice of Deficiency dated XXXXX (collectively called the "assessment" or "assessments"); and WHEREAS, XXXXX has outstanding two refund claims pending before the Appeals Division of the Utah State Tax Commission, in Appeal No. 87-11592 such refund claims stemming from Federal Energy Regulatory Commission Orders 306 and 306A; and WHEREAS, XXXXX refund claim is comprised of $$$$$ in severance tax and $$$$$ in conservation tax, such amounts totaling $$$$$; and WHEREAS, there exists by virtue of the assessments $$$$$ in severance tax and $$$$$ in conservation tax, such amounts being more fully described in Schedule A attached hereto and incorporated herein for all purposes and totaling $$$$$ thereby reducing XXXXX refund claim to a net refund of $$$$$; and 2 For purposes of this Stipulation, reference to Appeal No.87-1159 is deemed to include any existing cases and matters collectively referred to as 87-1159-A and 87-1159-C.  WHEREAS, $$$$$ in severance tax and $$$$$ in conservation tax, such amounts totaling $$$$$ of the outstanding assessments may be refunded XXXXX pending the final outcome of certain litigation more fully described at paragraph 4 under the "Terms of Agreement:" and WHEREAS, it is the desire of the Taxpayers and the Division to resolve any controversy concerning any existing or potential assessments or refund claims arising in the production periods, including those referenced herein, for severance tax and conservation tax, related interest and penalty for the Production Periods;  NOW, THEREFORE, the Taxpayers and the Division agree as follows:

TERMS OF AGREEMENT

            1. The Division will remit or cause to be remitted to XXXXX $$$$$, said refund being comprised of $$$$$ in Utah severance tax and $$$$$ in Utah Conservation Tax within 60 days after the Commission signs the Order approving this Stipulation.

            2. No additional assertion of Utah severance tax or conservation tax, related penalty or interest, shall be made by the Division against the taxpayers for the Production Periods, either by assessment offset, or otherwise, and no further claim for refund shall be made by the Taxpayers for severance tax or conservation tax, related penalty, or interest for the Production Periods.

            3. This Stipulation does not constitute a concession or agreement by either party as to the correctness of the Commission's assessing additional severance or conservation taxes against taxpayers based on reimbursement of taxes to taxpayers by various purchasers of taxpayers.

            4. The Division will refund, or cause to be refunded to taxpayers, in amounts herein under described, an additional $$$$$ in severance tax and $$$$$ in conservation tax, such amounts totaling $$$$$ if the case currently pending before the Utah Court of Appeals under Case NO. 920545-CA and styled XXXXX v. State Tax Commission of Utah is decided favorably to XXXXX.  The specific issue that must be decided favorably to XXXXX is whether additional Utah severance tax or conservation tax is owed on tax reimbursements made to XXXXX by its purchasers. If the final decision holds that additional Utah severance tax or conservation tax cannot be assessed based on tax reimbursements, the Division will refund an additional $$$$$ to XXXXX, and an additional $$$$$ to XXXXX.

            5. The Division will undertake whatever action is necessary to make the additional refund referenced in paragraph 4 within 60 days after all applicable appellate time tables have expired and the judgment of the final court reviewing XXXXX final and nonappealable.

            6. Taxpayers and the Division agree that this Stipulation is limited to the currently pending severance tax and conservation tax assessments and refund claims referenced herein and that this Stipulation in no way involves a determination of any Utah State royalty issues or claims made by Taxpayers and currently under review by any Utah agency or court.

            7. This Stipulation is subject to the approval of the Utah State Tax Commission and shall become final and conclusive between the parties upon approval by the Utah State Tax Commission as evidenced by a written Order. Should the Commission fail to approve this Stipulation, it shall be null and void and shall not be admissible as evidence against either party in any proceeding.

            8. The parties stipulate that the appeal numbered 87-1195 shall be dismissed upon approval of this Stipulation by the Utah State Tax Commission. Each signatory to this Stipulation represents that he or she has full authority to execute this Stipulation on behalf of the party designated.

            DATED THIS 19 day of November, 1992.

XXXXX

ATTORNEY GENERAL, for the

UTAH STATE TAX COMMISSION

AUDITING DIVISION

XXXXX

Assistant Attorney General

DATED THIS 18 day of November, 1992.

XXXXX

Executive Vice President

DATED THIS 18 day of November, 1992.

XXXXX

Executive Vice President

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