BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, :
v. : INFORMAL DECISION
AUDIT DIVISION
OF THE : Appeal No. 87-2192
STATE TAX
COMMISSION OF UTAH, )
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter is before the Utah State Commission on a petition for redetermination
filed by the Petitioner on XXXXX. The
Auditing division of the Utah State Tax Commission filed a response on
XXXXX. No hearing was requested by the
Petitioner or the Respondent.
Therefore, the Tax Commission makes its decision on the record before it
and upon the recommendation of the Hearing Officer. The Petitioner argues that the electricity, which is a subject of
the audit, becomes an ingredient or component part of the final product i.e.
the telephone transmission. In other
words, the Petitioner is not the end user of the electricity. Because the electricity becomes an
ingredient or component part of the tangible personal property, the Petitioner
argues that it is a wholesale sale and exempt under Utah code ann.
§59-12-104(28). The Respondent argues
that pursuant to Utah code ann. §59-12-103(c) the Tax Commission is required to
collect tax for "electricity . . . sold or furnished for commercial
consumption." Respondent argues
that the electricity to provide telephone transmission in long distance
telephone service is used or is a type of usage classified as commercial and
is, therefore, subject to tax. Further,
the Respondent argues that the Petitioner sells telephone services and not
tangible personal property and, therefore, Utah Code Ann. §59-12-103 does not
apply.
DECISION AND ORDER
Based
upon the foregoing it is the Decision and Order of the Utah State Tax
Commission that the petition for redetermination is denied. The Tax Commission finds that the arguments
presented by the Respondent persuasive and therefore, denies the petition and
affirms the assessment.
DATED
this 31 day of May, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner