BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, :
v. : INFORMAL DECISION
:
COLLECTION
DIVISION OF THE : Appeal No. 88-0049
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This is an appeal to the Utah State Tax
Commission for reconsideration of a Commission decision denying a request for a
complete waiver of penalty and interest assessments on Petitioner's third
quarter XXXXX sales tax return. Pursuant to Utah Code Ann. §63-46b-5(1)(b), no
hearing was held. A review of Petitioner's file served as the
evidentiary basis for this decision.
Petitioner, XXXXX, failed to file a timely
third quarter XXXXX sales tax return and was assessed late filing penalty and
interest charges. XXXXX, representative for the Petitioner, asserts that the
failure to timely file was caused by difficult market conditions and lack of
funds. Petitioner contacted the Commission regarding the situation before the
due date when it was realized that the tax payment could not be made. A previous Commission decision reduced the
penalty amount from $$$$$ to $$$$$.
Petitioner requests a further reduction asserting that Petitioner's
exceptional filing record should be cause enough for waiver of the penalty. Petitioner has been in business for the past
XXXXX years and has consistently filed timely returns.
FINDINGS
Utah
Administrative Rule 865-02S-1 states the following: "A. The sales and use taxes r transaction taxes
. . . . B. . . . the purchaser is the actual taxpayer. The vendor is charged with the duty of collecting
the tax from the purchaser and of paying the tax to the state." Utah Administrative Rule 865-04S-1 states
that the vendor is required to remit to the Tax Commission all tax funds in his
possession and is a guarantor of all amounts required to be
collected." These two rules imply
that the vendor acts as a fiduciary for the state and that any tax collected
belongs to the state from the time of collection, therefore, failure to remit
the tax due to insufficient funds indicates a breech of that fiduciary
relationship has occurred. Utah Code
Ann. §59-1-401(1)(b) stipulates a penalty of the greater of $$$$$ or 10 percent
of the tax due shall be assessed for failure to file a timely return, and Utah
code Ann. §59-1-402 authorizes the Commission to charge interest at the rate of
1 percent per month on all delinquent taxes thus, both the penalty and interest
assessed Petitioner's account are valid.
However, Utah Code Ann. §59-1-401(7) authorizes the Commission to waive
or reduce penalty assessments upon a showing of reasonable cause. Although the penalty has subsequently been
reduced to $$$$$ further consideration is now given to Petitioner's request for
complete abatement of the penalty assessment.
Petitioner
has been in business for XXXXX years and has consistently filed timely returns
with the Commission. This is the
Petitioner's first late filing in its history of dealing with the Tax
Commission. Because Petitioner has such
an excellent record with the Commission, and because the Petitioner contacted
the Commission before the tax due date to notify the Commission of the pending
delinquency, a waiver of the penalty is granted. However, because the state of Utah was denied the use of the tax
money during the delinquent period no interest will be waived.
DECISION AND ORDER
Based
on the foregoing facts, it is the decision and order of the Commission that the
request for a waiver of penalty be granted.
The request for a waiver of interest is denied.
DATED
this 5 day of October, 1988.
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
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