88-0156 - Withholding Tax





            Petitioner,                                                         :

v.                                                                                 :           INFORMAL DECISION


AUDITING DIVISION OF THE                                :           Appeal No. 88-0156

            UTAH STATE TAX COMMISSION,            :

            Respondent.                                                     :



            This matter came before the Utah State Tax Commission for an informal hearing on the XXXXX.  James E. Harward, Hearing Officer, heard the matter for and in behalf of the Tax Commission.  XXXXX, XXXXX, XXXXX, and XXXXX all appeared representing the Petitioner.  XXXXX appeared representing the Respondent.

            The hearing was commenced, evidence was taken, and recess was called for the purpose of reviewing evidence and arriving at a stipulation as to those matters which could be agreed upon between the parties.  At the recommencement of the hearing the parties entered into a stipulation whereby all issues are resolved except for five transactions involving the XXXXX.

            XXXXX submits a published list of repossessed of available mobile homes to the Petitioner.  The Petitioner then acts as an agent for the sale of those mobile homes.  The Petitioner is then given a commission for sending the purchaser to XXXXX upon the consummation of the sale.  XXXXX handles all the disbursement of monies received from the sales of the mobile homes.

            The Respondent argues that since the Petitioner is listed on the transaction as the dealer, then he is responsible for the collection and payment of the sales tax.  Respondent argues that since it was not part of the arrangement and did have any control over the funds or disposition of the funds, they are not responsible for the collection and payment of the sales tax.


            The Tax Commission has reviewed the files and the records of the Tax Commission to determine whether or not XXXXX has a sales tax number and has filed returns.  No records exist of such transaction occurring or of a license being issued to XXXXX.  The Tax Commission is under the responsibility of collecting sales tax.  As an extension of that responsibility, licensed and bonded dealers are required to collect sales tax on any transactions with which they associate.  The Petitioner is a licensed and bonded dealer which participated in transactions whereby sales tax was required to be collected.  Sales tax was, in fact, collected.  It appears that sales tax was collected by XXXXX, however, was not distributed through the dealer.  Since the dealer has the ultimate responsibility to the Tax Commission for the collection and payment of that sales tax, that dealer is therefore responsible.  Based upon this reasoning, the Tax Commission has no other alternative but to affirm the assessment on the five transactions involving sales of mobile homes of XXXXX whereby the Petitioner acted as the dealer and received a commission for the sale of the mobile homes.  However, the Tax Commission encourages Petitioner to seek recourse against XXXXX for reimbursement of the tax collected but not paid.

            DATED this 11 day of October, 1988.


R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco                                                            G. Blaine Davis

Commissioner   Commissioner