BEFORE THE UTAH STATE TAX COMMISSION
) FINDINGS OF FACT,
v. ) CONCLUSIONS OF LAW
) AND FINAL DECISION
AUDITING DIVISION OF THE )
UTAH STATE TAX COMMISSION, ) Appeal No. 88‑0209
) Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Paul F. Iwasaki, Presiding Officer, heard the matter for and in behalf of the Commission. Present and representing the Petitioner was XXXXX. Present and representing the Respondent was XXXXX, Assistant Attorney General.
Based upon the testimony and evidence presented at the hearing, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is sales tax.
2. The audit period in question is XXXXX through XXXXX.
3. The Petitioner was engaged in the business of constructing trusses. XXXXX purchased the company in XXXXX or XXXXX. At that time, the company would pay its suppliers sales tax on the lumber it purchased and which it ultimately manufactured into trusses. The Petitioner then charged sales tax on the sales of those completed trusses to its customers. Petitioner did not remit that sales tax to the Tax Commission.
4. The Petitioner did not dispute the inappropriateness of the procedure it had been using regarding the payment or collection of sales tax on materials it had purchased. Petitioner did dispute, however, the finding of the audit. Specifically, the Petitioner claimed that it had not been given credit for sales tax remitted by vendors for purchases made by Petitioner.
5. Petitioner was unable to substantiate any instances where credit for taxes paid on materials purchased by it should have been made but were not.
6. The Petitioner had received from vendors, refunds of sales tax paid for purchases of lumber. The Petitioner did not remit that money to the Tax Commission. Instead, the Petitioner had spent it on other debt obligations.
7. Field auditors from the Auditing Division had made attempts to contact some of the vendors with whom the Petitioner had dealt in an attempt to ascertain the correct amount of taxes owed but not paid.
CONCLUSIONS OF LAW
Sale of tangible property to real property contractors and repairmen of real property is generally subject to tax. (Utah State Tax Commission Administrative Rule R865‑19‑58(s).)
DECISION AND ORDER
In the present case, the Petitioner does not dispute the fact that the procedure it followed in the payment, collection, and remittance of sales tax with regard to the material it purchased from vendors and which it subsequently converted into roofing trusses and sold to customers was not appropriate. The only argument raised by the Petitioner is that the amount of deficiency assessed is incorrect in that it does not accurately reflect credit which should have been given to it for sales tax paid by its vendors on those materials.
The Petitioner was unable to establish any singular instance where credit for sales tax paid had not been given in the audit report. The Petitioner did claim that credit for claims for refunds which were requested by three vendors should have been credited to its account, however, that is not the case.
The claims for refund which were submitted by three of the Petitioner's vendors could only have been paid to those vendors. If indeed, payments were made as a result of those requests for refunds, the vendors should have paid the Petitioner, who in turn would have to remit that amount to the Commission in order for credit to be given to its account. If those vendors received any refund based upon taxes collected and paid in error as a result of the Petitioner's account and did not repay the Petitioner, then an action may lay between the Petitioner and those vendors. The refund, however, to those vendors would not affect the amount of taxes due by the Petitioner, nor would credit be given for those amounts.
Based upon the foregoing, the Tax Commission finds that the audit report is correct and that the Petitioner has failed to establish any instance where credit on its account was due but was not given. Therefore, the determination that the Auditing Division is affirmed. It is so ordered.
DATED this 26 day of June, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis
NOTICE: You have ten (10) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. ''63‑46b‑13(1), 63‑46b‑14(2)(a). PFI/sd/9285w