88-0209
Sales
Signed 6/26/90
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX, )
Petitioner, )
) 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
Respondent. )
_____________________________________
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
Chairman Commissioner
Joe B. Pacheco G. Blaine Davis
Commissioner Commissioner
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
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