BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioner, : FINDINGS OF FACT,
v. : CONCLUSIONS OF LAW
: AND FINAL
DECISION
AUDITING
DIVISION OF THE :
STATE TAX
COMMISSION OF UTAH, ) Appeal No. 88-1668
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 Tax Commission. Present and representing the Petitioner were
XXXXX, Attorney at Law, XXXXX. Present and representing the Respondent were
XXXXX, Assistant Attorney General, XXXXX, and XXXXX.
The
Petitioner filed this appeal contesting the determination of the Auditing
Division which assessed a deficiency arising out of the Petitioner's failure to
pay sales and use tax for sales made during the audit period XXXXX through
XXXXX.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
makes its:
FINDINGS OF FACT
l. The tax in question is sales tax.
2. The period in question is from XXXXX through
XXXXX.
3. The Petitioner operates an XXXXX company.
4. The Petitioner would enter into a written
agreement with the owner of tangible personal property whereby the Petitioner
agreed to sell at XXXXX the goods of the owner.
5. The written agreement entered into by the
Petitioner and owner of the property provided that the Petitioner would have
the full authority to sign any memorandum of sale on behalf of the owner and to
receive from the purchasers the purchase price of the goods as agent for the
owner.
6. In the vast majority of the cases, as
compensation for his services, the Petitioner would receive an agreed upon
percentage of gross sales from the XXXXX.
7. The potential bidders at each XXXXX would complete
a bidder registration sheet. That form
contained their name, address, city, state, drivers license number, and phone
number. On the back of that sheet,
bidders would also write their sales tax license number when applicable.
8. When the XXXXX was completed, or when the
buyer was ready to leave, the buyer would then go to the cashier, who is an
employee of the Petitioner, and pay for those purchases he made during the
XXXXX. At that time the purchase price
and sales taxes were collected unless the buyer represented the purchase to be
a tax exempt sale.
9. The Petitioner did not require the
purchasers who claimed their purchases to be exempt to complete as less tax
exemption certificate. Instead, the
Petitioner relied upon the information contained on the bidder registration
form.
10. The above procedure was followed in all of
the XXXXX in question with the exception of an XXXXX held by the Petitioner on
behalf of XXXXX.
11. In the XXXXX sale, the Petitioner acted only
as a "chanter." That is, the
Petitioner simply called the XXXXX. The
sale was held at the office of XXXXX, and the property was located elsewhere.
As compensation for his services, the Petitioner received a flat fee of $$$$$.
At no time did the Petitioner receive possession or title to the property.
12. The agreement entered into between the
Petitioner and XXXXX did not give the Petitioner authority to sign any
memorandum of sale on behalf of the owner or to receive from the purchasers of
such goods the purchase price of the property as agent of the owner.
CONCLUSIONS OF LAW
The
burden of proving that a sale is for resale or otherwise exempt is upon the
person who makes the sale. Any agent of
the Tax Commission who requests the vendor to produce a valid exemption certificate
or other similar acceptable evidence to support the vendor's claim that a sale
is for resale or otherwise exempt and a vendor is unable to comply, the sale
would be considered taxable and tax will be payable by the vendor. (Utah State Tax Commission Administrative
Rule R865-19--23s.)
Every
XXXXX entrusted with possession of any bill of laden, custom house permits,
warehouseman's receipts, or other documents of title where delivery of any
tangible personal property, or entrusted with possession of any such personal
property for the purpose of sale, is deemed to be the retailer thereof, and is
required to collect sales tax, file return, and remit the tax. (Utah State Tax
Commission Administrative RuleR865-19s-45.)
DECISION AND FINAL ORDER
In
the present case, there is no question that the Petitioner as an XXXXX was a
"retailer" within the meaning of Utah Code Ann. §59-12-101(9), and
therefore was required to collect and remit sales tax on goods sold at the
auction that were not otherwise exempt. Petitioner by its own action in collecting and remitting sales tax
shows its acknowledgment of the applicability of the statue to its
situation. What is in controversy
however, is the failure of the Petitioner to collect and remit sales taxes on
those sales of property which the Petitioner believed to be exempt, but for
which no exemption certificates were obtained.
The
Petitioner argued that the bidder registration forms which contained the name,
address, telephone number and sales tax license number of the purchasing party
was sufficient to meet the requirements as an exemption certificate.
The
Tax Commission finds that the bidder registration forms did not meet the
criteria for an acceptable exemption certificate or other similar acceptable
evidence to establish the vendor's claim that a sale is for resale or otherwise
exempt. That, of course, applies to
only those instances where the Petitioner acted as an XXXXX. With respect to the XXXXX sale, the Tax
Commission finds that the Petitioner did not act as an XXXXX entrusted with
possession of any bill of laden or other document of title for delivery of any
tangible personal property nor was he entrusted with possession of any such
personal property for the purpose of the sale as contemplated within the
meaning of Utah State Tax Commission Administrative Rule R865-45s.
Based
upon the foregoing, the Tax Commission finds that the Petitioner has failed to
establish that those sales in which it acted as an XXXXX within the meaning of
R865-45s, and for which no valid exemption certificates were obtained, were
exempt sales. To that extent the
Commission affirms the determination of the Auditing Division. The Tax Commission further finds, however,
that with respect to the XXXXX sales and the inclusion of those items within
the audit report, such items were not subject to collection and payment of
sales tax by the Petitioner due to the fact that in that sale, the Petitioner
did not act as an XXXXX within the meaning of Rule R865-45s. The amendment of
the audit report to reflect this decision is hereby ordered.
DATED
this 14 day of March, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner