BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX, ) ORDER
Petitioner, :
AUDITING
DIVISION, UTAH : Case No. 88-2540
STATE TAX COMMISSION, : Audit Period:
Respondent. : XXXXX, XXXXX, and XXXXX
_____________________________________
Based
upon a Stipulation and Agreement and Motion filed jointly by Petitioner, XXXXX
("XXXXX"), and Respondent, Auditing Division, Utah State Tax
Commission ("Auditing Division"), the Tax Commission hereby finds and
orders as follows:
a. XXXXX's Utah franchise tax returns for
XXXXX, XXXXX, and XXXXX are hereby accepted as filed, and the audit assessment
dated XXXXX for those years shall be completely abated.
b. XXXXX has filed its Utah franchise tax
return for XXXXX with Utah income computed on the basis of separate accounting,
using the principles, procedures and methods applied by XXXXX for its XXXXX,
XXXXX, and XXXXX Utah franchise tax returns, and such basis of reporting for
XXXXX is hereby accepted as a basis for settlement of this audit.
c. XXXXX is entitled to deduct XXXXX of all
unused Utah losses originating in XXXXX, XXXXX, XXXXX, XXXXX and XXXXX,
aggregating $$$$$, in computing Utah XXXXX taxable income.
d. XXXXX's Utah franchise tax return for XXXXX
is hereby accepted as filed, unless the Auditing Division conducts an audit as
soon as possible and issues a notice of deficiency for XXXXX no later than
XXXXX. Any such audit or notice of
deficiency shall not challenge the use of separate accounting as described in
paragraph (b) above.
e. XXXXX will use 3-factor formula
apportionment as described in Utah Code Annotated 59-7-301 through59-7-321 in
computing and reporting its Utah taxable income for XXXXX.
f. In computing its XXXXX Utah taxable income,
XXXXX is entitled to deduct one-half of all unused Utah losses originating in
XXXXX, XXXXX, XXXXX, XXXXX and XXXXX.
The remainder of any Utah losses originating in years prior to XXXXX
shall be deemed to expire in XXXXX. No
penalties of any kind will be assessed against XXXXX for XXXXX and interest on
any tax due will run only from XXXXX until paid. Payment will be made within ten days after entry of this Order by
the Commission.
g. XXXXX will file franchise tax returns for
years after XXXXX using 3-factor formula apportionment as described in Utah
Code Annotated 59-7-301 through59-7-321 or as provided by then applicable
law. No penalties or interest for
underpayment of estimated franchise tax for XXXXX will be assessed against
XXXXX.
h. Any Utah losses generated in years XXXXX
files under 3-factor formula apportionment can only be carried forward or
carried back as provided by then applicable law to years also filed under
3-factor formula apportionment and such losses will not be absorbed by any year
prior to XXXXX.
i. XXXXX shall be precluded from filing any further
appeals with regard to the issues that were pending in this matter and the
State shall not further audit XXXXX's books and records for the tax years XXXXX
through XXXXX (except as provided in (d)) and the State shall not assess any
additional franchise tax liability against XXXXX for such years (except as
provided in (d)). However, if XXXXX
franchise tax liability for any such year is increased or decreased as a result
of a federal tax audit ("RAR") such liability or refund shall be
based solely on the issues raised by the RAR.
Utah income or loss resulting from federal audit adjustments would be
calculated using the same method of filing (separate accounting through XXXXX
and the 3-factor formula from XXXXX forward).
Any additional losses generated from federal audit adjustments in
separate accounting years cannot carry forward into 3-factor formula years
except onehalf of such losses may be carried forward to XXXXX.
j. The Commission recognizes that acceptance of
the Stipulation and Agreement and the agreement not to appeal this Order does
not constitute an admission by either party as to the unitary or non-unitary
nature of XXXXX itself or XXXXX and any of its subsidiaries, the proper method
of allocating or apportioning income of XXXXX and any of its subsidiaries, or
the proper treatment of any item contained in the notice of deficiency or the
Request.
k. The Commission acknowledges that the parties
have agreed that the provisions of the Stipulation and Agreement and this Order
are confidential and shall not be disclosed to third parties including but not
limited to any state or political subdivision thereof, except as required by
law. XXXXX has reserved the right to
disclose the terms of the Stipulation and Agreement and this Order to its
independent auditors if required to do so by them in the course of their annual
audit.
DATED
this 17 day of October, 1989.
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
^^