BEFORE THE UTAH STATE TAX COMMISSION
XXXXX, ) ORDER
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.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis