89-0189-Withholding

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX )

:

Petitioner, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW

v. ) AND FINAL DECISION

:

) Appeal No. 89-0189

COLLECTION DIVISION OF THE :

UTAH STATE TAX COMMISSION )

: Account No. XXXXX

Respondent. )

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission pursuant to the Utah Administrative Procedures Act for a formal hearing on XXXXX, before Joseph G. Linford, Presiding Officer. The Petitioner was represented by XXXXX. No one representing Respondent appeared at the hearing.

After reviewing the evidence and arguments of the parties in the record and the recommendation of the presiding officer, the Tax Commission hereby makes its:

FINDINGS OF FACT

l. The tax in question is mineral production withholding tax.

2. The period in question is July XXXXX to December XXXXX.

3. The law which imposes this tax, Utah Code Ann. 59-6-101 to 59-6-103, was enacted as HB 92 in the 1982 budget session of the Utah State Legislature and was to take effect on July 1, 1982.

4. Petitioner received information from the Tax Commission which Petitioner construed as stating that the tax in question did not apply to payments to working interest owners. Based upon this, Petitioner did not withhold the tax from the working interest owners for part of the period in question.

5. In XXXXX, Petitioner was again contacted by the Tax Commission, and upon information gained, Petitioner began withholding from its working interest owners. Since that time Petitioner has complied with all the withholding requirements under the law.

6. Penalties and interest were assessed for the amounts not withheld during the period in question.

7. By letter dated XXXXX, the Tax Commission waived all of the penalty amount of $$$$$. The Tax Commission did not waive the interest amount at that time equaling $$$$$.

8. Petitioner now requests that the interest assessment be waived as well.

CONCLUSIONS OF LAW

1. Utah Code Ann. 59-1-401 and 59-1-402 provide that penalties and interest shall be imposed for the late payment and filing of taxes.

2. Utah Code Ann. 59-1-401(8) provides that upon reasonable cause shown, the Tax Commission may waive or reduce penalties and interest imposed under the above statutes.

3. Such reasonable cause has been shown for the waiver of interest in this case. Petitioner may have been confused because of the information provided by the Tax Commission. Consistent with earlier decisions regarding this issue (see Utex Oil Company v. Auditing Division of the State Tax Commission of Utah, Tax Appeal No. 86-0232 (Utah State Tax Commission, 1987) and Wildrose Resources Corp. v. Auditing Division of the Utah State Tax Commission, Tax Appeal No. 88-0694 (Utah State Tax Commission, 1990)), the interest as well as the penalty should be waived.

DECISION AND ORDER

Based upon the foregoing, it is the decision and order of the Utah State Tax Commission that Petitioner's request for waiver of interest be granted, the waiver of penalty being previously granted.

DATED this 17th 4th day of May, 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