BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioner : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
AUDITING
DIVISION OF THE : Appeal No. 89-1315
UTAH STATE TAX COMMISSION : 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 on behalf of the Commission. Present and representing the Petitioner was
XXXXX. Present and representing the Respondent was XXXXX, Assistant Attorney
General
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1.
The tax in question is sales tax.
2.
The period in question is XXXXX.
3.
As a result of an audit conducted on the Petitioner's business during the above
mentioned period of time, a sales tax deficiency in the amount of $$$$$ was
assessed.
4.
The bulk of that deficiency arose from the manner in which the Petitioner
treated the sale and installation of electrical equipment on one particular
contracting job.
5.
The Petitioner had purchased materials used in the above mentioned job tax free
using its tax exemption number. The
Petitioner then did not charge sales tax to its customer on the job in question
because the customer had also presented a sales tax exemption certificate to
the Petitioner.
6.
As a result of the audit conducted by the Auditing Division, the Petitioner was
found to be a real property contractor and, therefore, the manner in which it
had been treating sales tax on the purchases of equipment and supplies was
found to be improper.
7.
Although no penalty was assessed for the sales tax deficiency, interest in the
amount of $$$$$ was assessed against the Petitioner.
8.
After receiving the audit report, the Petitioner then met with its customers
and determined that the sales tax deficiency would be paid by both parties in
proportion to the amount they felt they were responsible for. It is the Petitioner's position that it
should not be responsible for the entire amount of interest, but that its
customers should also bear part of the cost.
CONCLUSIONS OF LAW
The
Tax Commission is granted the authority to waive, reduce, or compromise
penalties and interest upon a showing of reasonable cause. (Utah Code Ann.
§59-1-401(8).)
DECISION AND ORDER
In
the present case, the Petitioner as a real property contractor should pay the
sales tax on materials and supplies at the time it purchases them from its
vendors rather than purchasing it tax free and then passing the sales tax along
to its customers. The Petitioner failed
to do this and, therefore, the imposition of interest against the Petitioner is
appropriate.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the interest associated with the audit
period XXXXX. It is so ordered.
DATED
this 15th day of January, 1991.
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