BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX,
Petitioner : ORDER
:
v. : Appeal No. 90-1055
AUDITING
DIVISION OF THE :
UTAH STATE TAX COMMISSION : Account
No. XXXXX
:
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission upon a Petition for
Reconsideration, dated XXXXX, filed by the Petitioner as a result of the
Commission's final decision dated XXXXX.
FINDINGS
1. Utah Administrative Rule R861-1A-1(P)
provides that a Petition for Reconsideration "will allege as grounds for
reconsideration either a mistake in law or fact, or the discovery of new
evidence." Under this rule, the
Tax Commission may exercise its discretion in granting or denying a Petition
for Reconsideration. The points raised
in Petitioner's Petition for Reconsideration are discussed below, in the order
of their presentation.
2. Petitioner argues that because it was
advised by Audit Division staff that several of its other activities were not
subject to sales tax, Petitioner was justified in concluding that its XXXXX was
also not taxable. Petitioner's
arguments overlooks that fact that it had also been advised by others on the
Audit Division staff that its activities were subject to sales tax. Petitioner chose to accept the advice to its
liking and reject the contrary advice.
Then, without further discussion of the matter with Audit Division
staff, Petitioner concluded that the XXXXX was also not subject to tax. The XXXXX had not existed when Audit
Division staff initially reviewed Petitioner's operation. In its previous
Order, the Commission waived retroactive application of sales tax to those
specific activities where Petitioner received conflicting advice from different
members of Audit Division staff.
Petitioner did not receive conflicting advice regarding the taxability
of the XXXXX. The Commission therefore
reaffirms its decision that the XXXXX is subject to sales tax.
3. Petitioner also contends the Commission did
not respond to its challenge to the Administration rules under which sales tax
was imposed on Petitioner's various activities. In effect, Petitioner argues that such rules exceed the scope of
Utah's Sales Tax Act. The Commission
recognizes that payment of sales tax cannot be required other than as
authorized by the Sales Tax Act.
However, the Commission is authorized to prescribe rules in conformity
with the Act to ascertain and assess the tax imposed by the Act. (See Utah Code Ann. §59-12-118.) The rules upon which the assessment was made
in this case are an application of the foregoing rulemaking authority. The rules themselves have remained unchanged
for many years, with no legislative direction to the contrary. The commission therefore finds no merit in
Petition's challenge to those rules.
4. Petitioner contends that §59-12-103(1)(f) of
the Sales Tax Act and the administrative rules pertaining to that portion of
the Act are unconstitutionally vague.
Petitioner has framed its objections in conclusionary language, with no
citation of authority and minimal analysis.
The commission therefore rejects Petition's challenge the
constitutionality of the statute and rules.
5. Petitioner further argues that no logical
distinction can be drawn between bowling, which is not subject to sales tax,
and batting cages, which are subject to tax.
The Commission recognizes that distinctions between the two activities
are difficult to draw. The exemption of
bowling from sales tax is largely historical and perhaps would not exist if a
fresh look at the issue were possible.
Even so, the fact that receipts from bowling may have been excluded form
taxation for historical reasons does not require that receipts from batting
cages also be excluded, where such receipts are otherwise subject to sales tax
under the Sales Tax Act.
6. The Petitioner also contends that it has
overpaid other sales taxes and is therefore entitled to an offset against the
sales tax liability imposed by the audit which is the subject of this
appeal. The Petitioner did not pursue
such a position during the hearing in this matter, nor has any specific claim
for refund been submitted. Petitioner
may claim such a refund in the manner provided by law and regulation.
7. Finally, the Commission must correct
Petitioner's misstatements regarding a draft informal opinion prepared during
XXXXX by an Assistant Utah Attorney General.
Petitioner contends the Commission concealed the opinion because it was
favorable to Petitioner's position.
First, the so called opinion is merely a draft that was never signed,
never approved by the Attorney General and never accepted by the
Commission. Second, the Commission has
made no effort to conceal the draft.
The Petitioner has a copy of the draft, which has been made a part of
the record in this matter. The draft is
not binding on the Commission, and the Commission has rejected its conclusions
for the reasons stated in the Commission's original decision.
DECISION AND ORDER
Based
upon the foregoing, it is the decision and order of the Utah State Tax
Commission that the Petition for Reconsideration is denied. It is so ordered.
DATED
this 10 day of March, 1992.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner