BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 90-1503
UTAH STATE TAX COMMISSION, :
: Account No. XXXXX
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.
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 the third quarter XXXXX.
3. During the third quarter of XXXXX, the Petitioner company was owned, in part, by an individual other than its current owner.
4. The business arrangement under which the Petitioner operates is that as a franchisee. The Petitioner pays a business service fee to XXXXX, and XXXXX responsibility is, among other things, to pay and file its tax returns.
5. XXXXX, in paying the tax liabilities of the Petitioner, issues a check drawn on the Petitioner's account. XXXXX then notifies the Petitioner that a check has been issued and drawn on the Petitioner's account.
6. On XXXXX, the parent corporation, XXXXX, repurchased the stock in the Petitioner company because of business problems encountered by the franchisee.
7. The sales tax return was filed and paid by XXXXX by a check drawn on XXXXX of XXXXX account, however, the check was not honored due to insufficient funds. The sales tax liability for that period was $$$$$.
8. The current owner of the Petitioner company assumed control on XXXXX. It was at that time the current owner became aware of the outstanding tax liability.
9. A penalty in the amount of $$$$$ was assessed for the late payment of the sales tax return in question.
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
Although, in the present case, the current owner was not responsible for the late payment of the return in question, the current owner is, nevertheless, liable as a transferee for the liability of the tax and penalty imposed.
Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalty associated with the third quarter XXXXX sales tax. It is so ordered.
DATED this 27 day of November, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis