BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 90-1575
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 withholding tax.
2. The period in question is XXXXX.
3. The Petitioner is a non-profit organization which contracts with XXXXX to provide XXXXX services on behalf of the county.
4. The withholding tax for XXXXX, which was due XXXXX, was drawn on XXXXX and placed in an envelope. The envelope was then inadvertently placed in a stack of other unused envelopes and was not mailed.
5. The error was discovered and payment was made immediately thereafter on XXXXX.
6. As a result of the untimely filing and payment of the XXXXX withholding tax, a penalty in the amount of $$$$$ was imposed as well as interest calculated at the statutorily prescribed rate.
7. The penalty was subsequently waived by Commission action. The Petitioner requests a waiver of the interest assessed.
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 untimely filing of the withholding tax and return was an honest error, thus justifying the waiver of the penalty. The waiver of the interest, however, is another matter. The imposition of interest is not to serve as a penalty for failing to comply with the applicable statutes or rules. The function of interest is to compensate for that money which the state did not have the use of, but which remained with the taxpayer.
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 XXXXX withholding tax. Interest is to be calculated from the date the tax was due until XXXXX, which was the date that it was paid. 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