BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No. 90-2510
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal telephone hearing on XXXXX. Joseph G. Linford, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were XXXXX, Attorney at Law, and 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 second quarter of XXXXX.
3. Between XXXXX and XXXXX, Petitioner sold off-road diesel fuel to XXXXX of XXXXX. All deliveries of this fuel were made to a mining operation at XXXXX. Utah sales tax was collected by Petitioner on these sales.
4. Petitioner later determined that these sales were not subject to Utah sales tax since they were made to an out-of-state entity, and Petitioner petitioned the Tax Commission for a refund of the taxes remitted to the Tax Commission. This occurred after XXXXX had requested a refund of such taxes from Petitioner.
5. By letter dated XXXXX, the Tax Commission notified Petitioner of the refund of the taxes collected from XXXXX in the amount of $$$$$, plus $$$$$ in interest, for a total refund of $$$$$.
6. The prepayment of Petitioner's sales tax had been remitted late for the second quarter of XXXXX. Therefore, a penalty was assessed. However, part of this penalty was assessed on the monies that were refunded to Petitioner, and from Petitioner, in turn, to XXXXX. Petitioner does not contest the penalty for the period in question, except the penalty assessed on the refunded amounts. It is Petitioner's position that since those amounts were not actually due the state in the first place, then no penalty should be assessed on them.
7. Research into Tax Commission records shows that Petitioner's assertions regarding the penalty assessment are correct in that the penalty was assessed in part on the monies refunded to Petitioner. Therefore, for the second quarter of XXXXX, the original tax liability of $$$$$ should be adjusted by the amount of Petitioner's refund corresponding with this period, i.e. $$$$$, to render an adjusted tax liability of $$$$$. The required prepayment would have been XXXXX of the adjusted tax liability, which amounts to $$$$$. Therefore, an appropriate penalty for the untimely prepayment on the adjusted tax amount would have been $$$$$. The original penalty assessed was $$$$$. If the adjusted penalty of $$$$$ is subtracted from that amount, it renders an overassessment of the penalty amounting to $$$$$. This is the amount of penalty that Petitioner is contesting.
8. Based upon the foregoing, Petitioner requests that the $$$$$ portion of the penalty be waived since that is the portion of the penalty pertaining to the sales tax refund for the period in question.
CONCLUSIONS OF LAW
The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. §59-1-401(8).)
DECISION AND ORDER
Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a reduction of the penalty associated with the second quarter of XXXXX to the amount of $$$$$. This amounts to a reduction of the penalty in the amount of $$$$$. Interest shall be adjusted to account for the reduction in the penalty. It is so ordered.
DATED this 15th day of February, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis