90-2631 - Sales

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

In Re: :

XXXXX ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

: AND FINAL DECISION

Petitioner, :

: Appeal No. 90-2631

: Account No. XXXXX

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Joseph G. Linford, 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 periods in question are the fourth quarter of XXXXX, the second through fourth quarters of XXXXX, and the first and second quarters of XXXXX.

3. Petitioner stated that the delinquency in the payment of sales taxes for the periods in question was the result of a change in Petitioner's business operations. Petitioner is involved in the business of apartment rentals, and beginning with the periods in question, Petitioner started to lease some of its units for thirty days or less which rendered them subject to sales tax. Petitioner knew that this change would require that a transient room tax be charged but was unaware that the sales tax would then be required as well. As soon as Petitioner was apprised of the fact that the sales tax should be collected by Petitioner for stays of less than thirty days, Petitioner began collecting and remitting the tax.

4. Because Petitioner's delinquency in filing and paying the sales tax for the periods in question, penalties and interest have been assessed. Petitioner requests that the penalty and interest charges be waived based upon the above facts.

CONCLUSIONS OF LAW

The Tax Commission is granted this 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

The penalty assessed in this case is a negligence penalty which is appropriate in a case such as this where the taxpayer was negligent in meeting its sales tax obligation. Petitioner had the duty to become aware of the sales tax requirements and to meet those requirements, but the evidence does not show that Petitioner made any effort to make itself aware of the requirements. Therefore, since Petitioner was negligent, the waiver of the penalty would not be appropriate. Additionally, interest should not be waived since the state was deprived of the use of the tax funds in question for a period of time through no fault of its own and should be compensated for that loss of use.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalty and interest associated with the fourth quarter of XXXXX, the second through fourth quarters of XXXXX, and the first and second quarters of XXXXX. It is so ordered.

DATED this 15 day of February, 1991.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner