91-0075

Sales

Signed 9/5/91

BEFORE THE UTAH STATE TAX COMMISSION

_______________________________

In Re: ) FINDINGS OF FACT,

) CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

) Appeal No. 91‑0075

) Account No. XXXXX

___________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Alan Hennebold, 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 XXXXX.

3. Petitioner is a general engineering contractor located in XXXXX. During early XXXXX, it began looking for a special type of truck to be used on a contract in XXXXX. The Petitioner located a suitable truck at XXXXX in Salt Lake City. During XXXXX, one of the Petitioner's employees traveled to XXXXX, took delivery of the truck, then returned with it to XXXXX where it was licensed and titled. As part of that process, use tax was paid to Idaho.

4. When Petitioner took delivery of the truck in Salt Lake City, its employee completed a nonresident affidavit stating that the Petitioner did not conduct business in Utah. On that basis, no Utah sales tax was collected on the transaction.

5. During XXXXX the Petitioner worked on a contract with the federal government at XXXXX, Utah. Later in XXXXX, the Petitioner performed work in Utah on behalf of the federal government at its XXXXX facility. The Petitioner's Utah contracts were valued at XXXXX, on total sales for Petitioner of XXXXX.

6. Based on the foregoing facts, the Tax Commission's audit division determined the transaction was subject to Utah sales tax. It assessed tax in the amount of XXXXX together with a 15% penalty in the amount of XXXXX. The Petitioner was notified of the foregoing assessment of tax, penalty, and interest on XXXXX, and was also notified of its right to request redetermination. The Petitioner filed a request for redetermination on XXXXX, which request was withdrawn in XXXXX. On XXXXX, an additional penalty of XXXXX was imposed against Petitioner for late payment of its tax liability. The Petitioner had paid an amount equal to the entire tax due on XXXXX.

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 Petitioner appears to have acted in good faith when it executed the Utah nonresident affidavit in connection with its purchase of a truck from XXXXX. While the answers of Petitioner's employee on the nonresident affidavit are not technically correct, the Petitioner's situation was somewhat unusual, since its place of business was in XXXXX and it had only minimal contacts with Utah. Under such circumstances, the Petitioner's employee erred only in his failure to inquire more fully regarding the Petitioner's status as a nonresident for sales tax purposes.

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a reduction of the penalty assessed against Petitioner in this matter from 15% to 10%, which reduces the amount of the penalty to XXXXX. With respect to the additional penalty of XXXXX which was imposed for the late payment of the tax assessment, that penalty is waived, since the Petitioner had already taken steps to obtain a redetermination of the tax assessment at the time the penalty was imposed. Interest charges against the Petitioner are not waived, but will be recomputed in conformity with this decision. It is so ordered.

DATED this 5th day of September, 1991.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes*

Commissioner Commissioner

NOTICE: You have twenty (20) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. ''63‑46b‑13(1), 63‑46b‑14(2)(a).

*Since the hearing on this case, Commissioner G. Blaine Davis has been replaced by S. Blaine Willes. Commissioner Willes has been duly advised of the facts and circumstances regarding this case, and is qualified to sign this decision.

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