BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No. 91-0686
: 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 by telephone were XXXXX 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 prepayment of sales and use tax.
2. The period in question is the second quarter of XXXXX.
3. The Petitioner is engaged in the XXXXX in Utah. By virtue of Utah's Resource Development Act (Utah Code Ann. §63-51-1 et seq.), the Petitioner enjoyed a credit against future sales and use tax liability in the approximate amount of $$$$$ as of XXXXX.
4. During the second quarter of XXXXX, the Petitioner accrued sales and use tax liability of $$$$$.
5. The Petitioner failed to file a sales tax prepayment return for XXXXX and XXXXX as required by Utah Code Ann. §59-12-108. The Petitioner did not believe it was required to do so in view of the fact that its credit at that time was many times larger than its tax liability. The Petitioner explains that it had filed prepayment returns in previous years under similar circumstances but had not believed such filings were actually required.
6. Because the Petitioner did not file its prepayment return for the period in question, Commission staff assessed penalty in the amount of $$$$$ and interest of $$$$$ against it.
7. The Petitioner did file its regular quarterly sales and use tax return for XXXXX in a timely fashion.
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
The Petitioner's belief that it need not file a prepayment return for the period in question was incorrect. However, under the facts of this case, such a return would have been informational only inasmuch as Petitioner had already satisfied its tax liability. For that same reason, interest charges cannot properly be assessed against the Petitioner.
While the Petitioner will be expected to file prepayment returns in the future, the Commission finds reasonable cause has been shown to justify a waiver of the penalty and interest associated with the Petitioner's sales tax liability for the second quarter XXXXX. It is so ordered.
DATED this 12th day of November, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes