BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
XXXXX ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
: AND FINAL DECISION
: Appeal No. 91-0831
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, company controller.
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 use tax.
2. The periods in question are first through fourth quarters XXXXX; first, second and fourth quarters XXXXX; first through fourth quarters XXXXX; first through fourth quarters XXXXX; first through fourth quarters XXXXX; and, first, second and fourth quarters XXXXX. A 10% late filing penalty and 10% late payment penalty were both imposed with respect to first quarter XXXXX, third quarter XXXXX, fourth quarter XXXXX, fourth quarter XXXXX, third and fourth quarters XXXXX and first quarter XXXXX. In each of the other periods now in question, only a 10% late filing penalty or a minimum penalty was imposed.
3. Petitioner is a XXXXX company. Petitioner began doing business during XXXXX. Since then, it has purchased broadcast equipment to be placed in its customers' stores. Petitioner did not pay use tax on the equipment purchases because its officers were unaware the purchases were subject to tax.
4. During XXXXX, the company hired financial officers who recognized the taxability of the foregoing transactions. They reviewed the company's purchases back to its beginning, prepared the necessary tax report forms and submitted the reports to the Commission on XXXXX. The reports were accompanied by full payment of the tax due.
5. The Commission's Auditing Division has completed an audit of Petitioner from the period of XXXXX through XXXXX. As a result of that audit, additional sales tax of $$$$$ was assessed against Petitioner, together with penalty and interest. Petitioner has now filed an appeal of the audit. The items covered by the foregoing audit are unrelated to the items which are the subject of this appeal.
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 acknowledges its error in failing to file and pay its use tax liability during the periods in question. The only excuse presented by the Petitioner was its lack of expertise in tax matters. Such an excuse does not justify Petitioner's failure to report and pay use tax liability for the several years in question. However, the Petitioner's error is mitigated to some degree by the fact that the Petitioner discovered its error and took action to correct the error on its own initiative. The fact that a subsequent audit assessed additional sales tax against Petitioner does not appear to be material to the merits of this appeal.
Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which justifies a partial reduction of the penalty assessed against Petitioner's use tax liability for the periods in question. Such penalty will be reduced to 10% for those periods where both a 10% late filing and 10% late payment penalty has been imposed. Consequently, the penalty imposed for the first quarter XXXXX, third quarter XXXXX, fourth quarter XXXXX, fourth quarter XXXXX, third and fourth quarters XXXXX and first quarter XXXXX is hereby reduced from 20% to 10%. The penalty imposed with respect to the other periods now in question will remain unchanged. Interest is not waived but will be recomputed in accordance with this decision. It is so ordered.
DATED this 20th day of December, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes