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
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner