91-1287 - Sales

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

: AND FINAL DECISION

: Appeal No. 91-1287

_____________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission. Present by telephone and representing the Petitioner was XXXXX, Owner.

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 and use tax.

2. The periods in question are the third and fourth quarters of XXXXX, all quarters of XXXXX, and all quarters of XXXXX.

3. On XXXXX, Petitioner filed his third quarter XXXXX sales tax return and paid $$$$$ in taxes. He did not pay the $$$$$ penalty and $$$$$ in interest.

4. On XXXXX, Petitioner filed his fourth quarter XXXXX sales tax return. On XXXXX, he paid his taxes in the amount of $$$$$. He did not pay the $$$$$ penalty and $$$$$ in interest.

5. On XXXXX, Petitioner filed his first quarter XXXXX sales tax return. On XXXXX, he paid his taxes in the amount of $$$$$. He did not pay the $$$$$ penalty and $$$$$ in interest.

6. On XXXXX, Petitioner filed his second quarter XXXXX sales tax return. On XXXXX, he paid his taxes in the amount of $$$$$. He did not pay the $$$$$ penalty and $$$$$ in interest.

7. On XXXXX, Petitioner filed his third quarter XXXXX sales tax return. On XXXXX, he paid his taxes in the amount of $$$$$. He did not pay the $$$$$ penalty and $$$$$ in interest.

8. On XXXXX, Petitioner filed his fourth quarter XXXXX sales tax return. He paid his taxes in the amount of XXXXX on XXXXX. He did not pay the $$$$$ penalty and $$$$$ in interest.

9. On XXXXX, Petitioner filed his first quarter XXXXX sales tax return. He paid his taxes in the amount of $$$$$ on XXXXX. He did not pay the $$$$$ penalty and $$$$$ in interest.

10. On XXXXX, Petitioner filed his second quarter XXXXX sales tax return. He paid his taxes in the amount of $$$$$ on XXXXX. He did not pay the $$$$$ penalty and $$$$$ in interest.

11. On XXXXX, Petitioner filed his third quarter XXXXX sales tax return. He paid his taxes in the amount of $$$$$ on XXXXX. He did not pay the $$$$$ penalty and $$$$$ in interest.

12. On XXXXX, Petitioner filed his fourth quarter XXXXX sales tax return. He paid his taxes in the amount of $$$$$ on XXXXX. He did not pay the $$$$$ penalty and $$$$$ in interest.

13. Petitioner bought XXXXX in XXXXX. He was a first time business owner.

14. The cost of the business was higher than anticipated. Petitioner had to "use the sales tax to pay the bills" or "close the doors".

15. Petitioner borrowed as much money as possible, but still could not make enough money to pay the sales tax over to the state. He had to choose between going out of business or paying his taxes.

16. Petitioner was late filing his returns because he did not understand that he was obligated to file returns even though he was not making payments.

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

Petitioner mistakenly concluded that the sales tax he collected from consumers was an available resource to pay business creditors. Collected sales tax belongs to the state. Petitioner never had a right to spend this money as if it was his own. He, in fact, was holding this money in trust on behalf of the state with the duty to forward it to the Tax Commission.

Petitioner's request is denied.

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 third and fourth quarters of XXXXX, all quarters of XXXXX and all quarters of XXXXX. It is so ordered.

DATED this 22nd day of January, 1992.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner