BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No. 91-1580
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing by telephone on XXXXX. Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission. Representing the Petitioner were XXXXX, Vice-President of Administration and XXXXX, a certified public accountant; both of 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 and use tax.
2. The period in question is XXXXX through XXXXX.
3. Petitioner was audited for the period in question. As a result thereof, Petitioner was assessed an additional $$$$$ in taxes. A penalty in the amount of $$$$$ plus interest was also levied against Petitioner.
4. These additional assessments were largely based on tax exempt sales that Petitioner had made.
5. At the time of the audit, Petitioner was unable to produce tax exempt certificates or any other substantiating documents verifying the taxable status of each sale.
6. Petitioner was also audited for the period of XXXXX.
7. Petitioner claimed that at the close of the previous audit the state auditors never informed it that exemption certificates were necessary. This allegation was based on hearsay.
8. It has been Petitioner's practice to maintain a master list of those customers with exempt numbers. Petitioner did not obtain exemption certificates for exempt sales.
9. Petitioner did attempt to collect documents verifying the exempt sales for the period in question, however, this has not been successful.
CONCLUSIONS OF LAW
The Tax Commission is granted the authority to waive, reduce of compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann.59-1-401(8).)
Taxpayers selling tangible personal property or services to exempt customers are required to keep records verifying the nontaxable status of such sales. Records shall include: 12. exemption certificates for exempt sales of tangible personal property or services...(Utah Admin. CodeR865-19S-23(2A)(12).)
Further, the burden of proving that a sale is...exempt is upon the person who makes the sale. If any agent of the Tax Commission requests the vendor to produce a valid exemption certificate or other similar acceptable evidence to support the vendor's claim that a sale is..exempt, and the vendor is unable to comply, the sale will be considered taxable and the tax shall be payable by the vendor. (Utah Admin. CodeR865-19S-23(12)(1E).)
DECISION AND ORDER
Petitioner has not provided sufficient documentation to substantiate the tax exempt status of the sales in question. Further, Petitioner has not shown that it was in any way misinformed by the Tax Commission of the exemption certificate requirement.
After reviewing the applicable rule, the Tax Commission finds that it cannot grant Petitioner's request.
Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalties and interest associated with the period in question. It is so ordered.
DATED this 13 day of February, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes