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