91-1780
Special Fuel
Signed 4/14/93
BEFORE THE UTAH STATE TAX
COMMISSION
______________________________
XXXXX :
Petitioner, ) FINDINGS OF
FACT,
: CONCLUSIONS OF LAW,
v. ) AND FINAL DECISION
:
AUDITING
DIVISION OF THE ) Appeal No. 91‑1780
UTAH STATE TAX
COMMISSION, :
) Account No. XXXXX
Respondent.:
__________________________________
STATEMENT OF
CASE
This matter came before the Utah State
Tax Commission for a formal hearing on XXXXX.
Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf
of the Commission. Present, by
telephone, and representing the Petitioner were XXXXX and XXXXX. Present and representing the Respondent was
XXXXX, Assistant Utah Attorney General.
Based upon the evidence and testimony
presented at the hearing, the Tax Commission hereby makes its:
FINDINGS OF FACT
1.
The tax is question is special fuel tax.
2.
The audit period in question is XXXXX through XXXXX.
3.
The Petitioner is a trucking firm which operates out of XXXXX.
4.
During the period in question, the Petitioner filed its special fuel
user tax returns however, made errors in those returns. Specifically, the Petitioner took sales tax
credits for fuel taxes paid at the pump when, in fact, the purchases made at
the pump were done so without having the special fuel tax imposed.
5.
The deficiencies were brought to the Petitioner's attention by way of a statutory
notice dated XXXXX.
6.
During the audit period in question, the majority of states through
which the Petitioner traveled collected the special fuel tax at the pump and
allowed an offset for such purchases when filing the special fuel tax returns.
7.
The audit assessed a special fuel tax deficiency in the amount of $$$$$
and a penalty in the amount of $$$$$.
Interest was also assessed at the statutorily prescribed rate.
8.
The Petitioner admitted that the individual filing the returns had made
an error in allowing credits for fuel purchased in Utah. The Petitioner argued however that the error
was obvious and should not have gone unnoticed when the returns were
filed. Therefore, the Petitioner
argues, it is unfair to attempt to collect the deficiency at this late date.
CONCLUSIONS OF
LAW
An excise tax is imposed on the sale
or use of special fuel. The tax should
be collected and paid to the state by the user‑dealer in all cases where
the fuel is sold and delivered directly into the service tank of a motor
vehicle not owned or operated by a licensed special fuel user within the state
of Utah. Fuel sold and delivered into vehicles for which an exemption certificate
as provided in Utah Code Ann. '59‑13‑103
has been purchased is exempt for this tax. In all other cases, the tax shall be
paid by the user of such special fuel, and shall be computed on the number of
gallons used, which shall be based on the average number of miles per gallon
obtained by the user's vehicles divided into total miles traveled on the
highways of Utah by such vehicles.
(Utah State Tax Commission Admin. Rule R865‑2SF‑1, 1989.)
DECISION AND
ORDER
In the present case, neither party
questions the fact that the Petitioner had made an error when remitting the
special fuel user tax returns in question by claiming a $$$$$ credit for fuel
purchased in Utah. The Petitioner
argues, however, that the practice of purchasing special fuel ex‑tax at
the pump was peculiar to Utah and that in almost every other state it operated
in, the special fuel tax was collected at the time the fuel was purchased. Based upon that fact, and based upon the
fact that the error was not discovered until XXXXX, the Petitioner argued it
should be relieved from the deficiency assessment.
Although the special fuel tax
provisions of the Utah Code do not contain a specific time limitation provision
for assessment of the special fuels tax, the Commission, nevertheless, finds
that there is an implied three year statute of limitation on assessments of
special fuel tax. This determination is
based upon examination of other provisions of the special fuel tax provisions
of the code. Specifically Utah Code
Ann. '59‑13‑309
requires every user‑dealer to maintain complete records on all purchases,
sales, and inventories of special fuels for a minimum period of three
years. Obviously, such a requirement
would be inconsistent with a statute of limitations for a lesser period of
time.
Such a finding is also consistent with
'59‑13‑206(6) which deals with the
statute of limitations on motor fuel tax.
Under that section, there is an explicit three year statute of
limitation on proceedings to collect motor fuel tax. This three year statute of limitation is also consistent with
other provisions of the tax statutes which provide for a three year statute of
limitation for assessing taxes on individual income tax and sales and use tax.
(See Utah Code Ann. ''59‑10‑536
and 59‑12‑110.)
Based upon the foregoing, the Tax
Commission finds that the assessment was made within the requisite time
period. Therefore, the determination of
the Auditing Division to the extent that it assesses a special fuel tax
deficiency in the amount of $$$$$ is affirmed.
The Commission also finds, however, that under the facts and
circumstances of this case, the imposition of the $$$$$ penalty is
inappropriate and waives that portion of the audit assessment. Interest will be
imposed at the statutorily prescribed rate.
It is so ordered.
DATED this 14 day of April, 1993.
BY ORDER OF THE
UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Chairman Commissioner
Joe B. Pacheco S. Blaine Willes
Commissioner Commissioner
NOTICE: You
have twenty (20) days after the date of the final order to file a request for
reconsideration or thirty (30) days after the date of final order to file in
Supreme Court a petition for judicial review.
Utah Code Ann. ''63‑46b‑13(1),
63‑46b‑14(2)(a).
^^