92-1112 - Corporate Franchise

BEFORE THE UTAH STATE TAX COMMISSION

__________________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

)

: Appeal No. 92-1112

) Account No. XXXXX

_________________________________

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. Representing Petitioner by telephone was XXXXX, tax manager for Petitioner.

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 corporate franchise tax.

2. The periods in question are the years XXXXX.

3. Petitioner filed and paid its corporate franchise tax for all of the years in question on XXXXX. Penalties and interest were also assessed on each year.

4. Petitioner is a defense contractor with many divisions countrywide.

5. The significant divisions of the corporation are located outside of Utah.

6. Petitioner maintains a field marketing office near an unnamed military base in Utah. This office employs two persons who basically solicit contracts and receive products shipped by Petitioner to the facility.

7. In XXXXX, Petitioner handled its taxes through its internal auditing division.

8. In XXXXX, Petitioner implemented a new separate tax department with experienced tax personnel. Tax manager XXXXX maintains this department.

9. Upon XXXXX arrival, the tax section began overhauling the tax records and learned that Petitioner had many field marketing offices in various states.

10. After months of research through records, XXXXX determined how to apportion tax obligations through the different field offices.

11. Petitioner then filed and paid its corporate franchise taxes in numerous states. According to XXXXX, many states have waived penalties since Petitioner came forward voluntarily.

12. Per Tax Commission records, Petitioner was never notified of delinquent taxes for the years in question prior to Petitioner's XXXXX filings and payments.

13. Petitioner is seeking a waiver of penalties, acknowledging its liability for interest.

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

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a reduction of the penalties for the years in question to $200.00. Interest is not waived. It is so ordered.

DATED this 20th day of August, 1992.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

ABSENT

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner