92-1237 - Sales

BEFORE THE UTAH STATE TAX COMMISSION

_______________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX, ) AND FINAL DECISION

:

) Appeal No. 92-1237

: Account No. XXXXX

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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 and representing the Petitioner was XXXXX, former president and owner 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 periods in question are the last two quarters of XXXXX and the second quarter of XXXXX.

3. Petitioner paid sales and use tax late in each of the quarters in question. Ten percent late penalties assessed on each quarter.

4. Another ten percent late penalty was assessed for late filing in the third quarter of XXXXX. The filing was one day late.

5. XXXXX purchased the XXXXX franchise in question in XXXXX. This was XXXXX's first business venture.

6. Prior to the purchase, XXXXX researched other XXXXX franchises in determining whether or not to go into business.

7. Within six months of purchasing the franchise, the mother company, XXXXX, went into bankruptcy.

8. Petitioner regrouped with other XXXXX franchises in an effort to survive; however, the cost of parts alone severely affected their ability to continue business.

9. XXXXX also learned that her employees were repairing cars on company time and pocketing the money.

10. Further, despite training and incentive programs, Petitioner's managers constantly mismanaged the sales tax.

11. XXXXX began borrowing money from her own charge cards to cover business expenses, including the taxes.

12. Finally, XXXXX had to spend more and more time at Petitioner's location as manager turnover created a great deal of instability.

13. In the end, the high cost of parts, the inability to find a trustworthy manager and the lack of advertising caused XXXXX to sell the business at a substantial loss.

14. Petitioner submitted a waiver request of the penalties and interest. On XXXXX, the Commission denied the request. This decision was subsequently reconsidered and Petitioner was granted a 10% reduction of the total tax liability ($$$$$).

15. At this time, Petitioner requests a waiver of the remaining penalty and interest amounts.

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

Former owner XXXXX describes a business gone sour. Unfortunately for XXXXX, the outcome exacted a personal financial toll.

In this case, Petitioner must remember that the sales and use taxes Petitioner collected on behalf of the State never belonged to Petitioner in the first place. These taxes were not a source of funding to the business when cash-flow decreased.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a further reduction of the late payment penalties assessed on the sales and use tax owing on the quarters in question. Interest is not waived. It is so ordered.

DATED this 13 day of October, 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