BEFORE THE UTAH STATE TAX
COMMISSION
___________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
) Appeal No.
92-1502
: 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, XXXXX Tax Manager. Present and
representing the Auditing Division 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 in question is special fuel tax.
2. The audit period in question is March XXXXX
through June XXXXX.
3. Petitioner is seeking a waiver of the ten
percent negligence penalty only.
4. As a result of the audit in question,
Petitioner was assessed an additional $$$$$ in special fuel tax.
5. This figure was derived from documentation
that showed that the reported miles traveled by renters was actually too low
when compared to highway road maps.
Further, the M.P.G. was changed from 10 M.P.G. to 9 M.P.G.
6. The major portion of the additional tax
assessment, however, accounts for fuelings Petitioner made to customers out of
bulk storage without taxation.
7. Petitioner had three or four bulk storage
sites in Utah at the time. When the fuel
was placed into the storage tanks, no tax was assessed. This fuel is referred
to as "dropped fuel". This
fuel was later taxed after it was taken out of storage and used in the
Petitioner's rental trucks. The amount
of tax is determined by dividing the amount of miles driven by the M.P.G.
8. In Petitioner's case, Petitioner did not
always receive mileage records from its customer/drivers whose trucks were
fueled with dropped fuel. Without this information, Petitioner claims it could
not calculate how much tax was owed.
9. According to Petitioner, most all of the
other states tax fuel as it is "dropped" for storage into the
ground. Petitioner is later credited
for miles driven as driver records are received.
10. When Petitioner computerized its fuel record
keeping at the start of XXXXX, Petitioner knew how much dropped fuel it had
dispensed and how much of it was not accounted for due to the lack of reported
miles driven by renters. According to Petitioner, there was no way to report
taxes because the highway mileage factor necessary to compute the tax was
nonexistent in their databank.
11. As a result of the audit in question,
Petitioner agreed to pay a certain amount of tax for this dispensed dropped
fuel that was unreported due to a lack of mileage records.
12. Petitioner argues that while the special
fuel tax audit revealed errors in reporting this tax, Petitioner had
successfully reported 99% of miles traveled and 97% of fuel usage.
13. Petitioner also contended that by not
collecting the special fuel tax up front when the fuel is initially dropped
into the ground, the state of Utah created a reporting fiasco. Petitioner claims Utah provided no mechanism
to report the dispensed dropped fuel that was unaccounted for in its renters'
drivers mileage logs.
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 waiver of the penalty associated with the special
fuel tax for the audit period in question.
IT IS SO ORDERED.
DATED
this 17th day of November, 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