92-1504 - Motor Fuel

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

) Appeal No. 92-1504

: 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. Present and representing the Petitioner was XXXXX, owner. 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 period in question is April XXXXX through December XXXXX.

3. XXXXX, an attorney, purchased XXXXX in XXXXX upon moving here from XXXXX state.

4. The car wash included a gas station and convenience store.

5. Petitioner bought its diesel and gasoline from XXXXX XXXXX Company.

6. Mr. XXXXX spoke with XXXXX employees about how to handle the taxes on the fuel XXXXX purchased. According to Mr. XXXXX, the XXXXX employee in charge of XXXXX's account told him that XXXXX would take care of all of the taxes and filings of state fuel tax returns, etc.

7. Mr. XXXXX had never been in the business of selling gasoline and diesel fuel before.

8. When XXXXX made a delivery of diesel fuel, Petitioner would pay for the fuel at that time.

9. At some point later, XXXXX would send Petitioner an invoice for the fuel it had delivered.

10. During the time in question, Petitioner did not reconcile the invoices XXXXX sent with the documentation XXXXX provided at the time of delivery.

11. Of the forty or so XXXXX invoices Petitioner received during the period in question, at least two of the invoices itemized Utah state diesel fuel tax that Petitioner was charged. Copies of some of the other invoices do not show that XXXXX charged Petitioner for this same tax.

12. In June XXXXX, Petitioner received Utah State Tax Commission forms in the mail addressed to XXXXX, the previous owner. Without any thought concerning them, Petitioner simply forwarded these forms to XXXXX.

13. Unaware that Petitioner was supposed to collect special fuel tax on diesel dispensed at its pumps, Petitioner lowered its diesel fuel prices, thinking the tax had already been paid at time of delivery from XXXXX.

14. In June XXXXX, the Tax Commission contacted Petitioner about the special fuel tax returns and payments that Petitioner should have been sending into the state back in April XXXXX.
This was the first time Petitioner learned of its responsibility for reporting and remitting the taxes.

16. Petitioner claims that XXXXX has denied giving them misinformation.

17. Petitioner was assessed a 15% penalty for intentional disregard of the law and a 10% negligence penalty for failing to file.

18. The Auditing Division suggested that the 15% intentional disregard penalty be dropped to a 10% negligence penalty.

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 penalties assessed on the special fuel tax due on the quarters in question. Interest is not waived. It is so ordered.

DATED this 17th day of November, 1992.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

J. B. Pacheco S. Blaine Willes

Commissioner Commissioner