BEFORE THE UTAH STATE TAX COMMISSION
: ORDER GRANTING
Petitioner, ) RESPONDENT'S MOTION
: FOR SUMMARY JUDGMENT
AUDITING DIVISION OF THE ) Appeal No. 92-2359
UTAH STATE TAX COMMISSION, :
) Account No. XXXXX
STATEMENT OF CASE
On XXXXX, Respondent issued a Statutory Notice to Petitioner for the audit period October XXXXX-September XXXXX, alleging, in part, a sales and use tax deficiency in Petitioner's account in the amount of $$$$$ with $$$$$ in interest and $$$$$ in penalty.
Petitioner thereafter filed a petition for redetermination, claiming that the purchases in question were exempt from tax pursuant to Utah Code Ann. '59-12-104(11) and Utah Admin. Rule R865-19-83S dealing with pollution control facilities.
At the formal hearing in this matter held on XXXXX, the administrative law judge continued this case without further date, requesting the parties to submit legal briefing on the relevant statutes and rules.
Respondent, in submitting its brief, also motioned for summary judgment in this case. Petitioner, on the other hand, requests that this case be stayed pending final determination from the Department of Environmental Quality ("DEQ") on the crucial certification issue.
STATEMENT OF FACTS
XXXXX ("XXXXX") owns and operates a waste management facility known as the XXXXX facility.
XXXXX did not pay sales tax on any of the purchases in question (as found in the audit referred to above) relating to the XXXXX facility.
XXXXX contemplated that XXXXX would eventually certify XXXXX as a pollution control facility, thereby granting these purchases tax exempt status under the code sections previously cited in addition to Utah Code Ann. ''19-2-101(11a) and 19-2-123.
Petitioner applied to XXXXX for certification of XXXXX as a pollution control facility in XXXXX. To date, however, Petitioner is still involved in a prolonged certification process.
As a result, Petitioner is unable to provide the Auditing Division an accounting of certification, partial or full, to which a dollar amount/breakdown can be surmised.
At this time, the audit deficiency amount remains as it was originally assessed.
CONCLUSIONS OF LAW
Utah Code Ann. '59-12-104(11) states:
The following sales and uses are exempt. . .
(11) sales or use of property, materials, or services used in the construction of or incorporated in pollution control facilities allowed by Sections 19-2-123 through 19-2-127;
Utah Code Ann. '19-2-123(2) states:
(2) All materials and equipment purchased, leased, or otherwise procured and services utilized for the construction or installation in a pollution control facility are exempt from sales and use taxes imposed by Chapter 12, Title 59, Sales and Use Tax Act, upon obtaining a certification of pollution control facility from the board.
Utah Administrative Rule R865-19-83(S)(A) and (A1) further dictates:
A. Since certification of a pollution control facility may not occur until a firm contract has been entered into or construction has begun, tax should be paid on all purchases of tangible personal property or taxable services that become part of a pollution control facility until the facility is certified, and invoices and records should be retained to show the amount of tax paid. Upon verification of the amount of tax paid for pollution control facilities and verification that a certificate has been obtained, the Tax Commission will refund the taxes paid on these purchases.
1. Claims for refund of tax paid prior to certification must be filed within 180 days after certification of a facility. Refund claims filed within this time period will have interest added at the rate prescribed in Section 59-1-402 from the date of the overpayment.
Based upon the facts as stated above and the briefs submitted by the parties concerning the applicable code sections, the Commission determines that Petitioner is obligated under the law to pay forthwith the tax on the purchases at issue in the above-referenced audit.
Petitioner may request the appropriate refund when and if DEQ certifies the pollution control facility for tax exemption.
Petitioner's argument that the better course of action would be for the Tax Commission to afford Petitioner the time to complete the certification process at DEQ before requiring the taxes, if any, to be paid is rejected.
Petitioner's case at DEQ is now in its fourth year. Rather than compel the Auditing Division to stay abreast of Petitioner's application process at DEQ and concern itself with matters involving another agency, the law provides for the payment of taxes on purchases up front. This procedure motivates the petitioner to ardently pursue certification. It also reduces the potential for abuse.
Respondent's Motion for Summary Judgment is hereby granted. Petitioner's request to stay these proceedings until completion of the certification process at denied.
The audit deficiency is due at this time.
DATED this 1 day of September, 1994.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer
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(3)(a).