93-0247 CORPORATE FRANCHISE

 

 

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

) Appeal No. 93-0247

:

) 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 was XXXXX, Petitioner's tax attorney.

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 period in question is Petitioner's fiscal year ending July XXXXX.

3. Petitioner's tax liability for the year ending XXXXX was ($$$$). For the year ending XXXXX, Petitioner's tax liability was ($$$$).

4. For the year in question, Petitioner timely filed an extension request on XXXXX and included a pre-payment of ($$$$) as this was the total amount Petitioner owed for the previous year. Petitioner then filed and paid timely in XXXXX.

5. The Tax Commission assessed Petitioner a penalty for failing to pay estimated quarterly payments throughout the year in question. This penalty was later reduced to ($$$$).

6. Petitioner is requesting a waiver of this remaining penalty amount. Interest is not at issue.

7. Petitioner contends that it was not required to make the estimated quarterly payments for XXXXX as its previous year's tax liability was under ($$$$). Further, Petitioner argues that it met the extension pre-payment requirement when it paid the full tax liability for the previous year at the time of the request.

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).)

Relevant Utah law states the following:

(1) Every corporation subject to taxation under this chapter expecting to have a tax liability of $3,000 or more in the current year, or which had a tax liability of $3,000 or more in the previous tax year, shall make payments of estimated tax in the same manner as is provided for corporations in the Internal Revenue Code of 1954, or successor statutes.

(2) If a quarterly estimated tax payment is not made or is underpaid, except as provided in Subsection (3), there shall be added a penalty as provided in Section 59-1-401 and interest as provided in Section 59-1-402.

(3) The penalty or interest may be waived under Subsection (2), if:

(a) the total estimated tax payments for the tax year equal or exceed the tax liability of the previous tax year;

(b) the total estimated tax payments for the tax year are equal to 90% of the current year tax liability; or

(c) the total estimated tax payments equal 90% of the tax liability computed on the current year's income using the previous year's tax law. (Utah Code Ann. 59-7-122.5)

DECISION AND ORDER

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a waiver of the remaining penalty associated with the corporate franchise tax due on the year ending XXXXX. Interest is not at issue and, in fact, is deemed paid in full at this time. It is so ordered.

DATED this 22ND day of SEPTEMBER, 1993.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner