93-0415

Sales

Signed 9/2/94

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX )

XXXXX, :

Petitioner, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. ) AND FINAL DECISION

:

AUDITING DIVISION OF THE ) Appeal No. 93-0415

UTAH STATE TAX COMMISSION, :

) Account No. XXXXX

:

Respondent. ) Tax Type: Sales & Use

_____________________________________

STATEMENT OF CASE

This singular issue on the above-entitled matter came before the Utah State Tax Commission on written submissions from which the parties have requested that a decision be issued.

1. The tax in question is sales and use tax for the audit period from XXXXX, through XXXXX.

2. The Petitioner accrued and paid sales tax on tangible personal property.

3. The invoice which forms the basis of this dispute lists four amounts to be paid by Petitioner for repair services: 1) the sum of $$$$$ for calibration services; 2) the sum of $$$$$ for cables; 3) the sum of $$$$$ for a switch; and 4) the sum of $$$$$ for the reimbursement of travel expenses.

APPLICABLE LAW

Utah State Tax Commission Administrative Rule R865-19-78S-1A states:

Persons who wash, clean, repair or renovate tangible personal property. . .are required to collect sales tax upon the total charge of the rendition of such service.

ANALYSIS

The issue in this case is whether or not the amount calling for reimbursement of travel expenses is subject to Utah sales and use tax. The Respondent argued that the Petitioner is liable for the sales tax on the total charge made for the rendition of repair or renovation services. According to Respondent, when the total charge includes travel expenses, these travel expenses are properly taxable. Petitioner, however, submits that reimbursement for travel expense is not a "charge" as contemplated by the rule, since the reimbursement portion of the invoice was an identifiable portion and segregated from the repair charges.

CONCLUSION

After a thorough review of the entire record and the arguments presented in written submissions, the Tax Commission finds that the reimbursement for travel expenses clearly comprise a portion of the "total charge" and therefore are subject to sales tax.

The Auditing Division assessed a 10% penalty against Petitioner because the audit revealed errors which had been brought to Petitioner's attention in an earlier audit. Sufficient cause has not been shown to waive the penalty in the case.

DATED this 2nd day of September, 1994.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

NOTICE: You have twenty (20) days after the date of a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a.) a Petition for Judicial Review in the Supreme Court, or b.) a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1-5A(P) and Utah Code Ann. ''59-1-601(1), 63-46b-13(1), 63-46-14(3)(a).)

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