Signed 9/10/93





In Re:                            )


XXXXX,                            )    FINDINGS OF FACT,

                                  :    CONCLUSIONS OF LAW,

                                  )    AND FINAL DECISION


                                  )    Appeal No. 93-0748

                                  :    Account No. XXXXX




                             STATEMENT OF CASE

          This matter came before the Utah State Tax Commission for a formal hearing on XXXXX.  Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf of the Commission.  Present, by telephone, and representing the Petitioner was XXXXX.  Present and representing the Auditing Division were XXXXX and XXXXX.

          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 cigarette stamp tax.

          2.  The period in question is XXXXX.

          3.  On XXXXX, XXXXX, an auditor with the Auditing Division, conducted a cigarette stamp tax audit of XXXXX in Provo.

          4.  Mr. XXXXX found 92 packs of assorted brands of cigarettes which either did not have the cigarette stamp affixed to them or only had partial stamps affixed to them.

          5.  The Petitioner's representative testified that the Petitioner uses a Meyercord stamping machine to stamp its cigarettes.  The machine is very susceptible to malfunction if moved in any way.  During the period in question the machine had been moved at least three times due to construction work which had been taking place at the warehouse.

          6.  An inspection of the cartons of cigarettes involved showed that some packs of cigarettes would be stamped while others were not, and some packs had only partial stamps affixed to them.

          7.  This problem with the cigarette stamp tax was the first of its kind for Petitioner.

                            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

          In the present case, an examination of the cigarette packs in question corroborates the Petitioner's statement that a malfunctioning cigarette stamp machine caused the problems involved in this case.  Based upon that fact, and based upon the fact that the Petitioner has had no prior incidences of cigarette stamp violations, the Tax Commission finds that sufficient cause exists to waive the penalty associated for the XXXXX cigarette stamp inspection report which established a penalty of $$$$$.  It is so ordered.

          DATED this 10th day of September, 1993.



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 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(2)(a).