93-0751

Corporation Franchise

Signed 9/10/93

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

) Appeal No. 93-0751

: 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 and representing the Petitioner was 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 corporate franchise tax.

2. The period in question is XXXXX.

3. For the year prior to the year in question, the Petitioner had no corporate franchise tax liability with the exception of the $$$$$ minimum tax imposed.

4. For the year in question, the Petitioner did not expect to have a corporate franchise tax liability of $$$$$ or more.

5. For the year in question, the Petitioner had a $$$$$ corporate franchise liability. This was a result of a $$$$$ research and development expense which was not deducted in the year that it was incurred but instead, was capitalized over a several year period. Normally, the deduction would have been taken in the year that it was incurred. Had that been done, the Petitioner would have sustained a loss for the year and would have had no tax liability to the State of Utah.

6. A penalty in the amount of $$$$$ was assessed against the Petitioner because it did not make estimated tax payments as required by Utah Code Ann. '59-7-122.5.

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, the Petitioner did not have a tax liability of $$$$$ or more in the previous tax year, and did not reasonably expect to have a tax liability of $$$$$ or more in the year in question. Therefore, the Petitioner was not required to make estimated tax payments and consequently, no penalty should have been imposed for its failure to do so.

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a waiver of the penalty associated with the XXXXX corporate franchise tax return. It is so ordered.

DATED this 10th 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

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).

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