Signed 5/24/94







                                 )  CONCLUSIONS OF LAW,

          Petitioner,            :  AND FINAL DECISION


v.                               :


XXXXX                            :  Appeal Nos. 93-1408

XXXXX,                           )  through 93-1409

          Respondent.            :  License Nos. XXXXX




                             STATEMENT OF CASE

          This matter came before the Utah State Tax Commission pursuant to a petition by the Collection Division of the Utah State Tax Commission for the revocation of license numbers XXXXX and XXXXX for failure to comply with the laws of the state of Utah.

          A Formal Hearing on the matter was held on XXXXX.  Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission.  Present and representing the Petitioner was attorney XXXXX.  Present and representing the Respondent was Assistant Attorney General 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 sales tax.

          2.  Two sales and use tax licenses in question are: XXXXX issued to XXXXX XXXXX and XXXXX issued to XXXXX.

          3.  These entities are two separate corporations.  According to Tax Commission records, the last return filed under XXXXX was for the last quarter XXXXX.  The first return filed under XXXXX was for the second quarter XXXXX.  All subsequent filings to the present have been under XXXXX.

          4.  XXXXX, the owner of the two businesses, explained that he is in the XXXXX building business.  He sells XXXXX materials for the construction of XXXXX buildings.

          5.  With a re-structuring of the business, Mr. XXXXX now operates as XXXXX.

          6.  Both the Collection Division and Mr. XXXXX stipulated to the tax, penalty and interest amount due in this case which is approximately $$$$$.

          7.  The Collection Division is requesting that the two licenses in question be revoked for Respondents' failure to comply with the sales and use tax code requiring remittance of taxes on a quarterly basis. 

          8.  A review of the sales and use tax account histories in question shows that both corporations filed timely in nearly every instance.  The problem is, and has been, that the corporations fail to timely pay the tax due with the filed returns.

          9.  On account XXXXX for the period XXXXX-XXXXX (8 quarters), Respondent bounced seven checks.  The first three quarters of XXXXX were paid in full in XXXXX.  The next two quarters were paid on time.  Then, the second quarter of XXXXX wasn't paid until the end of XXXXX.  The third quarter of XXXXX is still outstanding ($$$$$).  The fourth quarter of XXXXX was paid in full on XXXXX.

          10.  On account XXXXX for the period XXXXX-XXXXX (7 quarters), Respondent bounced five checks.  No tax was due for the second, third and fourth quarters of XXXXX.  For the first quarter of XXXXX, Respondent paid the taxes due on XXXXX.  The taxes due for the second quarter of XXXXX are still owing ($$$$$).  Respondent also owes $$$$$ for the third quarter of XXXXX and $$$$$ for the last quarter of XXXXX.

          11.  The account histories for both sales tax licenses show that Mr. XXXXX habitually sends the sales tax returns on time with a bad check. 

          12.  According to tax compliance agent XXXXX who has been assigned to these accounts off and on since XXXXX, Mr. XXXXX eventually pays on the accounts after a number of months, unfulfilled payment arrangements and numerous appointments pass by.  The continuing late payments following returned checks is a pattern repeated over and over by Mr. XXXXX.

          13.  Mr. XXXXX did not dispute the fact that he has a poor payment history as far as timeliness is concerned.  He explained that his cashflow problems are directly related to the type of business he operates. 

          14.  Mr. XXXXX sells his goods to contractors who are supposed to pay him at the completion of a job. If the contractor fails to pay, then Mr. XXXXX cannot pay his liabilities, including Respondents' taxes.

          15.  Mr. XXXXX reports that he owes taxes on Respondents' filed returns because he has, in fact, sold goods to another.  The fact that he reports the sales on the returns, however, does not mean that he has been paid.  Respondent must wait until the contractor pays him.  Hence, if there is any holdup in receiving money due him from a contractor, Respondent gets further behind in meeting tax obligations.

          16.  Mr. XXXXX stated that he lost $$$$$ on two different jobs in XXXXX; contractors walk out on jobs without paying him.  He is awaiting the possible arbitration of another case this summer.

          17.  In his defense, Mr. XXXXX stated that he knows he owes the taxes and reports the liability honestly every quarter.  Although he is always playing catch-up, he eventually does pay off the delinquency amounts.

                            CONCLUSIONS OF LAW

          The Tax Commission shall revoke the license of any person violating any provisions of the Sales Tax Act.  (Utah Code Ann. '59-11-106(1).)

                            DECISION AND ORDER

          The Tax Commission finds sufficient cause exists for the revocation of license numbers XXXXX and XXXXX.  Therefore, it is the order of the Utah State Tax Commission that these license numbers are hereby revoked for failure to comply with the laws of the State of Utah and the petition is granted.

          DATED this 24th day of May, 1994.


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(3)(a).