BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
XXXXX, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
) AND FINAL DECISION
) Appeal No. 93-1437
: Account No. XXXXX
STATEMENT OF CASE
A settlement conference was scheduled in this matter on XXXXX, at 3:00 p.m. Alan Hennebold, Administrative Law Judge (ALJ), presided on behalf of the Utah State Tax Commission. XXXXX, General Counsel, and XXXXX, Controller, represented XXXXX. XXXXX and XXXXX, both of the Tax Commission's Collection Division, represented the Collection Division.
At the suggestion of the ALJ and with the consent of the parties, the settlement conference was converted to a formal hearing on the merits of XXXXX's appeal.
Based on the evidence presented at the hearing, the Commission hereby makes its:
FINDINGS OF FACT
1. XXXXX asks the Commission to waive a 10% late payment penalty assessed in connection with XXXXX's prepayment of sales tax for the second quarter of XXXXX.
2. XXXXX has been in business for many years. Its sales tax payments to Utah range upward of $$$$$ per quarter.
3. In XXXXX, XXXXX failed to prepay its second quarter sales tax liability. As a result, a 10% penalty of $$$$$ was assessed against it, which it paid.
4. In XXXXX, XXXXX again neglected to prepay its second quarter sales tax liability. Rather than making the prepayment when due on XXXXX, it mistakenly included the prepayment with its regular quarterly payment on XXXXX. It was again assessed a 10% penalty, this time in the amount of $$$$$. It is this penalty which XXXXX asks the Commission to set aside.
5. XXXXX explains that it failed to prepay its second quarter XXXXX sales tax because it did not receive a prepayment form from the Commission. Also, it was aware that the Utah Legislature had changed the sales tax reporting period from a quarterly to a monthly basis, effective XXXXX.
6. The Collection Division has reviewed its records and believes that the prepayment form was properly mailed to XXXXX.
CONCLUSIONS OF LAW
The penalty for failure to prepay sales tax is 10% of the tax not paid. (Utah Code Ann. '59-1-401(6), as in effect prior to July 1992.)
The Tax Commission may waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. '59-1-401(8).)
DECISION AND ORDER
XXXXX concedes that it was required to prepay its sales tax for the second quarter of XXXXX and that it failed to comply with the foregoing requirement.
XXXXX does not argue that the 10% penalty was improperly assessed against it. Instead, it argues that reasonable cause exists for the Commission to waive the penalty. In particular, XXXXX contends that it did not receive the prepayment form from the Commission and points out that the legislature had already acted to remove the prepayment requirement.
The Commission cannot determine whether XXXXX did or did not receive a prepayment report form. However, XXXXX is an experienced organization and is responsible for knowledge of tax filing requirements and deadlines. This is particularly true where, as here, a taxpayer has previously been penalized for failure to make the prepayment. As for legislative repeal of the prepayment requirement, such repeal was not effective until after the period in question.
Based on the foregoing, the Tax Commission finds that reasonable cause has not been shown to justify waiver of the penalty associated with XXXXX's prepayment of its second quarter XXXXX sales tax liability. XXXXX's waiver request is therefore denied. It is so ordered.
DATED this 2nd day of December, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer
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).