BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
: INFORMAL DECISION
: Appeal No. 93-1605
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings. As provided for by Utah Code Ann. '63-46b-5, this decision is based upon information contained in the Tax Commission's file.
The Tax Commission assessed Petitioner penalties and interest for failing to make quarterly estimated tax payments for the tax year XXXXX. Upon review, the Commission later waived the penalty amounts.
Petitioner is seeking a waiver of the remaining interest charges of approximately $$$$$.
Petitioner had a tax liability of under $$$$$ for the year XXXXX.
In XXXXX, Petitioner calculated on a quarterly basis its estimated tax liability with the state for the year. In the third quarter, Petitioner started earning income sufficient to determine that it would have a tax liability exceeding $$$$$ for the entire year.
Petitioner then made three estimated tax payments, starting in XXXXX, for a total prepayment of $$$$$. Petitioner ultimately ended up owing $$$$$ in taxes for XXXXX.
Since Petitioner's total estimated tax payments exceeded the previous year's tax liability and also were more than 90% of the current year's taxes, Petitioner contends that it complied with Utah law.
DECISION AND ORDER
Utah Code Ann. '59-7-122.5 requires corporations expecting to have a tax liability of $$$$$ or more in the current tax year to make quarterly estimated tax payments.
In the present case, Petitioner's estimated tax payments were not paid on a quarterly basis as required. Hence, the penalties were initially assessed along with interest.
Utah Code Ann. '59-7-122.5 also provides that interest may be waived in circumstances where the total estimated tax payments for the tax year equal or exceed the tax liability for the previous year; the total estimated tax payments for the year are equal to 90% of the current year tax liability or the total estimated tax payments equal 90% of the tax liability computed on the current year's income using the previous year's tax law.
Based upon the foregoing, the Commission elects to also waive the interest assessment on the corporate franchise tax due on the year XXXXX. 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 the final order to file in District Court a petition for judicial review. Utah State Tax Commission Administrative Rule R861-5A-1(p) and Utah Code Ann. '63-46b-14(3)(a).