94-0609

Sales

Signed 5/25/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

XXXXX, :

Petitioner, : ORDER

:

v. : Appeal No. 94-0609

:

AUDITING DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Sales

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a Settlement Conference pursuant to the provisions of Utah Code Ann. §59-1-502.5, on XXXXX. Gail S. Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX. Present and representing Respondent was XXXXX of the Attorney General's Office.

This appeal results in disputed amounts of $$$$$ regarding an audit covering the period XXXXX through XXXXX. The issue is whether or not XXXXX in conjunction with the XXXXX XXXXX is incidental to the XXXXX.

The petitioner is a Utah based company functioning in the XXXXX. During the audit period, Petitioner XXXXX to XXXXX and XXXXX on a periodic basis. The XXXXX consists of XXXXX and removing the XXXXX. The petitioner would bill its clients for the XXXXX in a single item referred to as either XXXXX, the price normally being $$$$$ per month.

ANALYSIS

Utah Code Annotated §59-12-103(k) indicates that a tax is levied for leases and rentals of tangible personal property. In determining whether a XXXXX as a XXXXX, focus is on the primary purpose of the transaction, even though the XXXXX may include XXXXX. XXXXX in the instant case include XXXXX. XXXXX performed in conjunction with the XXXXX do not negate the taxable nature of the XXXXX. It must be noted in this regard that the XXXXX did not distinguish between the XXXXX and the XXXXX in the contract or the billing.

DECISION AND ORDER

Based upon the information at the hearing and in the record, the Commission finds that the disputed amount in issue is taxable as determined by Respondent.

This decision does not limit a party's right to a formal hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:

Utah State Tax Commission

Appeals Division

210 North 1950 West

Salt Lake City, Utah 84134

Failure to request a Formal Hearing will preclude any further administrative action or appeal rights in this matter.

DATED this 25th day of May, 1995.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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