Sales Tax

Signed 1/6/95






Petitioner, : ORDER


v. : Appeal No. 94-0614





Respondent. : Tax Type: Sales Tax



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. Joe B. Pacheco, Commissioner, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXX. Present and representing the Respondent were XXXXX, Auditing Division of the Utah State Tax Commission.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:


1. The tax in question is sales tax.

2. The period in question is XXXXX.

3. The past XXXXX for the Petitioner, XXXXX, stated that the company is no longer in business.

4. The Petitioner testified that when the company began operations, corporate officers had met numerous times with other corporate officials, and had made numerous telephone calls to the Utah State Tax Commission with regards to the taxability of the services that XXXXX was providing. The taxpayer felt that the information they received is contrary to the information that was given to them during the time of the audit. The Petitioner also testified that their outside XXXXX had also made numerous calls to the Tax Commission to determine the correct handling for the taxability of the services provided.

5. The company was in the business of XXXXX. The primary source of income for the company was the XXXXX. A secondary part of the business was the XXXXX provided.

6. The only item at issue in this case is the disallowance for exempt sales made by the Auditing Division during its audit for the audit period. Specifically, the Petitioner said that they paid sales tax on XXXXX but that tax had not been paid on the XXXXX, the XXXXX.

7. The Auditing Division of the Utah State Tax Commission relied on Utah Code Annotated 59-12-102 (7), the definition of purchase price. The "purchase price" means the amount paid or charged for tangible personal property or other taxable items or service under subSection 59-12-103(1) excluding only cash discounts taken or any excise tax imposed on the purchase price by the federal government. The Auditing Division stated that the charge for the XXXXX and that the tax applied to the entire sales price. In this case the Auditing Division made an assessment of what the Petitioner said was the exempt portion of the sale.

8. The amount of assessment in the aforementioned audit is $$$$$ less a payment that was applied of $$$$$ leaving a balance of $$$$$.

9. The calculation of the interest that was assessed in the audit in the amount of $$$$$ is not in dispute. However, petitioner is asking for a waiver of that amount.


Pursuant to Utah Code Annotated Section 59-12-104 and Administrative RuleR865-19S-23, the taxpayer is required to collect tax on the total amount charged for sales and for leases of tangible personal property made to its customers unless it can provide evidence to support its claim that the sale or lease is exempt.

The taxpayer is relying on telephone conversations it had with employees of the Utah State Tax Commission. This evidence is also corroborated by XXXXX, however the taxpayer inadvertently did not receive any written documentation from the Commission and can only testify that the information was received verbally from an employee. The taxpayer testifies that the business operated under compliance with all the instructions that were given to them.


Based upon the information presented at the conference, and the records of the Tax Commission, the Commission finds that the transactions entered into by the taxpayers are found to be taxable and that the Respondent's reliance on 59-12-102 and 59-12-106 together with Administrative RuleR865-19S-23 is the correct

application for these transactions. The Commission also finds that the request for the interest was properly applied and the request for the waiver of the interest is denied. It is so ordered.

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 6th day of January, 1995.


W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner