94-1369

Sales Tax

Signed 7/5/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

Petitioner, : ORDER

v. : Appeal No. 94-1369

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

Respondent. : Tax Type: Sales Tax

_____________________________________

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. Jane Phan, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner were XXXXX. Present and representing Respondent was XXXXX.

Penalties totalling $$$$$ and interest of approximately $$$$$ were assessed against Petitioner relating to sales tax for the XXXXX filing period. Petitioner had requested waiver of the penalties and interest from the Collection Division Waiver Unit which was denied. The underlying amount of sales tax owed for this period was $$$$$.

At the conference Petitioner's representatives explained that the payment had been made by electronic funds transfer (EFT), just XXXXX late, because the XXXXX who was in charge of all tax payments become XXXXX, was XXXXX and other XXXXX. A XXXXX from this XXXXX was provided by Petitioner. As soon as the Petitioner discovered the oversight the payment was made. Petitioner felt that the amount of the penalties and interest were excessive compared to the short period of time that the payment was late.

Respondent explained that there had been two separate penalties assessed, a XXXXX late payment penalty and a XXXXX XXXXX penalty. Respondent stated that the error was caught and corrected by the Petitioner XXXXX late, prior to any action on the part of the Tax Commission, and recommended waiving the XXXXX penalty. Respondent explained that the penalties resulting from a late EFT payment were very strict and could be validly assessed if the EFT payment was only XXXXX late. Respondent pointed out that the XXXXX occurred in XXXXX, prior to the due date of the payment at issue. Further, Respondent stated that Petitioner's account history indicated XXXXX payments of sales tax in XXXXX. For these reasons Respondent would not recommend waiving the late payment penalty. Respondent stated that Petitioner's account history did not indicate any other late sales tax payments.

Petioner explained the XXXXX payments in XXXXX referred to by Respondent resulted from a XXXXX the Petitioner's XXXXX all sales records. Petitioner explained that upon an appeal to the Commission the XXXXX had been waived because of the XXXXX.

In considering Petitioner's request for waiver or reduction of the interest the Tax Commission applies stringent reasonable cause guidelines because Petitioner continued to enjoy the benefit of the use funds and the State of Utah was denied the benefit of the use of the funds from the time the underlying taxes were due until they were actually paid by Petitioner.

DECISION AND ORDER

The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. §59-1-401(10).)

Based upon the information presented at the conference, and the records of the Tax Commission, the Commission finds sufficient cause has been shown to waive the penalties of $$$$$ assessed relating to sales tax for the XXXXX filing period. Sufficient cause has not been shown to waive the interest.

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 5th day of July, 1995.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner