95-0082
Sales Tax
Signed 9/12/95
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioner, : ORDER
:
v. : Appeal No. 95-0082
:
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 an Initial Hearing
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 by telephone conference call
were XXXXX and XXXXX. Present and
representing Respondent were XXXXX and XXXXX. Penalties in the amount of $$$$$
and interest of approximately $$$$$ were assessed against Petitioner resulting
from a transient room, sales and use tax audit for the audit period of XXXXX
through XXXXX. Petitioner is not
appealing the audit assessment of additional tax. Upon request for waiver of penalties and interest from the
Collection Division Waiver Unit the penalties were waived. Petitioner now appeals the interest. The underlying amount of additional tax
assessed for the audit period was approximately $$$$$.
At
the hearing representatives for Petitioner explained that the additional taxes
resulted from a period of time when the owners did not manage the hotel. They had engaged a management corporation
which had either misinterpreted or misapplied a change in the state law on
exempt room sales. The result was some
guests were permitted to stay without paying state taxes. They stated that Petitioner had discovered
the error during the audit period prior to receiving the audit results and had
begun correctly charging and paying over the taxes.
Petitioner's
representatives explained that since the taxes were not charged to the
customers, the funds for the payment of the additional assessment came out of
Petitioner's pocket. Further,
Petitioner's representatives stated that Petitioner had a history of timely
filing and paying monthly tax returns so the interest should be waived or
reduced.
Respondent
stated that the penalty had already been waived based on the circumstances
described by Petitioner's representatives.
Respondent explained that the only ground for waiver of interest is if a
Tax Commission error had a hand in creating the liability. Because Respondent felt that this error was
on the part of the Petitioner, Respondent would not recommend waiver of the
interest.
APPLICABLE LAW
The
Tax Commission is granted the authority to waive, reduce, or compromise
penalties and interest upon a showing of reasonable cause. (Utah Code Ann. §59-1-401(10).)
When
considering waiver of the interest the Tax Commission applies a stringent
reasonable cause standard because the
State of Utah was denied the benefit of the use of the funds from the time the
taxes were due until they were actually paid by Petitioner.
DECISION AND ORDER
Based
upon the information presented at the hearing, and the records of the Tax
Commission, the Commission finds sufficient cause has not been shown to waive
the approximately $$$$$ in interest assessed for the sales, use and transient
room tax audit for the period of XXXXX.
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 12th day of September, 1995.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice
Shearer
Commissioner Commissioner
^^