95-0274

INTEREST ON REFUND

SIGNED 1/14/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

COMPANY A, )

Petitioner, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. ) AND FINAL DECISION

CUSTOMER SERVICE DIVISION OF ) Appeal No. 95-0274

THE STATE TAX COMMISSION, :

STATE OF UTAH, )

Respondent. ) Tax Type: Interest on Refund

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a Formal Hearing on September 9, 1996. Gail S. Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was PETITIONER REP., Attorney at Law. Present and representing Respondent was XXXXX, Assistant Attorney General.

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

FINDINGS OF FACT

1. Company A is a consumer of petroleum products that are subject to the Environmental Surcharge imposed by Utah Code Annotated '19-6-401.

2. Petitioner paid $$$$$ in Environmental Surcharges from April, 1991 through December, 1994.

3. Petitioner is required to either pay the applicable Environmental Surcharge Tax on all petroleum products it purchases at the time and point of purchase or qualify for and apply for an exemption certificate to exempt such purchases from the surcharge. 4. Parties other than the Petitioner collect and report the Environmental Surcharge to the Tax Commission.

5. In January, 1995, Petitioner filed Form TC-113 entitled AEnvironmental Surcharge Refund Application@ for all quarterly periods beginning April, 1991 and ending December, 1994.

6. Having paid the Environmental Surcharge Tax, the Respondent determined that Petitioner was statutorily entitled to apply for and receive a refund of all Environmental Surcharge Taxes paid during all quarters between 1991 through 1994.

7. Respondent approved Petitioner=s refund requests on or about February 6, 1995, and began processing the refund. All refunds were received within 90 days of the date that Company A

applications were filed.

8. All requested refunds have been processed and issued to the Petitioner, but interest was not paid on the refunded amounts.

9. Petitioner requests interest on the refunded amounts. Respondent has denied all requests for interest on the refunded amounts.

ANALYSIS

Respondent=s argument is based on Utah Code Annotated '59-1-402(4)(a) and (b):

(a) If any overpayment of tax or fee administered

by the commission is refunded within 90 days

after the last date prescribed for filing the

return of such tax or fee, no interest shall be

allowed on the overpayment.

(b) If the return is filed after the last date

prescribed for filing the return, no interest

shall be allowed on the overpayment if the over-

payment is refunded within 90 days after the

date the return is filed.

It is Respondent=s position that the request for refund is tantamount to the filing of a Areturn@ and since payment was within 90 days of that filing, no interest is due. In this respect, Respondent likens the situation to that of an individual filing an income tax return, which requires a refund. The Commission finds that the comparison is inappropriate.

This instant matter, as pointed out by Petitioner, has been addressed in Tax Bulletin 22-95, in which the Commission has explained that:

A. . .If an overpayment is generated as a result

of an amended return or a letter request for

refund, interest shall accrue from the later of

the date the original return was due or filed to

the date the amended return or letter request for

refund is received by the Tax Commission. If

the overpayment is not refunded within 90 days

from the Tax Commission=s receipt of the amended

return or letter request for refund, additional

interest shall be calculated beginning on the

91st day after the Tax Commission=s receipt

of the amended return or letter request for

refund. . .@ [emphasis added]

The request for a refund in this case clearly falls within the language of the bulletin referring to Aa letter request for refund@, with the initial reporting and payment of the

Surcharge Tax being the Aoriginal return.@

Since the surcharges for the last quarter of 1994 were not Adue@ until the end of January, 1995, COMPANY A's refund application, filed prior to that time, would render the due date, rather than the filing date, the relevant time frame for that quarter. Since the request for refund was filed prior to the due date of the original return, and the refund was timely, no interest would be involved for that quarter.

DECISION AND ORDER

Based upon the foregoing, the Tax Commission finds that Petitioner is entitled to interest for the periods in issue, with no interest being due for the last quarter of 1994. It is so ordered.

DATED this 14 day of January , 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

NOTICE: You have twenty (20) days after the date of a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a.)