95-0393

Sales Tax

Signed 9/6/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, ) INFORMAL DECISION

:

v. )

:

AUDITING DIVISION OF THE ) Appeal No. 95-0393

UTAH STATE TAX COMMISSION, :

) Account No. XXXXX

:

Respondent. ) Tax Type: Sales

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings. An Informal Hearing was held 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 was XXXXX. Present and representing Respondent were XXXXX and XXXXX of the Auditing Division.

Based upon the evidence in the file and presented at the Informal Hearing, the Commission makes its:

FINDINGS

Penalties in the amount of $$$$$ and interest of approximately $$$$$ were assessed against Petitioner relating to items purchased in Utah for the audit period of XXXXX through XXXXX for which Petitioner did not pay Utah sales tax. The penalty was the $$$$$ penalty for intentional disregard of law or rule set out in Utah Code Ann. ' 59-1-401(5)(a)(ii). The underlying tax assessed by Respondent for these items was $$$$$.

It was Petitioner's position that he did not intentionally disregard the law, instead he just did not understand the law or know what he needed to do to comply.

At the hearing Petitioner explained that he had moved to Utah in XXXXX and was a Utah resident, but that he also had a residence in XXXXX. The items were vehicles that Petitioner purchased in Utah for use at his XXXXX residence. Since the vehicles had to be registered in XXXXX Petitioner states that he called and asked someone at the Department of Revenue in XXXXX whether or not he should pay sales tax to Utah or to XXXXX. Petitioner states that the person he spoke to told him to pay the tax to XXXXX. He stated that at that time he did not understand the sales tax law. When he buught the vehicles he told the sales person he would be using the items in XXXXX and the sales person who also did not understand the law had him fill out a Nonresident Affidavit then sold the vehicles to him tax free.

Later when Respondent pointed out the error to Petitioner, Petitioner paid the tax, interest and penalty to the State of Utah. He also wrote a letter to XXXXX who refunded to Petitioner the sales tax paid to XXXXX with interest.

Respondent's position was that Petitioner's signing the Nonresident Affidavits did indicate that Petitioner intentionally disregarded the law. Respondent also provided a copy of the Nonresident Affidavits which Petitioner had filled out, signed and had notarized. Respondent noted that the form specifically states "I am a nonresident of Utah," and Petitioner had given his XXXXX address. Petitioner also marked the "no" box indicating that he had not lived in Utah during the past 60 days and had written "No" to the question asking whether he had a secondary residence in Utah. Respondent stated that these misrepresentations indicated Petitioner had the necessary intent for assessment of the penalty. Respondent asserted that the interest should not be waived because the State of Utah was denied the benefit of the use of the funds and this benefit was given by Petitioner in error to the State of XXXXX. Respondent pointed out that XXXXX had refunded Petitioenr's tax payment with interest.

APPLICABLE LAW

Additional penalties for underpayment of tax are as follows: (ii) If any underpayment of tax is due to intentional disregard of law or rule, the penalty is 15% of the underpayment. (Utah Code Ann. '59-1-401(5)(a).)

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).)

DECISION AND ORDER

The Commission recognizes that it is not always easy for taxpayers to understand and comply with complicated tax laws. However, in this case in order to qualify for the emption the Petitioner filled out Nonresident Affidavits in which he misrepresented his residency status, indicating intentional disregard of the law.

The Tax Commission finds that the penalty of $$$$$ for intentional disregard of the law was properly and validly assessed and sufficient cause does not exist to waive of this penalty or the interest associated with the sales tax for the audit period of XXXXX through XXXXX.

DATED this 6 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

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 Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. '63-46b-15.)

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