95-0865

Property
Signed 12/7/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 95-0865

:

PROPERTY TAX DIVISION OF THE :

STATE TAX COMMISSION, :

STATE OF UTAH, :

Respondent. : Tax Type: Property

_____________________________________

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. Gail Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner by telephone was XXXXX. Present and representing Respondent was XXXXX, Assistant Attorney General.

This case involves the valuation of Petitioner’s rail cars in Utah for XXXXX. The rail cars were assessed at $$$$$. Respondent has recognized a clerical error and the parties have agreed to an adjustment in the valuation per car from $$$$$ to $$$$$. Based on this reduction, the value is $$$$$.

The remaining issue is one of allocation. Petitioner indicates that it does not find the weighted allocation of mileage and speed factor used by Utah to be wrong. In fact, Petitioner recognizes that it may be an appropriate method for most other taxpayers. Petitioner, however, claims that the application of the formula to Petitioner’s rail cars creates an inappropriate distortion. To alleviate the distortion, Petitioner suggests that the formula be applied to two classes of Petitioner’s rail cars separately, one class containing coal cars, the other class containing all other cars. According to Petitioner, this will prevent the coal car presence in Utah from being over-emphasized in the mileage percentage factor of the allocation formula. To support its position that application of the Utah formula creates a distortion, Petition focuses on formulas of other states which are different from Utah's formula and concludes that the resulting over-taxation is due to Utah's formula. Petitioner, nonetheless, agrees that if all of the states used the same weighted allocation of mileage and speed factors as Utah, there would be no issue of "double assessment" or "over-assessment."

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).)

DECISION AND ORDER

The Commission upholds the allocation method used and rejects the suggestion that the allocation formula should be applied differently in the instant case. Petitioner’s argument does not establish that the method of assessment used in Utah is unjust or inequitable.

Based upon the foregoing, the Tax Commission finds that the market value of the subject property for the XXXXX assessment year is $$$$$.

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 7th day of December, 1995.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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