95-1543
Sales Tax
Signed 2/9/96
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioner, : ORDER
:
v. : Appeal No. 95-1543
:
AUDITING
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 was XXXXX.
Petitioner
is appealing the assessment of a penalty of $$$$$ relating to Petitioners sales
and use tax for the audit period of XXXXX through XXXXX. The penalty assessed was the 10% negligence
penalty based on the additional tax of $$$$$ assessed for the audit period.
Petitioner's
representatives explained that the largest portion of the additional tax
assessment related to fixed assets.
They asserted that although there had been prior audits with additional
assessments of taxes they never dealt with the same type of fixed assets. These fixed assets were determined to be
spare parts for an engine Petitioner was producing. A smaller portion dealt with supplies.
Petitioner's
representatives requested that the negligence penalty be waived because they
felt the error was substantially different from errors made in the prior audits
and that as a result of this audit Petitioner had established a number of
checks and balances to accurately determine and remit tax liability. Petitioner was not appealing the underlying
additional tax assessment or the interest.
Respondent
requested that the penalty be upheld.
Respondent asserted that the subject audit revealed that Petitioner had
made the same type of errors as the previous audit, that the percentage of deficiency
was high, 18% for the audit period, and it was not due to an unclear law or
rule. Respondent asserted that the
errors found in the subject audit were substantially similar to errors in the
previous audit, that they each dealt with the taxability and classification of
consumables.
APPLICABLE LAW
The
Tax Commission is granted the authority to waive, reduce, or compromise
penalties and interest upon a showing of reasonable cause. (Utah Code Ann. §59-1-401(10).)
DECISION AND ORDER
Based
upon the information presented at the hearing, and the records of the Tax
Commission, the Commission finds sufficient cause has not been shown to waive
the 10% negligence penalty of $$$$$
assessed relating to sales and use tax for the audit period of XXXXX through
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 9th day of February, 1996.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice
Shearer
Commissioner Commissioner
^^