96-2017

Sales Tax

Signed 10/7/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

Petitioner, : ORDER

v. : Appeal No.96-2017

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 MMDDYY. Jane Phan, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX. Present and representing Respondent were XXXXX, XXXXX and XXXXX.

Petitioner is appealing the assessment relating to Petitioner's sales Tax of penalties totaling $$$$$ and interest of approximately $$$$$ for the November 19YY filing period and penalties of $$$$$ with interest of approximately MMDDYY for the December 19YY filing period. For the November 19YY period both a %%%%% late filing penalty and a %%%%% late payment penalty were assessed. For the December 19YY filing, in addition to a 10% late filing penalty, a %%%%%% penalty was assessed because Petitioner did not pay the balance, consisting of the penalty and any interest which had then accrued, within thirty days of the notice from the Tax Commission.

Petitioner's representative explained that Petitioner was basically a seasonal business. Although it had some landscaping activities throughout the year the bulk of its income came from the sale of XXXXX trees. He explained that it was his understanding that Petitioner had just been changed from a quarterly filer to a monthly filer for the periods in question and they had not discovered this change until the first filing was late. He felt that because they had just been switched to monthly filers they should be considered first time filers and this should be reasonable cause for waiver of the penalties. He based this in the Internal Revenue Services's reasonable cause guidelines and asserted that State of Utah's reasonable cause guidelines mirrored those set out by the IRS.

Another representative of Petitioner, in the letter requesting this appeal, indicated that Petitioner had not received the monthly return for the December 19YY period so finally had to use a photocopy of the November return.

Respondent's representatives stated that the November 19YY return was filed on MMDDYY, with a partial payment of $$$$$. The remaining balance was not paid until MMDDYY. The MMDDYY return was filed and paid on MMDDYY, twelve days late. Respondent's representative explained that this was not a situation of first time filing because Petitioner had been switched to a monthly filer in July of 19YY and had been filing timely $$$$$ returns until the first late period which was November 19YY. Respondent pointed out that this was the first period since monthly returns were required that there was a Tax liability. To her this indicated the filing was not made timely due to financial hardship and did not qualify as a first time filing error. Petitioner pointed out that for the November 19YY filing Petitioner had paid all it would owe after taking into account the vendor discount. Respondent's representatives pointed out that Petitioner was not entitled to the vendor discount because the filing was late and that Petitioner had significantly overestimated the amount of the vendor discount.

Respondent's representative explained that the fact that they may not have had the return for the December 19YY filing did not excuse timely filing. She explained that Petitioner could have asked that a blank return be faxed or could have picked one up at the Tax Commission. She pointed out that sales Tax liability is part of the trust tax and Petitioner is responsible for timely remittance to the Tax Commission.

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

After reviewing the information presented, the Commission determines that although the error made by Petitioner for the November 19YY period will not be excused as a first time filing error, it was the first monthly filing with a significant Tax liability and for that reason sufficient cause was shown to reduce the penalty to a single 10% late filing penalty. For the December 19YY period Petitioner's late filing is not excused by the fact that it did not have the monthly return. However, the circumstances present sufficient cause for reducing the penalty to a single %%%%% late filing penalty.

Based upon the information presented at the hearing, and the records of the Tax Commission, the Commission finds sufficient cause been shown to reduce the penalties relating to Petitioner's sales Tax for November 19YY to $$$$$ and for December 19YY to $$$$$. Sufficient cause was not shown for waiver of the interest.

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 October, 1996.

BY ORDER OF THE UTAH STATE Tax COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner