96-2093
Sales Tax
Signed
11/27/96
BEFORE
THE UTAH STATE TAX COMMISSION
____________________________________
XXXXX, )
:
Petitioner, ) ORDER
:
v. ) Appeal No. 96-2093
:
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 JosephXXXXX. Present and representing Respondent were
XXXXX, XXXXX and XXXXX.
Petitioner is appealing the assessment of
penalties totaling $$$$$ and interest of approximately $$$$$ relating to the
sales tax for the fourth quarter of 19YY.
Petitioner's representative explained that
Petitioner had contracted to have XXXXX process credit card funds Petitioner
received for payment of its product.
Petitioner sold computer equipment and in December 19YY, he started
allowing customers to purchase the equipment with their credit cards. Petitioner's representative assumed that
XXXXX was processing the payments and depositing the funds into Petitioner's
account and he wrote a check from this account to pay for the fourth quarter
sales tax. However, according to
Petitioner, XXXXX had been holding the credit card deposits and had held the
first credit card deposit for three weeks prior to notifying Petitioner that
Petitioner needed to provided additional information.
Since Petitioner was unaware that its funds
were being held its check to pay the tax at issue bounced. Petitioner submitted a cashiers check with a
letter explaining the problem to the Collection Division. However, apparently the cashiers check was
not immediately processed and sat in the file with the letter of explanation
for three weeks.
Petitioner was unable to obtain a letter from
XXXXX acknowledging that they held funds.
However, the relationship between Petitioner and XXXXX at this point is
such that any assistance from XXXXX in this matter is unlikely.
Respondent's representative had stated that
if Petitioner presented a letter from XXXXX, or from his bank which
substantiated the circumstances described by Petitioner, he would recommend
waiver of the penalty. However, since
no letter was presented his recommendation was that the penalty be upheld. He did recommend, however, that the portion
of the interest be waived that accrued from the time the Tax Commission
received Petitioner's cashiers check for payment, until the check was actually
processed about three weeks later. This was not a first time error for
Petitioner.
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 penalties relating to sales tax
for the fourth quarter 19YY. Sufficient
cause was shown to reduce the interest by the amount which accrued after the
Tax Commission received the replacement cashiers check, due to the error in not
immediately processing the check.
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 27 day of November, 1996.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Richard
B. McKeown
Chairman Commissioner
Joe B. Pacheco Alice Shearer
Commissioner Commissioner