97-0030

Self Insurers Premium

Signed 9/11/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

COMPANY C :

: ORDER

Petitioner, :

v. : Appeal No. 97-0030

CUSTOMER SERVICE DIVISION OF :

THE UTAH STATE TAX COMMISSION, :

: Tax Type: Self Insurers Premium

Respondent. :

_____________________________________

STATEMENT OF CASE

This matter came before the Utah Tax Commission by Petitioner's Motion for Summary Judgment filed on May 19, 1997. A Hearing on the Motion was held on July 8, 1997. Commissioners Joe Pacheco and Pam Hendrickson, along with Jane Phan, Administrative Law Judge, presided at the Hearing on behalf of the Tax Commission. Present and representing Petitioner was PETITIONERS REP., Esq., of XXXXX. Present and representing Respondent was Michelle Bush, Assistant Attorney General.

Petitioner requests summary judgment on the issue of the appropriate statute of limitations for requesting a refund of workers compensation self-insurers premium tax. The parties agree that a determination of the appropriate statue of limitations would resolve the outstanding issue in this appeal. If the applicable statute of limitations is found to be 3 years, then the parties agree that Petitioner is not entitled to a refund for the 1992 tax year and if the applicable statute is found to be 4 years, then the parties agree that Petitioner is entitled to a refund for the 1992 tax year.

The parties stipulated to the facts in this matter. In July 1996 Petitioner filed an Amended Self-Insurers Premium Tax Return for the 1991 and 1992 tax years along with a Request for Refund seeking a refund of self-insurers premium tax. On December 16, 1996, the Request for Refund for 1991 and 1992 was denied by Respondent. The basis for the denial was that the Request for Refund was not filed within the three year statute of limitations. For the 1991 tax year the request was filed beyond either the three or four year statute of limitations and Petitioner does not now contest the denial. This appeal involves only the Refund Request for the 1992 tax year. For 1992 Petitioner requested a refund in the amount of $$$$$ in tax, plus appropriate interest.

The issue presented to the Commission, the determination of the appropriate statute of limitations, is an issue of law. Petitioner argues that the applicable statute of limitations which applies is the four-year statute of limitations found at Utah Code Ann. §78-12-25. Utah Code Ann. §78-12-25 provides that an action may be brought within four years, "for relief not otherwise provided for by law." Petitioner points out that in the sections of the Utah Code which impose the self-insurers premium tax and filing requirements, there is no provision for a statute of limitations on requesting a refund. In fact, as Petitioner points, out there is no specific statutory provision that requires the Tax Commission to refund overpaid self-insurance premium tax.

Petitioner argues that under the principles of unjust enrichment, quantum meruit or implied contract, the Tax Commission would be required by a court of law to refund this overpayment. Petitioner argues that since there is no specif section dealing with the statute of limitations or for issuance of refunds the general four year statute of limitations was applicable.

Respondent argues that the applicable statute of limitations is the three year statute of limitations set out in Utah Code Ann. §78-12-26(4). That section provides that an action may be brought within three years for, "a liability created by the statutes of this state, other than for a penalty or forfeiture under the laws of this state, except where in special cases a different limitation is prescribed by the statutes of this state." Respondent argues that the refund request is based on the statutory obligation to pay the self-insurers premium tax and for this reason the three year statute of limitations should apply. Respondent explained that it has been the Auditing Division's policy to issue refunds of overpayment of the self-insurer premium tax if the refund requests are made within three years of the date that the tax is paid. Subsequent to the period in question the Utah Legislature adopted a provision that specifically articulates a three year statute of limitations. The new provision, Utah Code Ann. §59-9-106, became effective July 1, 1997.

In making this decision, since neither party sufficiently presented the legislative history, the Commission does not find the subsequent enactment by the Utah Legislature of a three year statute of limitation to be particularly indicative of the applicable statute of limitations in affect for the period at issue in this appeal.[i]¹

The Commission considers the decision issued by the Utah Court of Appeals in Stevenson v. Monson, 856 p.2d 355 (1993). In that case the taxpayer brought an action against Salt Lake County to recover property taxes paid under protest. There was no specific statute of limitations codified to recover illegally assessed and collected funds from the county. In that case the Court held that the general four-year statute of limitations applied. The Commission finds similarities between this case and the subject appeal in determining that the applicable statute of limitations is the four year statute of limitations set out in Utah Code Ann. §78-12-25.

DECISION AND ORDER

Based upon the foregoing, it is the order of the Utah State Tax Commission that summary judgment is granted in favor of Petitioner. Respondent is ordered to refund the $$$$$ in excess self-insurers premium tax along with appropriate interest for the tax year 1992.

DATED this 11 day of SEPTEMBER, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Pam Hendrickson

Commissioner Commissioner