98-0125

Miscellaneous Taxes

Signed 6/30/98

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

Petitioner, : DECISION

v. :

MOTOR VEHICLE ENFORCEMENT DIV.) Appeal No. 98-0125

UTAH STATE TAX COMMISSION, :

STATE OF UTAH, :

Respondent. : Tax Type: Miscellaneous Taxes

_____________________________________

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 April 20, 1998. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner were NAME, Attorney at Law, together with NAME. Present and representing Respondent were Ms. Michelle Bush, Assistant Attorney General, together with Mr. Kent Jorgensen, Mr. Kim Ingersoll, and Mr. Jack Kirk, from the Motor Vehicle Enforcement Division.

Based upon the evidence in the file and presented at the hearing, the Commission makes its:

FINDINGS

Petitioner is a licensed automobile dealer operating at ADDRESS, in CITY, Utah.

The primary business of Petitioner is to sell cars at retail to the general public, although Petitioner also sells some cars at wholesale to other automobile dealers.

Petitioner represented that most of his sales are at or close to low book value which is equivalent to wholesale pricing.

Petitioner has a large sign similar to a billboard at his business location which includes the words "save thousands, WHOLESALE PRICING FOR THE PUBLIC".

On December 24, 1997, Respondent sent a letter to Petitioner informing him that his advertising signs had been found in violation of Utah Code Ann. §41-3-210 and Rule R877-23V-7 as being deceptive advertising. That letter required him to remove the signage that was in violation immediately, and to pay a XXXXX first offense fine. Petitioner has appealed that determination.

Petitioner claims that the requirements of Respondent violate his right to equal protection of the law, and further constitutes selective enforcement. In support of his position, Petitioner presented several newspaper and telephone book advertisements by automobile dealers in the state, including some of the largest dealers with the highest volume sales which included the term "wholesale". Petitioner further represented that if he had some time, he could identify and provide examples of many other dealers that are violating the same provision by using the word "wholesale".

Respondent testified that they could not discuss the specific violations of the Code brought to its attention by the newspaper and telephone book ads provided by Petitioner. However, they did represent that everytime they become aware of a violation, they imposed a fine and required the offensive advertising to be changed.

APPLICABLE LAW

Utah Code Ann. §41-3-210, prohibits the holder of any license from intentionally publishing, displaying, or circulating any advertising that is misleading or inaccurate in any material fact.

Utah Administrative Code R877-23V-7(A)(4) provides that claims of savings may not be used in an advertisement, including "the word 'wholesale' may not be used in retail automobile advertising".

DECISION AND ORDER

The Tax Commission determines that Petitioner has violated the statute and rule as determined by Respondent, and further finds that the statute is not being selectively enforced. Petitioner's rights to equal protection under the law have not been violated. Accordingly, the Order issued by Respondent is affirmed, and Petitioner is ordered to remove the offending words from his automobile advertising within 60 days. The imposition of the XXXXX fine is also sustained. It is so ordered.

This Decision does not limit a party's right to a Formal Hearing. Any party to this case may file 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, UT 84134

Failure to request a Formal Hearing will preclude any further appeal rights in this matter.

DATED this 30 day of June, 1998.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

G. BLAINE DAVIS

Administrative Law Judge

The agency has reviewed this case and the undersigned concur in this decision.

DATED this 30 day of June, 1998.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Pam Hendrickson

Commissioner Commissioner