98-1094
____________________________________
PETITIONER, :
: ORDER
Petitioner, :
: Appeal No.
98-1094
v. :
:
PROPERTY TAX
DIVISION OF : Tax Type: Property - Certified Tax
Rate
THE UTAH STATE
TAX )
COMMISSION, : Presiding: Richard B. McKeown
:
Respondent. :
_____________________________________
Presiding:
Richard B.
McKeown, Commissioner, with W. Val Oveson, Chairman, and Pam Hendrickson,
Commissioner
Appearances:
For
Petitioner: NAME
For
Respondent: Rod
Marrelli, Executive Director, Utah State Tax Commission
S. Blaine Willes, Director, Property Tax Division
David Vanier, Deputy Director, Property Tax Division
STATEMENT OF THE CASE
This
matter came before the Utah State Tax Commission ("Commission") for
an Initial Hearing pursuant to the provisions of Utah Code Ann. §59-1-502.5, on
July 2, 1998.
Prior
to June 22, 1998, PETITIONER ("PETITIONER") received official notice of its 1998 certified tax rate for
property taxation as calculated under Utah Code Ann. §59-2-924. Part of the calculation of this tax rate
included adjustments reflecting the changing revenues from uniform fees on
tangible personal property that an entity would experience in 1998 due to
recent specified legislation. Utah Code
Ann. §59-2-924(2)(c),(d) and (e).
Property
Tax Division ("Division") calculated and issued these uniform fee
adjustments for each entity to incorporate into that entity's certified tax
rate. The Division made these adjustments
based on the 1997 values for tangible personal property on which the uniform
fee was applied. As a consequence, the
Division's adjustments did not reflect any changes in 1998 uniform fee revenue
that would be caused by 1998 increases in the tangible personal property value.
The
PETITIONER petitions the Commission to modify the Division's uniform fee
adjustments to reflect changes in uniform fee revenue not only on tangible
personal property value that existed in 1997, but also on estimated increases
of tangible personal property value that will occur in 1998.
APPLICABLE LAW
Adjustments
to the certified tax rate because of changes in uniform fee revenues can be
found in Utah Code Ann. §59-2-924(2), pertinent subsections as follows:
(c) Beginning January
1, 1997, if a taxing entity receives increased revenues from uniform fees on
tangible personal property under Section 59-2-404 or 59-2-405 as a result of
any county imposing a sales and use tax under Title 59, Chapter 12, Part 11, County
Option Sales and Use Tax, the taxing entity shall decrease its certified tax
rate to offset the increased revenues.
(d) (I) Beginning July
1, 1997, if a county has imposed a sales and use tax under Title 59, Chapter
12, Part 11, County Option Sales and Use Tax, the county's certified tax rate
shall be:
...
(B) increased by the
amount necessary to offset the county's reduction in revenue from uniform fees
on tangible personal property under Section 59-2-404 or 59-2-405 as a result of
the decrease in the certified tax rate under Subsection (2)(d)(I)(A).
(ii) The commission
shall determine estimates of sales tax distributions for purposes of Subsection
(2)(d)(I).
(e)
For the calendar year beginning on January 1, 1998, and ending December 31,
1998, a taxing entity's certified tax rate shall be increased by the amount
necessary to offset the decrease in revenues from uniform fees on tangible
personal property under Section 59-2-405 as a result of the decrease in uniform
fees on tangible personal property under Section 59-2-405 enacted by the
Legislature during the 1997 Annual General Session.
DECISION AND ORDER
The
Commission believes that the language of the above subsections and that
legislative intent both require that the uniform fee adjustments also reflect
the estimated increases in value that will occur in 1998. Accordingly, the Commission orders the
Division to recompute the uniform fee adjustments it prepared in response to
the above subsections to also reflect the 1998 estimated increases in value.
For
the Division to recompute these adjustments, the Commission has determined that
a statewide growth factor of 12.42% (twelve and forty-two one-hundredths
percent) should reasonably estimate increases in value for 1998 for all taxing
entities, including the PETITIONER.
The Division should apply this statewide growth factor by multiplying it
with its previously computed uniform fee adjustments for all entities. By so doing and adding this product to the
original adjustments, the revised uniform fee adjustments should also reflect
changes in revenue associated with the new 1998 values.
After
the Division has revised the uniform fee adjustments in this manner, it should
calculate the certified tax rates for all taxing entities to reflect these revised
adjustments. Any taxing entity which
has already received its certified tax rate should be alerted of the change in
the calculation of its rate and allowed, at its option, to change its proposed
tax rate and amend its final budget, if necessary.
The
Commission wishes to point out that the affect of this ruling on the certified
tax rate of any taxing entity will be relatively immaterial. However, this ruling addresses the specific
question placed before the Commission by the PETITIONER in the manner that best
interprets the language and intent of the statute.
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 appeal rights in this
matter.
DATED
this 10 day of July, 1998.
Richard B. McKeown
Commissioner
BY ORDER OF THE UTAH STATE TAX COMMISSION.
The
Commission has reviewed this case and the undersigned concur in this decision.
DATED
this 10 day of July, 1998.
W. Val
Oveson Pam
Hendrickson
Chairman Commissioner
Joe B.
Pacheco
Commissioner
^^