Response
June 15, 1990
June
15, 1990
XXXXX
Re: Advisory Opinion - Mail Order Sales
Dear
XXXXX:
This
letter is in response to your May 25, 1990 request for an advisory opinion as
to whether your client, a mail order house located outside Utah, is required to
collect local use tax. It is the policy of the Tax Commission to refer such
requests to its division most qualified to analyze the request and make
recommendations for rendering an opinion. Your request was referred to the
Auditing Division whose recommendations are as follows:
1. We enclose a copy of 1990 Senate Bill No.
204, which subjects mail order houses to registration and collection of tax
regardless of the manner of solicitation or delivery.
2. It is our opinion that §59-12-204(3) ties
the local tax law to the state tax law, making collection of the local taxes a
requirement.
3. The collection of local tax is not complex
and should not carry burdens over and above the collection of the state tax.
The Tax Commission publishes a list of the combined tax rate by location. A
copy is attached.
4. Because of the design and use of sales and
use tax returns and the computer processing requirements at the Tax Commission,
failure to collect and remit the local taxes would create a distortion of the
taxes and impose a burden on the Tax Commission to have to manually process the
returns.
Form
TC71M, Schedule C requires a seller to categorize sales only by tax rate, not
by destination. More than 99 percent of sales would be at either 6 percent or
6-1/4 percent, making only two reporting categories necessary.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendation that your client is required to collect the local tax
as well as the state tax.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights is attached.
For
the Commission,
Joe
B. Pacheco
Commissioner
XXXXX
Managing
Auditor
Sales
and Use Tax Division
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah 84134
Re: Request for Advisory Opinion
Dear
XXXXX:
Our
client is an out-of-state, mail-order retailer who is not currently required to
pay or collect and remit the sales and use tax imposed by Utah Sales and Use
Tax Act ("Act") §59-12-103. Specifically, our client, either directly
or through an agent or other representative, does not, within the State, (1)
utilize an office, distribution house, sales house, warehouse, service
enterprise, or other place of business; (2) maintain a stock of goods; (3)
regularly solicit orders except those solicited solely by means of advertising
or direct mail solicitation; (4) regularly engage in the delivery of property
in Utah other than by common carrier or U.S. mail; or (5) regularly engage in
any activity in connection with the leasing or servicing of property located
within the State.
Although,
as indicated above, our client is not currently responsible for the collection
of use tax on shipments made to Utah destinations, our client has determined
that it will voluntarily register to collect use tax, pursuant to Act §59-12-103,
on shipments made to Utah destinations beginning with shipments made after June
1, 1990. However, Act §59-12-201 et seg. provides for the imposition of local
sales and use tax on Utah transactions that are subject to the sales and use
taxes imposed under Act §59-12-103. Although our client will voluntarily
register and collect sales and use tax pursuant to Act §59-12-103, our client
cannot, under the current statutory scheme, assess and collect local taxes
because of the complexity of the taxing scheme and the attendant administrative
burdens created as a result thereof.
In
view of the foregoing, we respectfully request an advisory opinion as to
whether our client will be is required to collect local sales and use tax,
pursuant to Act §59-12-201 et seg. on shipments delivered by common carrier or
U.S. Mail into Utah. Please direct your reply to the attention of the
undersigned.
Respectfully
requested,
XXXXX