Responses June 10, 1991 and December 28, 1990
June
10, 1991
XXXXX
Re: Advisory Opinion - XXXXX
Dear
XXXXX:
This
letter is for the purpose of revising our advisory opinion issued on December
28, 1990. You had requested that your
purchase of a third XXXXX Station be
exempt from sales or use tax under Code Section 59-12-104 (16) and
Administrative Rule R865-19-85S.
Based
upon a recent Tax Commission decision concerning a similar piece of equipment,
it is now our opinion that your XXXXX Station does qualify as manufacturing
equipment and is entitled to tax exemption on its purchase.
If
you are now in agreement with this revised advisory opinion, please acknowledge
your agreement and withdraw your Petition for Redetermination and request for a
hearing by signing below and returning the signed copy of this letter.
For
the Commission
Joe
B. Pacheco
Commissioner
We
are in agreement with you revised advisory opinion dated June 10, 1991, and
therefore, request that our Petition for Redetermination be withdrawn.
BEFORE
THE UTAH STATE TAX COMMISSION
XXXXX,
Petitioner
v.
Auditing
Division of the
Utah
State Tax Commission,
Respondent.
NOTICE
Appeal
No. 91-0065
Tax
Type: Sales
*****
Please
be advised that the above captioned Petitioner has filed a request for agency
action with the Utah State Tax Commission.
Further
hearing on the request will be held at a date and time to be set by the Appeals
and Legal Affairs Section.
Respondent
must submit a written response within 3 days of the date of this notice, and
send a copy to each party to the action. That response must contain the
following:
1. The appeal number.
2. The name of the proceeding.
3. A statement of the relief that the Respondent
seeks.
4. A statement of facts.
5. A statement summarizing the reasons that the
relief requested should be granted.
Failure
to file a responsive pleading may be grounds for a default judgment being
entered against the offending party.
DATED
this 8 day of march, 1991
XXXXX
Appeals
Technician
XXXXX
Appeals
Division
Utah
State Tax Commission
160
East Third South
Salt
Lake City, UT 84134
RE: Appeal of Advisory Opinion dated 12-28-90
and Petition for Hearing - XXXXX
1. Petitioner:
XXXXX
2. Tax Involved:
Sales
tax on production equipment with a purchase price of $$$$$. The sales tax amount is $$$$$.
3. This petition results from the 12-28-90
advisory opinion from Mr. Joe B. Pacheco.
4
& 5 Relief sought:
Exemption
from sales tax under rule R865-19-85S.
6. The auditing division states that the
production process begins for XXXXX where actual printing takes place. In fact, the production process for XXXXX
may be viewed as:
a) a continuous production process beginning
with typesetting initiation (computerized page makeup) or;
b) two separate production processes, the first
of which includes prepress production such as typesetting initiation
(computerized page makeup) and camera department functions such as platemaking. The second production process would include
printing and may be extended to finishing, including folding, binding and
packaging.
I
am including with this letter a copy of XXXXX's request of a declaratory
judgement and Mr. Pacheco's letter.
Cordially,
XXXXX
Director
of finance
December
28, 1990
XXXXX
Director
of Finance
Re: Declaratory Judgment-XXXXX
Dear
XXXXX:
This
letter is in response to your recent request for a Tax Commission ruling on whether
the purchase of a third XXXXX Work Station qualifies for sales or use tax
exemption under Sales Tax Rule R865-19-85S. You stated in a telephone
conversation with XXXXX that the equipment consisted of a XXXXX computer and
special software, and that you had to buy the hardware in order to get the
software. You further stated that the output would go to a typesetting machine.
Although
your inquiry was framed as a request for a declaratory judgment, Tax Commission
policy is to initially treat all such inquiries as requests for advisory
opinions. As such, it was referred to the Tax Commission's Auditing Division
for their analysis and recommendation. The division's recommendation is as
follows:
1. Rule R865-19-85S provides an exemption for
"new or expanding operations." This rule says "machinery means
electronic or mechanical machines to be incorporated into a manufacturing or
assembling process from the initial stage where actual processing begins. . .
."
2. Where actual processing begins is a key phrase.
It means processing of the manufactured product, in XXXXX's case, where the
actual printing takes place. The AdSpeed Work Station is used prior to the
printing process, therefore, it is not qualifying equipment.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
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
TO: XXXXX
FROM: XXXXX
DATE: October 19, 1990
SUBJECT: Request for Advisory Opinion
XXXXX
has requested a declaratory judgment/advisory opinion on the exempt status of a
third XXXXX.
Please
respond according to the guidelines established by the Commission. Thank you.
TO: Utah State Tax Commission
DATE: August 10, 1990
SUBJECT: S85 Exemption
XXXXX
is currently installing a third XXXXX Workstation. This is a computerized ad
makeup system. The Purchase price of this system is $$$$$. This equipment does
not replace any other equipment at XXXXX. I believe this equipment is exempt
from Utah State Sales Tax under rule A12-02-S85. In order to avoid the possible
assessment of sales tax, penalty, and interest I would like a declaratory
judgement to determine whether this piece of equipment qualifies for exemption.
Please
contact me if you have any questions or need additional information.
Cordially,
XXXXX
Director
of Finance