92-041

Response October 29, 1992

 

 

Letter

October 29, 1992

 

XXXXX

 

Re: Advisory Opinion - Excise Tax on Cigarettes

 

Dear XXXXX:

 

Your request for an advisory opinion that your client be permitted to post a sign on cigarette vending machines showing a breakdown of the sale price of the cigarettes, the $1.00 Federal excise tax, the amount of the sales tax and the total vended amount was referred to the Auditing Division for their analysis.

 

It is the division staff recommendation that:

 

1. Based upon the decision of the Utah Supreme Court in the XXXXX case, and Rule R865-19-52S separately stated Federal excise tax is not subject to sales tax. It is not necessary that a sign be posted on each vending machine, providing accounting records reflect the sale price separate from the Federal excise tax. If this is consistently done, sales tax is not due on the excise tax.

 

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 and a copy of the Utah Taxpayer Bill of Rights are attached.

 

To arrange for Americans with Disabilities Act accommodations, please contact the Tax Commission at (801) 530-6920, (801) 530-6077 or TDD (801) 530-6269 allowing three working days notice.

 

For the Commission,

 

Joe B. Pacheco

Commissioner


September 4, 1992

 

Joe B. Pacheco, Commissioner

Utah State Tax Commission

160 East Third South

Salt Lake City, Utah 84134

 

Dear Mr. Pacheco;

 

A client of mine sells cigarettes through vending machines. At the present time there is $1.00 per pack federal excise tax. One of the following statements is posted on the vending machines:

 

Vendor Name

Sales Invoice

 

Established Sales Price $$$$$

Fed Excise tax $$$$$

Sales Tax $$$$$

Total Amount $$$$$

 

This is representative and if the total price is different, the taxable amount and the sales tax amount will be adjusted.

 

or

 

Vendor Name

Sales Invoice

 

Established Sales Price equals the TOTAL AMOUNT less federal excise tax of $1.00 and applicable sales tax.

 

For example:

 

Established Sales Price $$$$$

Fed Excise Tax $$$$$

Sales Tax $$$$$

Total Amount $$$$$

 

Please advise me by XXXXX if this procedure is not correct.

 

Respectfully,

 

XXXXX