Response
Request
June
28, 1993
XXXXX
Utah
State Tax Commission
160
East Third South
Salt
Lake City, UT 84134
Re:
Tax Bulletin 13-93-V
Dear
XXXXX
We
are in receipt of the above referenced tax bulletin. After reviewing the
bulletin we have determined that we fall under the public utility provision of
the new law. Therefore we will proceed in obtaining new sales tax exemption
certificates from our religious and charitable institution clients.
We
will continue to not charge sales tax to our clients that are exempt, who have
provided new certificates. We are a long distance phone service provider which
we consider to be a public utility based on information received from the
state.
If
the actions we are taking are not appropriate, I would appreciate a letter
explaining the action we should take. I appreciate your help in this matter and
your prompt response would be appreciated.
Sincerely,
XXXXX
Utah
State Tax Commission
160
East Third South
Salt
Lake City, UT 84134
Dear
Commission:
I
submitted a letter dated XXXXX requesting a clarification of Tax Bulletin
12-93-V. Based on my discussions with XXXXX, he determined that we did not
qualify as a public utility as defined under provisions of the tax bulletin.
I
am now asking that the commission review this interpretation of the bulletin.
The initial decision was based on the Public Service Commissions definition of
a public utility which doesn't cover long distance resellers, like ourselves,
but does cover the major carriers (XXXXX, XXXXX and XXXXX). At one time we were
regulated by the XXXXX but they decided that resellers were no longer going to
be regulated by them since we resold services from a regulated company. To
require resellers of long distance phone services to start charging sales tax
to our religious and charitable institutions clients puts us at a competitive
disadvantage with the other long distance companies who qualify under the XXXXX
definition. These clients will not want
to pay the tax to us and then apply for
a refund when they could select XXXXX and not be charged taxes. We provide the
same services as the large carriers and compete directly against them.
Therefore, we should be entitled to the same treatment under Tax Bulletin
13-93-V.
XXXXX
is a Utah based company who employ's in excess of 100 people and serves a
significant number of clients who are currently sales tax exempt. To force us
to charge these companies taxes would result in a significant loss of revenue
to our company and confusion to the customer. We feel that the intent of the
law change was to exempt all public utilities not just the large ones.
I
would appreciate a review of this matter by the Commission and a directive
issued which allows all company's providing public utilities to be exempt under
provisions of the Tax Bulletin 13-93-V.
Your
prompt decision to the above request would help in implementing what ever
changes are necessary based on you decision.
Sincerely,
XXXXX
Treasurer
July
28, 1993
XXXXX
Re:
Advisory Opinion - Collection of Sales Tax From Religious and Charitable
Organizations
Dear
XXXXX:
Your
request for an advisory opinion as to whether you are exempt from collecting
sales tax from religious and charitable organizations based on Utah Code
Section 59-12-104.1(2)(iii)(B) was referred to the Auditing Division for their
analysis.
The
division’s recommendation is as follows:
Utah
Code section 59-12-104.1(2)(iii)(B) allows a religious or charitable
organization to make purchases without paying sales tax at the point of sale if
the purchase is from a public utility as defined in Utah Code Section 54-2-1.
XXXXX
does not qualify as a public utility as defined in Utah Code Section 54-2-1.
However in our opinion the intent of section 59-12-104.1 was to relieve vendors
from the burden of documenting exempt sales to religious and charitable
organizations. Since XXXXX (the vendor) operates similarly to a public utility
and is willing to assume the responsibility for documenting exempt sales to
exempt organizations they should not be required to collect sales tax from
their exempt customers.
Based
upon the facts presented in your letter we are in agreement with the Auditing
Division’s recommendation. Obviously if there are deviations from these facts
this opinion may be negated.
In
contacting the Tax Commission, if special accommodations are needed in
accordance with the Americans with Disabilities Act please call (801) 530-6920
(801) 530-6077 or TDD (801) 530-6269 allowing three working days notice.
For
the Commission,
Joe
B. Pacheco
Commission