Response July 12, 1995
Request
April 24, 1995
Mr. Val Oveson
UTAH STATE TAX COMMISSION
210 North 1950 West
Salt Lake City, Utah 84134
Dear Mr. Oveson:
As follows up to our telephone conversation, I am requesting a ruling
or a written statement of the tax commission’s policy regarding contractor’s
liability for exemption certificates received in good faith. I believe the policy is that, if it appears
reasonable that exemption could apply, further policing of the exemption
qualification should not be the responsibility of the contractor, but should be
the liability of the party issuing the exemption. I have not found anything written to support this.
A reply prior to mid-May would be extremely helpful to me as support in
an out of state tax appeal is in process.
I appreciate your time and help in this matter, and thank you for your
assistance.
Sincerely,
XXXXX
XXXXX
RE: Advisory Opinion - Contractor’s liability
for exemption certificates received in good faith
Dear
XXXXX,
You
requested an advisory opinion explaining the liability of contractors who accept
exemption certificates in good faith.
Before answering that question, we realize that you were expecting a
response much sooner to support another appeal. We apologize for the delay.
With
regard to your question, we find as follows:
Utah
Administrative Rule R865-19S-23 (copy attached) outlines the Commission’s
policy regarding exemption certificates.
It states, in part, that the vendor has the burden of proving that a
sale is eligible for an exemption.
In
placing the burden of proof on the vendor (or contractor), we do not expect the
vendor to extensively investigate those claiming exemption. Instead, we require the vendor to make a
reasonable and good faith effort to certify that the exemption applies, and
then maintain appropriate records documenting the transaction. An exemption certificate or other acceptable
evidence is generally sufficient to support the claim.
We
hope this information is helpful to you.
Again, we apologize for the delay.
For
the Commission,
Alice
Shearer
Commissioner