95-037
Responses
June 19, 1995 and July 6, 1995
Request
FOR: XXXXX,
SENDER: XXXXX
#
OF PAGES INCLUDING COVER: 1
Subject:Your
letter dated June 19, RE: Sales Tax, Account number XXXXX
The
truck scale being purchased is an integral part of our manufacturing facility
since we could not operate without it.
Instead
of having an in-process conveyer belt scale, we use a truck scale at the
beginning and end of our process. This
is due to the large amounts of raw material we handle.
I
am asking the Utah Tax Commission to rule that the truck scale is exempt as
part of a new manufacturing facility.
The above description should satisfy Rule R865-19S-85. If we can not operate without a scale logic
dictates that it is an integral part of the manufacturing process.
I
invite the Tax Commission to sent someone to see our operation. The assigned SIC code does not have the
slightest application to our plant.
It
is my feeling that if a larger employer was involved, such time consuming
effort on their part would not be required by the Tax Commission. I have contacted every Utah State Agency
that is supposed to help business locate in Utah. Everyone was enthusiastic until they found out we were a small
company. I never heard from them again.
If
Utah is serious about small business, the Tax Commission would be looking for
ways to qualify our purchases, not make us prove their validity. I have no power, time or resources to fight
your agency or any other agency. I
outlined six compelling reasons why the scale qualifies for an exemption, in my
fax dated XXXXX. Its rejection because
it did not ask for an opinion or ask a question ism in my opinion, a
quintessential example of bureaucratic churning. Much to the Tax Commissions credit it will work. I will not write another word on the subject
since it will cost our company more than the benefit to fight such bureaucracy.
XXXXX
RE: Sales Tax, account number XXXXX.
Dear
XXXXX:
I
have asked the auditing division to review your memo covering the request for sales
tax exemption on a truck scale. XXXXX returned the memo to me with the
following suggestions:
1. The memo
does not ask a question or for an opinion
2. The SIC
code #1742 covers processing of sizing and dry wall materials. That code is not
considered a manufacturing activity. The Tax Commission assigned the code.
3. A formal
request for an "Advisory Opinion" sent directly to the Tax
Commission, Attn: Auditing
4. A more
detailed description of how a truck scale can be part of a manufacturing process
as outlined in rule, R865-19s-85. (copy enclosed)
Thank you for your patience and I apologize for not
being more explicit in our previous talks.
If you have any questions, please feel free to
contact me at XXXXX.
Respectfully,
XXXXX
XXXXX
FOR: XXXXX
SENDER: XXXXX
# OF PAGES INCLUDING COVER: 1
Subject:Tax status of truck scale for our new mfg
facility in SLC.
The truck scale being purchased is an integral part
of the manufacturing facility for the following reasons:
1. The price
of our end product is directly dependent on the weight of the incoming material
2. The
amount of end product shipped is made without the weight of incoming material.
3. Inventory
calculations cannot be made without the weight of incoming material.
4. Inventory
reduction calculations cannot be made without weight of outgoing material.
5. All of
the incoming raw material is on consignment and our only way of checking on our
consignment responsibility is to have accurate weights on incoming and outgoing
material.
6. We are
paid for our manufacturing on a per ton basis which is based on incoming
tonnage.
If you have any questions, please call me at XXXXX.
XXXXX
**See files for a sheet on SALES TAX MASTER
INFORMATION INQUIRY**
**See file for two request sheets on general and
sales information to the Tax Commission from XXXXX.**
RE: Advisory
Opinion: Application of Sales Tax Exemption to Truck Scales Used in Your XXXXX.
Dear XXXXX,
You requested that the Commission advise you as to
the application of sales tax to your recent purchase of a truck scale which is
used in your manufacturing process. From the information provided in your
correspondence and in telephone conversations with our staff, we understand the
facts of your situation to be as follows:
1. Your
primary business is the manufacture of XXXXX, not the wholesale or retail trade
of XXXXX. Your operation fits within the SIC Code 3312 of the 1987 Standard
Industrial Classification Manual.
2. Your
manufacturing process requires that you weigh the raw material at the beginning
and the end of processing to determine whether you have met your customer's
yield specifications for the product. Weighing the product is an integral part
of the manufacturing process.
4. The scale
was purchased as part of a new manufacturing facility, and it does not
constitute replacement equipment.
On the basis of these facts, the Commission finds as
follows:
Your purchase of a truck scale fits within the sales
tax exemption for sales of equipment for use by a manufacturer for use in a new
operation.
This opinion is based upon the facts presented
above. 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.
For the Commission,
Alice Shearer
Commissioner