96-064
Response
April 9, 1996, May 17, 1996 and May 28, 1996
Request
Val
Oveson, Chairman
Utah
State Tax Commission
State
Capital
Salt
Lake City, Utah
Dear
Mr. Oveson,
During
July of 1995, I ordered a new air conditioning and heating system for my home
in XXXXX, Utah.
The
unit was installed by XXXXX in August, 1995. The Air conditioner was hooked up
and the gas line was stubbed out from the unit.
I
did not have natural gas prior to this time, and the gas company had to connect
our line from the street to the side of our house. By the time this was
accomplished and the meter was actually set, the deadline for this new impact
fee of $$$$$ was past.
I
have talked to the St. George office, and had XXXXX explain to them that it
wasn't my fault that the gas company could not set the meter sooner than they
did. I feel this impact fee is unfairly assessed due to the circumstances.
Another
problem that I have with XXXXX billing is the fact that I am being charged Utah
State Sales Tax on the consumption amount of my bill plus the impact fee
amount.
My
understanding of sales tax is that the consumption amount is the only item that
can be taxed. The impact fee would not be taxable if the amount would have been
billed at $$$$$ and paid in full.
Please
give my complaint due consideration and let me know what can be done.
Sincerely,
XXXXX
XXXXX
Dear
XXXXX,
We
have received your request for information regarding the taxation of impact
fees for gas service to your home.
Although you use the term “impact fee” in your letter, we believe you
may mean “hookup fee.” An impact fee is
normally defined as a charge imposed by your local municipal or county
government to defray the cost of building infrastructure and providing public
services to areas under development. A
hookup fee is a charge for connecting a particular building to the utility
service. Neither of these charges is a
tax, nor is the imposition of these charges within the Tax Commission’s
jurisdiction.
If
the charge in question is a hookup fee charged by XXXXX as part of the cost of
providing you with gas service, it is taxable as a sale of gas service. In that case, the tax should apply whether
you pay in a lump sum or in installments with your monthly XXXXX bill.
Please
let us know if you have other questions.
For the Commission,
Alice Shearer,
Commissioner
XXXXX
Re:
Sales Tax on “New Premise Fee”
Dear
XXXXX
We have received your additional
information regarding the “new premise fee” charged by XXXXX on your monthly
bill. Our staff has consulted with
XXXXX Supply to determine the nature of this charge. We learned that the “new premise fee” is the charge to set the
gas meter on your home. It is
apparently a different charge than the “hook-up fee” that you referred to in
your previous letter.
As we stated in our first response, any
charge by XXXXX that is part of the cost of providing you with gas service is
taxable as a sale of gas service. The
charge to set your meter is subject to sales tax whether it is paid in a lump
sum or in installments. You indicated
that had the service been provided prior to September 1st, the meter would have
been set at no additional cost to you.
Had there been no charge, sales tax would not be an issue. However, XXXXX has levied a charge for
setting your meter, and that charge is subject to sales tax.
We hope this information is useful
in helping you understand why the new premise fee is subject to tax. Please let us know if you have other
questions.
For the Commission,
Alice Shearer,
Commissioner
Commissioner
Alice Shearer
Utah
State Tax Commission
Re:
“New Premise Fee”
May
21, 1996
Thank
you for your letter of May 17th, however, I still have a problem with your
staff research conclusion...
This
“new premise fee” I was told, has nothing to do with the cost of the meter...This
charge is an extra assessment for defraying investment costs incurred by XXXXX,
because of extreme growth in new homes & businesses throughout the Southern
Utah region...Effective Sept. 1, 1995 this new premise fee was charged on all
new homes @ $$$$$ per month for 12 months ($$$$$). Thus, this temporary fee is
a regional impact fee as I implied in my first communication with the Tax
Commission...Please reevaluate my concern for this issue...
Respectfully,
XXXXX
XXXXX
Dear
XXXXX
We
have again reviewed your request for information pertaining to the application
of sales tax on the “new premise fee” imposed by XXXXX. Again, the charge is taxable as part of the
charge for providing you with service.
Because
you have directed this question to us a number of times, we assume that you are
unpersuaded by our advisory opinions.
You may be interested in channeling this issue through our appeals
process. There are a number of steps
you must take to accomplish that.
First, you must approach XXXXX for a refund of the tax that you claim
has been collected in error. If XXXXX
refuses your claim, your recourse is directly to the Tax Commission. You may direct your request for refund to
XXXXX in our Customer Service Division.
If the refund claim is denied at that level, you may appeal that
decision by submitting a petition to our Appeals Unit within 30 days of the
date of denial. If you remain
dissatisfied upon conclusion of the appeal process, you may petition the courts
for judicial review.
If
you have questions about any of these processes, please let us know.
For
the Commission,
Alice
Shearer,
Commissioner