97-057
Response
September 26, 1997
REQUEST
LETTER
August
22, 1997
Dear
Commissioners:
Regarding: Statute of limitations for claiming
refunds of sales or use tax paid on sales
of
uses of property, materials, or services used in the construction of or
incorporated in certified pollution control facilities.
As
you know, Utah Code Annotated, Section 59-12-104 (12), provides an exemption
from sales or use tax for sales or use of property, materials, or services used
in the construction of or incorporated in pollution control facilities allowed
by Sections 19-2-123 through 19-2-127. And Section 59-12-110 provides for
refund of overpayments of sales or use tax as long as a claim for refund is
filed with the commission within three years from the date of the overpayment.
Since
purchases of property or services for pollution control facilities are not
exempt from sales or use tax unless or until the pollution control facility is
certified, it seems reasonable to assume that the overpayment does not occur
until the date of certification. If that is the case, a taxpayer would have
three years from the date of certification of a pollution control facility to
recover taxes paid on purchases made for that facility, regardless of the date
of the purchases.
If
that is not the case and if the statute of limitations runs from the date of
purchase of the property or services instead, a taxpayer may not be able to
recover taxes paid on property and services for a pollution control facility
for which construction, approval, and subsequent certification take longer than
three years.
Recently,
we received a copy of your written procedure for processing refund requests.
The procedure states that "Refund requests for sales and use tax paid to
the Tax Commission must be filed within three years from the date the payment
was initially made to the commission. The only sales tax exception to this rule
is pollution control refunds." The procedure does not explain this
statement, so I phoned your Customer Service Division for clarification. I was
advised that the three years' statute of limitations does begin on the date of
certification.
I
would appreciate an advisory opinion explaining how the statute of limitations
is applied to overpayments of sales or use tax on purchases of property,
materials, or services used in the construction of or incorporated in certified
pollution control facilities.
Thank
you for taking the time to respond to this request.
Sincerely,
NAME
September
26, 1997
NAME
ADDRESS
CITY
STATE ZIP
Advisory
Opinion - Time limitations on requests for refunds on purchases for pollution
control facilities.
Dear
NAME,
We have received your request for
sales tax guidance pertaining to requests for refunds on purchases of items
incorporated in pollution control facilities.
We offer the following:
To be eligible for the pollution
control facility exemption, an item must be certified by the Department of
Environmental Quality (DEQ). It is not
enough that a facility has at one time been certified because it is unlikely
that every item in the facility will qualify for exemption. Therefore, your client must receive
certification from DEQ on the items for which your client will be requesting a
refund.
Turning to your specific question,
it is our position that the time limitation for your client to request a sales
tax refund begins to run on the date of overpayment -- not the date of
certification. Section 59-12-110 of the
Utah Code specifically sets the limitation period to run from the date of
overpayment. The date of overpayment is
the date that the tax was actually paid.
Utah Administrative Rule R865-12-83
anticipates that purchases for pollution control facilities under construction
may take place in advance of certification, and provides for a retroactive refund
under the conditions stated in the rule.
The taxpayer’s right to a refund is further protected by Utah Code
section 19-2-125, which states that the Department of Environmental Quality
must act on the certification application within 120 days or the application is deemed accepted. The certification period, then, does not run
long enough to interfere with the taxpayer’s right to a refund.
Please let us know if we can be of
further assistance.
For
the Commission,
Joe
B. Pacheco,
Commissioner
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