Tax Commission, Administration

Section R861-1A-46

Procedures for Purchaser Refund Requests Pursuant to Utah Code Ann. Sections 59-1-1410 and 59-12-110

Notice of Proposed Rule

(Amendment)

DAR File No.: 36695
Filed: 08/27/2012 12:39:28 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The proposed rule is provides guidance for certain persons applying for a sales tax refund.

Summary of the rule or change:

The proposed rule defines a purchaser refund request as a request for a refund of sales taxes submitted by a person other than the seller that originally collected and remitted the sales tax to the Tax Commission; indicates the information that must be provided to the Tax Commission when submitting a purchaser refund request; provides that an applicant that qualifies may choose to have the purchaser refund request reviewed by a sampling method, rather than a 100 percent review of the transactions included in the refund request; and provides that a purchaser refund request will be decreased by the amount of those transactions for which required information is not provided to the Tax Commission within the specified time period, and will be treated as dismissals that may be appealed only on the issue of whether the required information was received by the Tax Commission within the specified time.

State statutory or constitutional authorization for this rule:

• Section 59-12-110
• Section 59-1-1410

Anticipated cost or savings to:

the state budget:

None--The proposed section indicates how to apply for certain sales tax refunds.

local governments:

None--The proposed section indicates how to apply for certain sales tax refunds.

small businesses:

None--The proposed section indicates how to apply for certain sales tax refunds.

persons other than small businesses, businesses, or local governmental entities:

None--The proposed section indicates how to apply for certain sales tax refunds.

Compliance costs for affected persons:

None--The proposed section indicates how a person shall apply for a sales tax refund when that person is not the seller that originally collected and remitted the sales tax to the Tax Commission. While in most cases, the application process mirrors the long-standing practice of the division, an applicant that qualifies for and chooses the sampling method of review will provide less information to the Tax Commission than currently.

Comments by the department head on the fiscal impact the rule may have on businesses:

This proposed application process for certain sales tax refunds creates no fiscal impact.

Michael Cragun, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Tax Commission
Administration
210 N 1950 W
SALT LAKE CITY, UT 84134-0002

Direct questions regarding this rule to:

• Christa Johnson at the above address, by phone at 801-297-3901, by FAX at 801-297-3907, or by Internet E-mail at cj@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/15/2012

This rule may become effective on:

10/22/2012

Authorized by:

Michael Cragun, Tax Commissioner

R861. Tax Commission, Administration.

R861-1A. Administrative Procedures.

R861-1A-46. Procedures for Purchaser Refund Requests Pursuant to Utah Code Ann. Sections 59-1-1410 and 59-12-110.

(1) Definitions.

(a) "Division" means the Taxpayer Services Division of the commission.

(b) "Purchaser refund request" means:

(i) a refund request for sales tax overpaid; and

(ii) submitted by a person other than the seller that originally collected and remitted the sales tax to the commission.

(c) "Required information and documents" means, for each transaction included in a purchaser refund request:

(i) a description of the item for which a refund is requested;

(ii) the invoiced transaction date;

(iii) the taxable purchase amount;

(iv) the tax rate applied to the purchase amount;

(v) the invoice number;

(vi) invoices or receipts that show the items purchased and sales tax charged;

(vii) the sales tax paid;

(viii) the reason and basis in Utah law for exempting or excluding the item from sales tax;

(ix) documentation that clearly and thoroughly verifies that the item qualifies for a sales tax exemption or exclusion;

(x) the amount of sales tax overpaid;

(xi) proof of payment of sales tax, such as a canceled check, bank statement, credit card statement or receipt, or letter from the seller;

(xii) if an agent applies for the refund on behalf of a purchaser, a power of attorney;

(xiii) the name and address of the seller; and

(xiv) a signed statement that the seller that calculated and remitted the sales tax:

(A) has not provided a sales tax refund or credit; and

(B) will not be asked to provide a sales tax refund or credit.

(2) A person who submits a purchaser refund request shall, at the time the application for the refund is filed, indicate the number of transactions included in the purchaser refund request.

(3) The division may use a sampling method to project the amount of a sales tax refund for which a purchaser refund request qualifies if:

(a) the number of transactions described in Subsection (2) meets the minimum level of 500 transactions set forth in guidelines contained on the application; and

(b) the person submitting the purchaser refund request elects to have the division use a sampling methodology outlined in the application.

(4) If the person submitting the purchaser refund request does not qualify for and elect an evaluation by a sampling method, the division shall evaluate the request based on 100 percent of the transactions included in the request.

(5) Review Based on 100 Percent of the Transactions.

(a)(i) In the case of a review based on 100 percent of the transactions, a person submitting a purchaser refund request shall include the required information and documents with the application to the division.

(ii) The items described in Subsection (5)(a)(i) shall be provided to the division in the format and manner prescribed by the division.

(b) If the application is not accompanied by all of the required information and documents, the division shall send a notice to the person that submitted the purchaser refund request.

(c) The notice described in Subsection (5)(b) shall:

(i) indicate the required information and documents that are missing; and

(ii) allow the person submitting the purchaser refund request 30 days to provide the missing required information and documents to the division.

(d) If the division has not received all of the required information and documents within the time period described in Subsection (5)(c), the division shall:

(i) evaluate the purchaser refund request based solely on the required information and documents received; and

(ii) dismiss for lack of evidence requests for refunds on items for which the division has not received the required information and documents.

(e)(i) Dismissals under Subsection (5)(d) may be appealed to the commission.

(ii) On an appeal under Subsection (5)(e)(i), the only matter that will be reviewed by the commission is whether the required information and documents were received by the division within the time period prescribed under Subsection (5)(c).

(6) Review Based on Sampling.

(a) In the case of a review based on sampling, a person submitting a purchaser refund request shall include the following information for each transaction included in the purchaser refund request with the application to the division:

(i) the invoice number;

(ii) the invoiced transaction date;

(iii) the taxable purchase amount;

(iv) the tax rate applied to the purchase amount;

(v) the sales tax paid;

(vi) the amount of sales tax overpaid;

(vii) the name and address of the seller

(viii) a description of the item for which a refund is requested; and

(ix) the reason and basis in Utah law the item is exempt or excluded from sales tax.

(b) The items described in Subsection (6)(a) shall be provided to the division in the format and manner prescribed by the division.

(c) From the information supplied under Subsection (6)(a), and in accordance with the sampling guidelines found on the application, the division shall:

(i) determine the items that will be included in the sample;

(ii) notify the person submitting the purchaser refund request of the items that will be included in the sample and for which the required information and documents must be submitted to the division; and

(iii) allow the person submitting the purchaser refund request 30 days to provide the required information and documents to the division in the format and manner prescribed by the division.

(d) Required information and documents not received by the end of the period described in Subsection(6)(c) shall be:

(i) considered errors; and

(ii) included in the overall error factor by which the purchaser refund request is decreased.

(e)(i) Errors under Subsection (6)(d) may be appealed to the commission.

(ii) On an appeal under Subsection (6)(e)(i), the only matter that will be reviewed by the commission is whether the required information and documents were received by the division within the time period prescribed under Subsection (6)(c).

 

KEY: developmental disabilities, grievance procedures, taxation, disclosure requirements

Date of Enactment or Last Substantive Amendment: [August 27, ]2012

Notice of Continuation: January 3, 2012

Authorizing, Implemented, or Interpreted Law: 10-1-405; 41-1a-209; 52-4-207; 59-1-205; 59-1-207; 59-1-210; 59-1-301; 59-1-302.1; 59-1-304; 59-1-401; 59-1-403; 59-1-404; 59-1-501; 59-1-502.5; 59-1-602; 59-1-611; 59-1-705; 59-1-706; 59-1-1004; 59-1-1404; 59-7-505; 59-10-512; 59-10-532; 59-10- 533; 59-10-535; 59-12-107; 59-12-114; 59-12-118; 59-13-206; 59-13-210; 59-13-307; 59-10-544; 59-14-404; 59-2-212; 59-2-701; 59-2-705; 59-2-1003; 59-2-1004; 59-2-1006; 59-2-1007; 59-2-704; 59-2-924; 59-7-517; 63G-3-301; 63G-4-102; 76-8-502; 76-8- 503; 59-2-701; 63G-4-201; 63G-4-202; 63G-4-203; 63G-4-204; 63G-4-205 through 63G-4-209; 63G-4-302; 63G-4-401; 63G-4-503; 63G-3-201(2); 68-3-7; 68-3-8.5; 69-2-5; 42 USC 12201; 28 CFR 25.107 1992 Edition