DAR File No. 43883

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.: 43883
Filed: 07/12/2019 09:41:30 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of these amendments is to clarify the Tax Commission (Commission) review process for appeals from purchaser refund request dismissals.

Summary of the rule or change:

These proposed rule amendments clarify that when reviewing an appeal from a dismissal of a purchaser refund request, the Commission must determine whether adequate information and documents which determine the validity of the request were timely submitted to the division. If the appeal is successful the commission shall hear the underlying tax issue.

Statutory or constitutional authorization for this rule:

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

Anticipated cost or savings to:

the state budget:

These proposed amendments are not expected to have any fiscal impact on state government revenues or expenditures because they only clarify the administrative appeals process.

local governments:

These proposed amendments are not expected to have any fiscal impact on local governments' revenues or expenditures because they only clarify the administrative appeals process.

small businesses:

These proposed amendments are expected to reduce the burden on small businesses who file a sales tax purchaser refund request because they will allow the Commission to consider whether adequate information and documentation was timely filed, and the merits of the underlying case in the same action. This may result in a cost savings to impacted small businesses by reducing the number of actions they must file with the Commission.

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

These proposed amendments are expected reduce the burden on persons other than small businesses or local governments who file a sales tax purchaser refund request because they will allow the Commission to consider whether adequate information and documentation was timely filed, and the merits of the underlying case in the same action. This may result in a cost savings to impacted persons by reducing the number of actions they must file with the Commission.

Compliance costs for affected persons:

These proposed amendments are expected reduce the compliance burden on affected persons who file a sales tax purchaser refund request because they will allow the Commission to consider whether adequate information and documentation was timely filed and the merits of the underlying case in the same action. This could result in a cost savings to affected persons by reducing the number of actions they must file with the Commission.

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

These rule amendments will not have a fiscal impact because they reduce the compliance burden on businesses. They will reduce the number of actions required when a taxpayer prevails in certain refund requests.

Rebecca Rockwell, Commissioner

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

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

Direct questions regarding this rule to:

• Jennifer Franklin at the above address, by phone at 801-297-3901, by FAX at , or by Internet E-mail at jenniferfranklin@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:

09/03/2019

This rule may become effective on:

09/10/2019

Authorized by:

Rebecca Rockwell, Commissioner

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non-Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

These proposed amendments are not expected to reduce the burden non-small businesses who file a sales tax purchaser refund request because they will allow the commission to consider whether adequate information and documentation was timely filed and the merits of the underlying case in the same action. This may result in small cost savings to impacted businesses by reducing the number of actions they must file with the commission.

 

Commissioner of the Utah State Tax Commission, Rebecca L. Rockwell, has reviewed and approved this fiscal analysis.

 

 

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 Auditing 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 or other books and records 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 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, letter from the seller, or other books and records that demonstrate payment was made;

(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) Except as provided in Subsection (3), a person submitting a purchaser refund request shall include the required information and documents with the application to the division.

(b) The items described in Subsection (2)(a) shall be provided to the division in the format and manner prescribed by the division.

(c) 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.

(d) The notice described in Subsection (2)(c) 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.

(e)(i) A person submitting a purchaser refund request who is unable to provide the information and documents described in Subsection (2)(d)(i) within the time period described in Subsection (2)(d)(ii) may contact the division to request an extension of time to provide the required information and documents that are missing.

(ii) The division shall grant reasonable requests for extension that will not unnecessarily prolong the processing of the refund request. If an extension is granted, the division shall provide written notice to the person submitting the purchaser refund request of the length of an extension of time granted under Subsection (2)(e)(i).

(f) If the division has not received all of the required information and documents within the time period described in Subsection (2)(d), or if applicable, within an extension of time granted under Subsection (2)(e), 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.

(g)(i) Dismissals under Subsection (2)(f) may be appealed to the commission.

(ii) On an appeal under Subsection (2)(g)(i), the [only matter that will be reviewed by the ]commission shall review[is] whether information and documents adequate to determine the validity of the purchaser refund request were received by the division within the time period prescribed under Subsection (2)(d), or if applicable, within an extension of time granted under Subsection (2)(e).

(iii) If a person prevails on an appeal under Subsection (2)(g)(i), the commission shall hold a hearing for disposition of the underlying tax issue.

(3)(a) A person who submits a purchaser refund request may, at the time the application for the refund is filed, request the division use a sampling method in its review of the purchaser refund request.

(b) A person requesting a sampling method of review under Subsection (3)(a) 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.

(c) The items described in Subsection (3)(b) shall be provided to the division in the format and manner prescribed by the division.

(4)(a) If the division and a person submitting a purchaser refund request agree to the division's use of a sampling method in its review of the purchaser refund request, 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 the information and documents that must be submitted to the division; and

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

(b)(i) A person submitting a purchaser refund request who is unable to provide the information and documents described in Subsection (4)(a)(ii) within the time period described in Subsection (4)(a)(iii) may contact the division to request an extension of time to provide the information and documents that are missing.

(ii) The division shall grant reasonable requests for extension that will not unnecessarily prolong the processing of the refund request. If an extension is granted, the division shall provide written notice to the person submitting the purchaser refund request of the length of an extension of time granted under Subsection (4)(b)(i).

(c) Information and documents described in Subsection (4)(a)(ii) that are not received by the end of the period described in Subsection(4)(a), or if applicable, within an extension of time granted under Subsection (4)(b), shall be:

(i) considered errors; and

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

(d)(i) Errors under Subsection (4)(c) may be appealed to the commission.

(ii) On an appeal under Subsection (4)(d)(i), the only matter that will be reviewed by the commission is whether information and documents adequate to determine the validity of the purchaser refund request were received by the division within the time period prescribed under Subsection (4)(a), or if applicable, within an extension of time granted under Subsection (4)(b).

 

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

Date of Enactment or Last Substantive Amendment: [September 10, 2018]2019

Notice of Continuation: November 10, 2016

Authorizing, and 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; 59-1-405; 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