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H.B. 316 Enrolled

    

TAX ASSESSMENTS, REFUNDS, AND CREDITS

    
1997 GENERAL SESSION

    
STATE OF UTAH

    
Sponsor: Wayne A. Harper

    AN ACT RELATING TO REVENUE AND TAXATION; CLARIFYING TIME PERIODS AND
    THE DETERMINATION OF TIME PERIODS FOR ASSESSMENTS, REFUNDS, AND
    CREDITS ASSOCIATED WITH VARIOUS TAXES, SURCHARGES, AND FEES;
    REPEALING PROVISIONS RELATING TO FILING AMENDED RETURNS, AND
    PAYING ADDITIONAL TAXES; AND MAKING TECHNICAL CHANGES.
    This act affects sections of Utah Code Annotated 1953 as follows:
    AMENDS:
         19-6-410, as last amended by Chapter 1, Laws of Utah 1993, Second Special Session
         35-1-53 (Renumbered 07/01/97), as last amended by Chapter 205, Laws of Utah 1995
         35A-3-202 (Effective 07/01/97), as renumbered and amended by Chapter 240, Laws of
    Utah 1996
         40-6-14, as last amended by Chapter 1, Laws of Utah 1993, Second Special Session
         59-5-114, as repealed and reenacted by Chapter 4, Laws of Utah 1988
         59-5-214, as last amended by Chapter 183, Laws of Utah 1988
         59-11-113, as last amended by Chapter 127, Laws of Utah 1992
         59-14-206, as last amended by Chapter 66, Laws of Utah 1992
    ENACTS:
         59-9-106, Utah Code Annotated 1953
         59-16-102, Utah Code Annotated 1953
    REPEALS:
         59-11-108, as renumbered and amended by Chapter 2, Laws of Utah 1987
    Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 19-6-410 is amended to read:
         19-6-410. Environmental surcharge on petroleum.
        (1) An environmental surcharge of one-half cent per gallon is imposed on all petroleum


    that is sold, used, or received for sale or use in this state, except under Subsection (2).
        (2) The environmental surcharge is not imposed on petroleum delivered to any tank that is:
        (a) not an underground storage tank, unless the petroleum is being held for subsequent retail
    sale; or
        (b) exempt from this part, unless the tank becomes eligible for payments from the Petroleum
    Storage Tank Fund.
        (3) The revenues generated by the environmental surcharge and any penalties for failure to
    pay the environmental surcharge shall be deposited in the Petroleum Storage Tank Fund.
        (4) The State Tax Commission:
        (a) shall prescribe by rule the method of payment of the environmental surcharge; and
        (b) is responsible for the enforcement of this section.
        (5) (a) The penalties and interest for failure to pay the environmental surcharge are the same
    as the penalties and interest for failure to pay a tax as specified in Sections 59-1-401 and 59-1-402.
        (b) The State Tax Commission may also revoke any license issued by the commission to
    distribute petroleum if the distributor is delinquent in payment of the environmental surcharge.
        (c) Time periods for the State Tax Commission to allow a refund or assess the surcharge
    shall be determined in accordance with Section 59-13-210.
        Section 2. Section 35-1-53 (Renumbered 07/01/97) is amended to read:
         35-1-53 (Renumbered 07/01/97). Assessment on employers and counties, cities, towns,
     or school districts paying compensation direct.
        (1) (a) An employer, including a county, city, town, or school district, who by authority of
    the commission under Section 35-1-46 is authorized to pay compensation direct shall pay annually,
    on or before March 31, an assessment of the same percentage as required by law to be paid by an
    insurance company upon its premiums, based upon an amount equivalent to premiums, that would
    be paid by the employer, if insured in the Workers' Compensation Fund of Utah; the assessment is
    to be computed and collected by the State Tax Commission and paid by it into the state treasury as
    provided in Subsection 59-9-101(2).
        (b) An employer whose total assessment obligation under Subsection (1) for the preceding

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    year was $10,000 or more shall pay the assessment in quarterly installments in the same manner
    provided in Section 59-9-104 and subject to the same penalty provided in Section 59-9-104 for not
    paying or underpaying an installment.
        (2) (a) The State Tax Commission shall have access to all the records of the office of the
    Industrial Commission for the purpose of computing and collecting any amounts described in this
    section.
        (b) Time periods for the State Tax Commission to allow a refund or make an assessment
    shall be determined in accordance with Section 59-9-106.
        Section 3. Section 35A-3-202 (Effective 07/01/97) is amended to read:
         35A-3-202 (Effective 07/01/97). Assessment on employers and counties, cities, towns,
     or school districts paying compensation direct.
        (1) (a) An employer, including a county, city, town, or school district, who by authority of
    the department under Section 35A-3-201 is authorized to pay compensation direct shall pay
    annually, on or before March 31, an assessment of the same percentage as required by law to be paid
    by an insurance company upon its premiums, based upon an amount equivalent to premiums, that
    would be paid by the employer, if insured in the Workers' Compensation Fund of Utah.
        (b) The assessment required by Subsection (1)(a) is to be computed and collected by the
    State Tax Commission and paid by the State Tax Commission into the state treasury as provided in
    Subsection 59-9-101(2).
        (c) An employer whose total assessment obligation under Subsection (1)(a) for the preceding
    year was $10,000 or more shall pay the assessment in quarterly installments in the same manner
    provided in Section 59-9-104 and subject to the same penalty provided in Section 59-9-104 for not
    paying or underpaying an installment.
        (2) (a) The State Tax Commission shall have access to all the records of the office of the
    department for the purpose of computing and collecting any amounts described in this section.
        (b) Time periods for the State Tax Commission to allow a refund or make an assessment
    shall be determined in accordance with Section 59-9-106.
        Section 4. Section 40-6-14 is amended to read:

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         40-6-14. Fee on oil and gas at well -- Use -- Collection -- Penalty and interest on
     delinquencies -- Payment when product taken in-kind -- Interests exempt.
        (1) There is levied a fee of .002 of the value at the well of oil and gas:
        (a) produced and saved;
        (b) sold; or
        (c) transported from the premises in Utah where the oil or gas is produced.
        (2) (a) The State Tax Commission shall administer the collection of the fee, including any
    penalties and interest.
        (b) The monies collected shall be deposited as fixed collections to be used by the Division
    of Oil, Gas and Mining for the purposes specified in Section 40-6-14.5.
        (c) Time periods for the State Tax Commission to allow a refund or assess the fee shall be
    determined in accordance with Section 59-5-114.
        (3) (a) Each person having an ownership interest in oil or gas at the time of production shall
    be liable for a proportionate share of the fee equivalent to his ownership interest.
        (b) As used in this section "ownership interest" means any:
        (i) working interest;
        (ii) royalty interest;
        (iii) interest in payments out of production; or
        (iv) any other interest in the oil or gas, or in the proceeds of the oil or gas, subject to the fee.
        (4) The operator, on behalf of himself and any person having an ownership interest in the
    oil or gas, shall pay the assessed fee quarterly to the State Tax Commission on or before the 45th day
    following the quarter in which the fee accrued.
        (5) (a) Any fee not paid within the time specified shall:
        (i) carry a penalty as provided in Section 59-1-401; and
        (ii) bear interest at the rate and in the manner prescribed in Section 59-1-402.
        (b) The fee, together with the interest, shall be a lien upon the oil or gas against which it is
    levied. The operator shall deduct from any amounts due to the persons owning an interest in the oil
    or gas, or in the proceeds at the time of production, a proportionate amount of the charge before

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    making payment to the persons.
        (6) (a) When product is taken in-kind by an interest owner who is not the operator and the
    operator cannot determine the value of the in-kind product, the operator shall:
        (i) report 100% of the production;
        (ii) deduct the product taken in-kind; and
        (iii) pay the levy on the difference.
        (b) The interest owner who takes the product in-kind shall file a report and pay the levy on
    his share of production excluded from the operator's report.
        (7) This section shall apply to any interest in oil or gas produced in the state except:
        (a) any interest of the United States;
        (b) any interest of the state or its political subdivisions in any oil or gas or in the proceeds;
        (c) any interest of any Indian or Indian tribe in any oil or gas or in the proceeds produced
    from land subject to the supervision of the United States; or
        (d) oil or gas used in producing or drilling operations or for repressuring or recycling
    purposes.
        Section 5. Section 59-5-114 is amended to read:
         59-5-114. Limitation of actions.
        (1) An action for the recovery of any severance tax due and unpaid or to foreclose the lien
    for the payment of the tax as provided in Section 59-5-108 may be brought by the commission in
    any court of competent jurisdiction at any time within six years after the cause of action has accrued.
        (2) The commission may not make a credit or refund unless the taxpayer files a claim with
    the commission within six years of the date of overpayment.
        Section 6. Section 59-5-214 is amended to read:
         59-5-214. Limitation of actions.
        (1) An action for the recovery of any severance tax imposed under this chapter upon the
    business of mining or extracting metalliferous minerals due and unpaid, or to foreclose the lien upon
    the mine or mining claim from which the mineral is extracted for the payment of the tax as provided
    in Section 59-5-208, may be brought by the commission in any court of competent jurisdiction at

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    any time within three years after the cause of action has accrued.
        (2) The commission may not make a credit or refund unless the taxpayer files a claim with
    the commission within three years of the date of overpayment.
        Section 7. Section 59-9-106 is enacted to read:
         59-9-106. Assessment of taxes -- Action for collection of tax -- Limit for refund or credit
     of tax.
        (1) (a) Except as provided in Subsection (2), the commission shall assess a tax under this
    chapter within three years after a taxpayer files a return.
        (b) If the commission does not assess a tax under this chapter within the three-year period
    provided in Subsection (1)(a), the commission may not file an action to collect the tax.
        (2) The commission may assess a tax at any time if a taxpayer:
        (a) files a false or fraudulent return with intent to evade; or
        (b) does not file a return.
        (3) The commission may not make a credit or refund unless the taxpayer files a claim with
    the commission within three years of the date of overpayment.
        Section 8. Section 59-11-113 is amended to read:
         59-11-113. Administration by commission -- Action for collection of tax -- Limit for
     refund or credit of tax -- Appeal.
        (1) The commission is charged with the administration and enforcement of this chapter and
    may promulgate rules under Title 63, Chapter 46a, Utah Administrative Rulemaking Act, to
    effectuate the purposes of this chapter.
        (2) The commission shall collect the tax provided for under this chapter, including
    applicable interest and penalties, and shall represent this state in all matters pertaining to collection,
    either before courts or otherwise. The commission may institute proceedings for the collection of
    this tax, and any interest and penalties on the tax, in the district court of any county in which any
    portion of the property is situated. For this purpose the commission may call to its assistance the
    attorney general and the various county attorneys throughout the state.
        (3) (a) Except as provided in Subsection (4), the commission shall assess a tax under this

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    chapter within three years after a taxpayer files a return.
        (b) If the commission does not assess a tax under this chapter within the three-year period
    provided in Subsection (3)(a), the commission may not file an action to collect the tax.
        (4) The commission may assess a tax at any time if a taxpayer:
        (a) files a false or fraudulent return with intent to evade; or
        (b) does not file a return.
        (5) A taxpayer shall:
        (a) notify the commission within 90 days after a final determination of a change made in a
    taxpayer's net income on the taxpayer's federal estate tax return if:
        (i) the change is made because:
        (A) the taxpayer filed an amended federal return; or
        (B) of an action by the federal government; and
        (ii) the change affects the taxpayer's state tax liability; and
        (b) if the taxpayer is required to notify the commission of a change as provided in
    Subsection (5)(a)(i), file a copy of:
        (i) the amended federal return; and
        (ii) an amended state return which conforms to the changes on the federal return.
        (6) (a) The commission may assess a deficiency in state estate taxes as a result of a change
    in a taxpayer's net income under Subsection (5):
        (i) within three years after a taxpayer files an amended return under Subsection (5)(b) if the
    taxpayer files an amended return; or
        (ii) within six years after the change if a taxpayer does not file an amended return under
    Subsection (5)(b).
        (b) The amount of a deficiency assessed under Subsection (6)(a) may not exceed the amount
    of the increase in Utah tax attributable to the change in the taxpayer's net income under Subsection
    (5)(a).
        (7) The commission may not make a credit or refund unless the taxpayer files a claim with
    the commission within three years of the date of overpayment.

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        [(3)] (8) Any party to a proceeding before the district court concerning the tax imposed by
    this chapter, including the commission, may appeal from the order, judgment, or decree entered by
    the district court.
        Section 9. Section 59-14-206 is amended to read:
         59-14-206. Sales of stamps -- Deposit of revenues -- Redemption of unused stamps --
     Discount on lump purchases of stamps -- Unlawful acts.
        (1) The commission may prepare stamps for use on packages and containers of cigarettes
    according to its specifications, designs, and denominations and shall keep an accurate record of all
    stamps for which the commission is responsible. The cost of the stamps shall be charged to any
    appropriation made to defray the costs of administering this chapter.
        (2) The commission shall sell stamps only to persons holding licenses issued as provided
    in this chapter.
        (a) The money received from the sale of the stamps, and all other money received from
    penalties, fees, and taxes provided by this chapter shall be deposited in the General Fund.
        (b) The commission may deliver stamps in face value not to exceed 90% of the penal sum
    of the licensee's bond to any licensee without payment. The licensee shall pay for stamps within 60
    days of the date the stamps were delivered on credit to the licensee.
        (c) Unused stamps may be redeemed within [two] three years of their purchase by
    presentation to the commission of a claim by the person to whom they were originally sold. The
    redemption claim shall be accompanied by the unused stamps.
        (d) The commission shall certify a redemption claim with its approval to the state auditor,
    who shall draw a warrant upon the state treasurer for the payment of the claim.
        (3) The commission shall allow a discount of 4% upon the entire amount to each licensee
    for each single purchase of stamps amounting to $25 or more.
        (4) It is unlawful for any person to sell or dispose of stamps to any other person. However,
    stamps may be distributed to the various places of sale by the main office whenever a person owns
    or operates more than one place of sale. Each place of sale shall have a separate license and
    cancellation stamp.

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        Section 10. Section 59-16-102 is enacted to read:
         59-16-102. Action for collection of tax -- Limit for refund or credit of tax.
        (1) (a) Except as provided in Subsection (2), the commission shall assess a tax under this
    chapter within three years after a taxpayer files a return.
        (b) If the commission does not assess a tax under this chapter within the three-year period
    provided in Subsection (1)(a), the commission may not file an action to collect the tax.
        (2) The commission may assess a tax at any time if a taxpayer:
        (a) files a false or fraudulent return with intent to evade; or
        (b) does not file a return.
        (3) The commission may not make a credit or refund unless the taxpayer files a claim with
    the commission within three years of the date of overpayment.
        Section 11. Repealer.
        This act repeals:
        Section 59-11-108, Amended returns -- Payment of additional taxes -- Notice of
     deficiency.

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