$20 or 10% of the unpaid tax for:
        (a) failure to pay any tax, as reported on a timely filed return;
        (b) failure to pay any tax within 90 days of the due date of the return, if there was a late filed return subject to the penalty provided under Subsection (1)(a);
        (c) failure to pay any tax within 30 days of the date of mailing any notice of deficiency of tax unless a petition for redetermination or a request for agency action is filed within 30 days of the date of mailing the notice of deficiency;
        (d) failure to pay any tax within 30 days after the date the commission's order constituting final agency action resulting from a timely filed petition for redetermination or request for agency action is issued or is considered to have been issued under Subsection 63-46b-13 (3)(b); and
        (e) failure to pay any tax within 30 days after the date of a final judicial decision resulting from a timely filed petition for judicial review.
        (3) (a) Beginning January 1, 1995, in the case of any underpayment of estimated tax or quarterly installments required by Sections 59-5-107 , 59-5-207 , 59-7-504 , and 59-9-104 , there shall be added a penalty in an amount determined by applying the interest rate provided under Section 59-1-402 plus four percentage points to the amount of the underpayment for the period of the underpayment.
        (b) (i) For purposes of Subsection (3)(a), the amount of the underpayment shall be the excess of the required installment over the amount, if any, of the installment paid on or before the due date for the installment.
        (ii) The period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier:
        (A) the original due date of the tax return, without extensions, for the taxable year; or
        (B) with respect to any portion of the underpayment, the date on which that portion is paid.
        (iii) For purposes of this Subsection (3), a payment of estimated tax shall be credited against unpaid required installments in the order in which the installments are required to be paid.
        (4) (a) In case of an extension of time to file an individual income tax or corporate franchise tax return, if the lesser of 90% of the total tax reported on the tax return or 100% of the prior year's tax is not paid by the due date of the return, not including extensions, a 2% per month penalty shall apply on the unpaid tax during the

period of extension.
        (b) If a return is not filed within the extension time period as provided in Section 59-7-505 or 59-10-516 , penalties as provided in Subsection (1) and Subsection (2)(b) shall be added in lieu of the penalty assessed under this subsection as if no extension of time for filing a return had been granted.
        (5) (a) Additional penalties for underpayments of tax are as [ follows: ] provided in Subsections (5)(a)(i) through (iv).
        (i) [ If ] Except as provided in Subsection (5)(c), if any underpayment of tax is due to negligence, the penalty is 10% of the underpayment.
        (ii) [ If ] Except as provided in Subsection (5)(d), if any underpayment of tax is due to intentional disregard of law or rule, the penalty is 15% of the underpayment.
        (iii) For intent to evade the tax, the penalty is the greater of $500 per period or 50% of the tax due.
        (iv) If the underpayment is due to fraud with intent to evade the tax, the penalty is the greater of $500 per period or 100% of the underpayment.
        (b) If the commission determines that a person is liable for a penalty imposed under Subsection (ii), (iii), or (iv), the commission shall notify the taxpayer of the proposed penalty.
        (i) The notice of proposed penalty shall:
        (A) set forth the basis of the assessment; and
        (B) be mailed by registered mail, postage prepaid, to the person's last-known address.
        (ii) Upon receipt of the notice of proposed penalty, the person against whom the penalty is proposed may:
        (A) pay the amount of the proposed penalty at the place and time stated in the notice; or
        (B) proceed in accordance with the review procedures of Subsection (iii).
        (iii) Any person against whom a penalty has been proposed in accordance with this subsection may contest the proposed penalty by filing a petition for an adjudicative proceeding with the commission.
        (iv) If the commission determines that a person is liable for a penalty under this subsection, the commission shall assess the penalty and give notice and demand for payment. The notice and demand for payment shall be mailed by registered mail, postage prepaid, to the person's last-known address.
         (c) Notwithstanding Subsection (5)(a)(i), a vendor that collects a

tax under Subsection 59-12-107 (1)(b) is not subject to the penalty under Subsection (5)(a)(i) if on or after July 1, 2001:
         (i) a court of competent jurisdiction issues a final unappealable judgment or order determining that:
         (A) the vendor meets one or more of the criteria described in Subsection 59-12-107 (1)(a); and
         (B) the commission or a county, city, or town may require the vendor to collect a tax under Subsection (2)(a) or (b); or
         (ii) the commission issues a final unappealable administrative order determining that:
         (A) the vendor meets one or more of the criteria described in Subsection 59-12-107 (1)(a); and
         (B) the commission or a county, city, or town may require the vendor to collect a tax under Subsection (2)(a) or (b).
         (d) Notwithstanding Subsection (5)(a)(ii), a vendor that collects a tax under Subsection 59-12-107 (1)(b) is not subject to the penalty under Subsection (5)(a)(ii) if:
         (i) (A) a court of competent jurisdiction issues a final unappealable judgment or order determining that:
         (I) the vendor meets one or more of the criteria described in Subsection 59-12-107 (1)(a); and
         (II) the commission or a county, city, or town may require the vendor to collect a tax under Subsection (2)(a) or (b); or
         (B) the commission issues a final unappealable administrative order determining that:
         (I) the vendor meets one or more of the criteria described in Subsection 59-12-107 (1)(a); and
         (II) the commission or a county, city, or town may require the vendor to collect a tax under Subsection (2)(a) or (b); and
         (ii) the vendor's intentional disregard of law or rule is warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.
        (6) The penalty for failure to file an information return or a complete supporting schedule is $50 for each return or schedule up to a maximum of $1,000.
        (7) If any taxpayer, in furtherance of a frivolous position, has a prima facie intent to delay or impede administration of the tax law and files a purported return that fails to contain information from which the correctness of reported tax liability can be determined or that clearly indicates that the tax liability shown must be substantially incorrect, the penalty is $500.
        (8) For monthly payment of sales and use taxes under Section 59-12-108 , in addition to any other penalties for late payment, a vendor may not retain a percentage of sales and use taxes collected as otherwise allowable under Section 59-12-108 .
        (9) As provided in Section 76-8-1101 , the following are criminal penalties:
        (a) Any person who is required by this title or any laws the commission administers or regulates to register with or obtain a license or permit from the commission, or who operates without having registered or secured a license or permit, or who operates when the registration, license, or permit is expired or not current, is guilty of a class B misdemeanor, except that, notwithstanding Section 76-3-301 , the fine is not less than $500 nor more than $1,000.
        (b) Any person who, with intent to evade any tax or requirement of this title or any lawful requirement of the commission, fails to make, render, sign, or verify any return or to supply any information within the time required under this title, or who makes, renders, signs, or verifies any false or fraudulent return or statement, or who supplies any false or fraudulent information, is guilty of a third degree felony, except that, notwithstanding Section 76-3-301 , the fine is not less than $1,000 nor more than $5,000.
        (c) Any person who willfully attempts to evade or defeat any tax or the payment thereof is, in addition to other penalties provided by law, guilty of a second degree felony, except that, notwithstanding Section 76-3-301 , the fine is not less than $1,500 nor more than $25,000.
        (d) The statute of limitations for prosecution for a violation of this section is six years from the date the tax should have been remitted.
        (10) Upon making a record of its actions, and upon reasonable cause shown, the commission may waive, reduce, or compromise any of the penalties or interest imposed under this part. "

6.    Page 16, Line 489:    After "through" delete "(7)" and insert "(8)"

7.    Page 21, Line 625:    After Line 625 insert:
        "(8)(a) Notwithstanding Subsection (3)(a), for fiscal years beginning on or after fiscal year 2002-03, the commission shall on or before September 30 of each year deposit the difference described in Subsection (8)(b) into the Remote Sales Restricted Account created in Section 59-12-103.2 if that difference is greater

than $0.
        (b) The difference described in Subsection (8)(a) is equal to the difference between:
        (i) the total amount of revenues the commission received from vendors collecting a tax under Subsection 59-12-107(1)(b) for the previous fiscal year; and
        (ii) the total amount of revenues the commission received from vendors collecting a tax under Subsection 59-12-107(1)(b) for fiscal year 2000-01."

8.    Page 22, Line 661:    After Line 661 insert:
        "Section 5. Section 59-12-103.2 is enacted to read:
         59-12-103.2. Remote Sales Restricted Account _ Creation _ Use of revenues.
        (1) There is created within the General Fund a restricted account known as the "Remote Sales Restricted Account."
        (2) The account shall be funded from the portion of the sales and use tax deposited by the commission as provided in Subsection 59-12-103(8).
        (3) It is the intent of the Legislature that the revenues deposited into the account be expended as appropriated by the Legislature to reduce the burden of sales and use taxes imposed on food."

         Renumber remaining sections accordingly.



        Respectfully,



        John L. Valentine
        Committee Chair

Voting: 6-0-1
7 SB0172.SC1 bhowe/BRH RLR/BRH 2/22/00 9:06 AM