H.B. 427

1

TAX LAW MODIFICATIONS
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Ryan D. Wilcox
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions in the Revenue and Taxation title to address certain issues
10 related to the Utah Supreme Court case Ivory Homes v. Utah State Tax Commission.
11 Highlighted Provisions:
12 This bill:
13 . amends the circumstances under which a person who pays a tax, fee, or charge
14 liability may receive a credit or refund;
15 . addresses the construction of a statute involving a tax, fee, or charge by the State
16 Tax Commission or a court;
17 . addresses sales and use tax refund procedures; and
18 . makes technical and conforming changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill provides an effective date.
23 This bill provides for retrospective operation.
24 Utah Code Sections Affected:
25 AMENDS:
26 59-1-1410, as enacted by Laws of Utah 2009, Chapter 212
27 59-1-1417, as enacted by Laws of Utah 2009, Chapter 212

28 59-12-110, as last amended by Laws of Utah 2009, Chapters 203 and 212
29
30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 59-1-1410 is amended to read:
32 59-1-1410. Action for collection of tax, fee, or charge -- Action for refund or
33 credit of tax, fee, or charge -- Denial of refund claim under appeal -- Appeal of denied
34 refund claim.
35 (1) (a) Except as provided in Subsections (3) through (7) and Sections 59-5-114 ,
36 59-7-519 , 59-10-536 , and 59-11-113 , the commission shall assess a tax, fee, or charge within
37 three years after the day on which a person files a return.
38 (b) Except as provided in Subsections (3) through (7), if the commission does not
39 assess a tax, fee, or charge within the three-year period provided in Subsection (1)(a), the
40 commission may not commence a proceeding to collect the tax, fee, or charge.
41 (2) (a) Except as provided in Subsection (2)(b), for purposes of this part, a return filed
42 before the last day prescribed by statute or rule for filing the return is considered to be filed on
43 the last day for filing the return.
44 (b) A return of withholding tax under Chapter 10, Part 4, Withholding of Tax, is
45 considered to be filed on April 15 of the succeeding calendar year if the return:
46 (i) is for a period ending with or within a calendar year; and
47 (ii) is filed before April 15 of the succeeding calendar year.
48 (3) The commission may assess a tax, fee, or charge or commence a proceeding for the
49 collection of a tax, fee, or charge at any time if:
50 (a) a person:
51 (i) files a:
52 (A) false return with intent to evade; or
53 (B) fraudulent return with intent to evade; or
54 (ii) fails to file a return; or
55 (b) the commission estimates the amount of tax, fee, or charge due in accordance with
56 Subsection 59-1-1406 (2).
57 (4) The commission may extend the period to make an assessment or to commence a
58 proceeding to collect a tax, fee, or charge if:

59 (a) the three-year period under Subsection (1) has not expired; and
60 (b) the commission and the person sign a written agreement:
61 (i) authorizing the extension; and
62 (ii) providing for the length of the extension.
63 (5) The commission may make an assessment as provided in Subsection (6) if:
64 (a) the commission delays an audit at the request of a person;
65 (b) the person subsequently refuses to agree to an extension request by the commission;
66 and
67 (c) the three-year period under Subsection (1) expires before the commission
68 completes the audit.
69 (6) An assessment under Subsection (5) shall be:
70 (a) for the time period for which the commission could not make the assessment
71 because of the expiration of the three-year period; and
72 (b) in an amount equal to the difference between:
73 (i) the commission's estimate of the amount of tax, fee, or charge the person would
74 have been assessed for the time period described in Subsection (6)(a); and
75 (ii) the amount of tax, fee, or charge the person actually paid for the time period
76 described in Subsection (6)(a).
77 (7) If a person erroneously pays a liability, overpays a liability, pays a liability more
78 than once, or the commission erroneously receives, collects, or computes a liability, the
79 commission shall:
80 (a) credit the liability against any amount of liability the person owes; and
81 (b) refund any balance to:
82 (i) the person; or
83 (ii) (A) the person's assign;
84 (B) the person's personal representative;
85 (C) the person's successor; or
86 (D) a person similar to Subsections (7)(b)(ii)(A) through (C) as determined by the
87 commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
88 Rulemaking Act.
89 (8) (a) Except as provided in Subsection (8)(b) or Section 19-2-124 , 59-7-522 ,

90 59-10-529 , or 59-12-110 , the commission may not make a credit or refund unless a person files
91 a claim with the commission within the later of:
92 (i) three years from the due date of the return, including the period of any extension of
93 time provided in statute for filing the return; or
94 (ii) two years from the date the tax was paid.
95 (b) The commission shall extend the time period for a person to file a claim under
96 Subsection (8)(a) if:
97 (i) the time period described in Subsection (8)(a) has not expired; and
98 (ii) the commission and the person sign a written agreement:
99 (A) authorizing the extension; and
100 (B) providing for the length of the extension.
101 (9) If the commission denies a claim for a credit or refund, a person may request a
102 redetermination of the denial by filing a petition or request for agency action with the
103 commission:
104 (a) (i) within a 30-day period after the day on which the commission mails a notice of
105 denial for the claim for credit or refund; or
106 (ii) within a 90-day period after the day on which the commission mails a notice of
107 denial for the claim for credit or refund, if the notice is addressed to a person outside the
108 United States or the District of Columbia; and
109 (b) in accordance with:
110 (i) Section 59-1-501 ; and
111 (ii) Title 63G, Chapter 4, Administrative Procedures Act.
112 (10) The action of the commission on a person's petition for redetermination of a denial
113 of a claim for credit or refund is final 30 days after the day on which the commission sends the
114 commission's decision or order, unless the person seeks judicial review.
115 Section 2. Section 59-1-1417 is amended to read:
116 59-1-1417. Burden of proof.
117 (1) In a proceeding before the commission, the burden of proof is on the petitioner
118 except for determining the following, in which the burden of proof is on the commission:
119 [(1)] (a) whether the petitioner committed fraud with intent to evade a tax, fee, or
120 charge;

121 [(2)] (b) whether the petitioner is obligated as the transferee of property of the person
122 that originally owes a liability or a preceding transferee, but not to show that the person that
123 originally owes a liability is obligated for the liability; and
124 [(3)] (c) whether the petitioner is liable for an increase in a deficiency if the increase is
125 asserted initially after a notice of deficiency is mailed in accordance with Section 59-1-1405
126 and a petition under Part 5, Petitions for Redetermination of Deficiencies, is filed, unless the
127 increase in the deficiency is the result of a change or correction of federal taxable income:
128 [(a)] (i) required to be reported; and
129 [(b)] (ii) of which the commission has no notice at the time the commission mails the
130 notice of deficiency.
131 (2) Regardless of whether a taxpayer has paid or remitted a tax, fee, or charge, the
132 commission or a court considering a case involving the tax, fee, or charge shall:
133 (a) construe a statute imposing the tax, fee, or charge strictly in favor of the taxpayer;
134 and
135 (b) construe a statute providing an exemption from or credit against the tax, fee, or
136 charge strictly against the taxpayer.
137 Section 3. Section 59-12-110 is amended to read:
138 59-12-110. Refunds procedures.
139 (1) A seller that files a claim for a refund under Section 59-12-107 for bad debt shall
140 file the claim with the commission within three years from the date on which the seller could
141 first claim the refund for the bad debt.
142 (2) A seller that files a claim for a refund for a repossessed item shall file the claim
143 with the commission within three years from the date the item is repossessed.
144 [(3) A taxpayer may obtain a refund under Section 59-1-1410 of a tax paid under this
145 chapter on a transaction that is taxable under Subsection 59-12-103 (1) if:]
146 [(a) the sale or use is exempt from sales and use taxes under Section 59-12-104 on the
147 date of purchase; and]
148 [(b) the taxpayer files a claim for a refund with the commission as provided in Section
149 59-1-1410 .]
150 (3) Except as provided in Subsection (1) or (2), procedures and requirements for a
151 taxpayer to obtain a refund from the commission are as provided in Section 59-1-1410 .

152 Section 4. Effective date -- Retrospective operation.
153 (1) Subject to Subsection (2), this bill takes effect on May 8, 2012.
154 (2) This bill applies retrospectively to a refund request that is pending on, or filed on or
155 after, September 27, 2011.




Legislative Review Note
as of 2-22-12 5:36 PM

Office of Legislative Research and General Counsel