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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


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