No. 40966 (5-year Review): Rule R861-1A. Administrative Procedures

DAR File No.: 40966
Filed: 11/10/2016 09:28:58 AM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Section 10-1-405 requires the Tax Commission to follow the same procedures for the enforcement of the municipal telecommunications tax that it follows for the enforcement of sales taxes. Section 41-1a-209 requires the Motor Vehicle Division to supply automobile registration forms; specifies what the forms shall include. Section 41-3-209 requires the Motor Vehicle Enforcement Division to notify the public if a license issued by that division is no longer valid. Section 52-4-207 provides that a public body may not hold an electronic meeting unless it has adopted a rule governing those proceedings; and provides criteria an agency must follow in drafting those rules. Section 59-1-205 requires the governor to appoint one member of the Commission as chairperson; three members of the commission constitute a quorum for the transaction of business; requires that Commission be in session during regular business hours; allows Commission to hold sessions or conduct business at any place in the state. Section 59-1-207 requires Tax Commission to prepare and implement a plan for the administration of the divisions and other offices in the Tax Commission, that do not report directly to the Commission; duties and responsibilities to be delegated to the executive director. Section 59-1-210 defines powers and duties of Tax Commission; includes power to adopt rules and policies consistent with the Constitution and laws of the State of Utah. Section 59-1-301 allows a taxpayer to pay under protest and outlines the actions to recover the taxes paid under protest. Section 59-1-304 places limitations on when a class action may be maintained on an action that relates to a tax or a fee; indicates who may be included in the class action; and places limitations on the recovery by members of a class. Section 59-1-401 establishes penalties for failure to file a tax return or failure to pay tax, including criminal penalties, and allows a waiver for reasonable cause. Section 59-1-403 sets forth prohibitions on disclosure of taxpayer information by the commission and provides exceptions to that general prohibition. Section 59-1-404 defines commercial information and limits the disclosure of commercial information obtained from a property taxpayer. Section 59-1-405 requires the Commission to promulgate a rule to establish procedures for a meeting not open to the public, including requirements for minutes and a recording of meetings not open to the public. Section 59-1-501 allows any taxpayer in the state to file a request for agency action, petitioning the Commission for redetermination of a deficiency. Section 59-1-502.5 requires an initial hearing to be held at least 30 days before any formal hearing is held; outlines procedures of initial hearing. Section 59-1-611 requires a taxpayer who is seeking judicial review of a Commission decision to post a bond or deposit the full amount of the taxes, interest, and penalties with the Commission unless the taxpayer meets certain requirements that satisfy a waiver of this requirement. Section 59-1-705 provides that penalties and interest shall be assessed and collected in the same manner as taxes. Section 59-1-1404 provides that the commission may make rules designating delivery services the commission or a person may use to mail a document, and providing procedures for determining the date a delivery service records or marks a document as having been received by the delivery service for delivery. Section 59-1-1410 requires the commission to refund taxes that have been paid in error; and provides the time frame within which a taxpayer may request a refund. Section 59-2-212 requires the Tax Commission to equalize and adjust the valuation of all taxable property in the state; allows Tax Commission to reassess any property it feels has been under or over assessed. Section 59-2-704 requires Commission to publish studies designed to determine the relationship between the market value shown on the assessment roll and the market value of property in each county; Commission to order each county to factor or adjust assessment rates using the most current Commission studies, provides penalties if a county fails to properly implement adjustments; allows Commission to establish procedures for factor order hearings. Section 59-2-1004 sets guidelines for appeals of property tax assessments to the county board of equalization. Section 59-2-1006 provides that persons who are not satisfied with the decision of the board of equalization concerning the assessment and equalization of property may appeal that decision to the Tax Commission; provides procedures for appealing the board of equalization decision; indicates the Tax Commission duties in such an appeal. Section 59-2-1007 sets guidelines for appeals of property tax assessments; requires Tax Commission to provide adequate notice to the county when adjusting an assessment. Section 59-5-104 requires producers of oil or gas within the state to file an annual statement with the Tax Commission. Section 59-5-204 requires those engaged in mining or extracting metalliferous minerals to file an annual statement with the Tax Commission. Section 59-6-104 applies provisions of Title 59, Chapter 10, Part 4, individual income tax withholding, to withholding of mineral production taxes. Section 59-7-505 requires returns to be signed by a responsible officer of the corporation. Section 59-7-506 requires corporations to keep records relating to corporate franchise and income tax. Section 59-7-517 allows the Tax Commission to send a notice of deficiency if the commission determines that there is a deficiency in a taxpayer's corporate franchise tax. Section 59-8-105 requires a semiannual return from those upon whom the gross receipts tax is imposed. Section 59-8a-105 requires a semiannual return from electrical corporations that are subject to the gross receipts tax. Section 59-10-501 requires individual taxpayers to maintain records of income tax liability. Section 59-10-512 requires returns to be signed in accordance with forms or rules prescribed by the Tax Commission; requires partnership returns to be signed by any one of the partners. Section 59-12-107 provides guidelines for collection, remittance, and payment of sales and use tax. Section 59-12-110 provides the time frame within which a person may apply to the commission for a sales tax refund. Section 59-12-111 requires all those who possess a license to keep records of all sales made; provides a penalty for those without a sales tax license or use tax registration who have a liability, but do not file a sales and use tax return. Section 59-12-114 permits a taxpayer to object to a notice of deficiency or notice of assessment. Section 59-12-118 provides that the Commission has exclusive authority to administer and enforce the state and local sales taxes, including the promulgation of rules to administer and enforce these taxes. Section 59-13-206 outlines monthly statements to be filed by every distributor of motor fuel; provides a penalty for failure to file the monthly statement. Section 59-13-210 allows Tax Commission to promulgate rules to administer motor fuel tax; also allows the examination of monthly reports filed by motor fuel distributors. Section 59-13-211 requires distributors to keep a record of all purchases, receipts, sales, and distribution of motor fuel. Section 59-13-307 requires suppliers of special fuel to file a monthly report with the tax commission; provides a penalty for non-filers. Section 59-13-312 requires users, suppliers, and any other person importing, manufacturing, refining, dealing in, transporting, or storing special fuel to keep records to substantiate all activity of that fuel; records to be kept for a period of three years. Section 59-13-403 applies all administrative and penalty provisions of Part 2, Motor Fuel to Part 4, Aviation Fuel. Section 59-14-303 requires quarterly returns and payment of tax on all tobacco products; provides penalties for failure to file return or pay tax. Section 59-15-105 requires monthly returns to be filed by all those importing beer for sales, use, or distribution in the state of Utah; also requires those filing returns to keep records of activity relating to beer imports for three years. Section 63G-3-201 indicates when rulemaking is required. Section 63G-4-102 defines the scope and applicability of the administrative procedures act. Section 63G-4-201 requires all adjudicative proceedings to be commenced by a notice of agency action, or a request for agency action. Law also provides procedures for filing and serving agency action notices. Section 63G-4-202 gives rulemaking power to agencies to designate adjudicative proceedings as formal and informal. Section 63G-4-203 requires an agency that enacts a rule designating one or more category of adjudicative proceedings as informal adjudicative proceedings, to prescribe by rule procedures for the informal adjudicative proceedings. Section 63G-4-204 through 63G-4-209 outline procedures for agency formal and informal adjudicative proceedings. Section 63G-4-205 establishes procedures for discovery in formal adjudicative proceedings if an agency has not enacted rules on discovery. Section 63G-4-206 establishes procedures to be followed when conducting a formal adjudicative proceeding, including the use of evidence. Section 63G-4-208 establishes procedures an agency must follow when conducting a formal adjudicative proceeding; including the signing and issuance of orders. Section 63G-4-302 allows an individual to file a request for reconsideration within 20 days of a final agency action. Section 63G-4-401 allows a party to obtain judicial review of a final agency action; requires exhaustion of administrative remedies prior to seeking judicial review, with exceptions. Section 63G-4-503 allows any person to file a request that the agency issue a declaratory order; outlines agency action when issuing a declaratory order. Section 68-3-7 provides that when computing the time in which an act provided by law is to be done, the last day is included unless the last day is a holiday. Section 68-3-8.5 provides when a report or payment to the government is considered to be filed or made. Section 69-2-5 requires the Commission to follow the same procedures for the enforcement of the 911 emergency telecommunications service charge that it follows for the enforcement of sales taxes. Section 76-8-502 allows a person to be found guilty of a second-degree felony for making a false or inconsistent material statement under oath. Section 76-8-503 allows a person to be found guilty of a class B misdemeanor for making a false statement under oath if the false statement occurs in an official proceeding or is made to mislead a public servant in performing his official functions.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

No written comments were received.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

Section R861-1A-2 clarifies the process by which the Tax Commission makes rules, including notice, hearing, and publication of rules. Section R861-1A-3 allows persons or parties affected by a commission action the right to a division conference and a prehearing conference for the purpose clarifying and narrowing the issues and encouraging settlement. Section R861-1A-9 clarifies duties and responsibilities of the commission when acting as the Utah State Board of Equalization; provides procedures for a person to file an appeal of a county board of equalization determination with the commission. Section R861-1A-10 provides instructions concerning: 1) rights of parties; 2) effect of partial invalidation of rules; 3) enactment of inconsistent legislation; and 4) presumption of familiarity. Section R861-1A-11 clarifies the process of appealing a corrective action. Section R861-1A-12 outlines the policies and procedures of the commission regarding disclosure of and access to documents, work papers, decisions, and other information prepared by the commission. Section R861-1A-13 outlines the manner by which disabled persons may request reasonable accommodations to services, programs, activities, or a job or work environment at the Tax Commission. Section R861-1A-15 requires all taxpayers to provide the Tax Commission with their social security number or federal identification number, as required by the Tax Commission. Section R861-1A-16 outlines the management plan of the Utah State Tax Commission. Section R861-1A-18 indicates how remittances received by the Tax Commission shall be allocated to penalty, interest and tax. Section R861-1A-20 provides guidelines on the timeliness of requests for a hearing to correct a centrally assessed property tax assessment, a petition for redetermination, and those seeking judicial review. Section R861-1A-22 clarifies the time a petition for adjudicative action may be filed and the contents of the petition; does not allow the Tax Commission to reject a petition because of nonconformance, but allows the Tax Commission to require an amended or substitute petition be filed. Section R861-1A-23 requires all matters to be designated as formal proceedings and set for a prehearing conference, initial hearing, or scheduling conference; and allows matters to be diverted to mediation. Section R861-1A-24 provides guidelines for a formal adjudicative proceeding, including the initial hearing. Section R861-1A-26 outlines procedures to be followed in a formal adjudicative proceeding. Section R861-1A-27 establishes discovery procedures in a formal proceeding. Section R861-1A-28 authorizes formal proceedings to be conducted the same as in judicial proceedings in the state court; and allows every party the right to introduce evidence, and provides guidelines on testimonies. Section R861-1A-29 clarifies that the presiding officer shall submit all written decisions and orders to the Tax Commission for agency review before issuing the order; authorizes any party to file a written request for reconsideration alleging mistake of law or fact, or discovery of new evidence. Section R861-1A-30 prohibits any party from having an ex parte communication with a commissioner or administrative law judge; and provides guidelines if relevant ex parte communications are received by a commissioner or administrative law judge. Section R861-1A-31 provides for situations when a petition for a declaratory order may be filed; and authorizes the Tax Commission to refuse to render the order under certain circumstances. Section R861-1A-32 authorizes the use of mediation to obtain a settlement agreement. Section R861-1A-33 defines "settlement agreement"; and outlines procedures to be followed for submitting and approving settlement agreements. Section R861-1A-34 defines private letter rulings; provides procedures for requesting a private letter ruling; and indicates the weight afforded a private letter ruling, as well as actions that may be taken if the ruling leads to the denial of a claim, audit assessment, or other agency action. Section R861-1A-35 defines "database management system," "electronic data interchange," "hard copy," "machine-sensible record," "storage-only imaging system," and "taxpayer"; and provides guidelines for storage of records in various media. Section R861-1A-36 clarifies what constitutes a signature for taxpayers who submit a vehicle registration over the internet, or a tax return through an authorized web site. Section R861-1A-37 defines "assessed value of the property," "disclosure," and "published decision;" and indicates property tax information that may be disclosed, in general, during an action or proceeding, or in a published decision. Section R861-1A-38 indicates the actions the Tax Commission may take to expedite exhaustion of administrative remedies for purposes of determining the persons who may be included in a class action. Section R861-1A-39 defines "failure to file a tax return" and "unpaid tax" for purposes of imposing the penalty for failure to file a tax return. Section R861-1A-40 indicates how a taxpayer that seeks judicial review of a final commission determination of a deficiency may apply for a waiver of the requirement to post a bond with the Tax Commission. Section R861-1A-42 provides the circumstances that constitute reasonable grounds for waiver of a penalty. Section R861-1A-43 provides the conditions under which a tax commissioner may participate electronically in a public meeting. Section R861-1A-44 for purposes of determining the date on which a document has been mailed, sets forth delivery services, and the date a delivery service receives a document. Section R861-1A-45 sets forth the procedures the Tax Commission shall follow when the Tax Commission holds a meeting that is not open to the public, including procedures for written and recorded minutes. Section R861-1A-46 defines a purchaser refund request; indicates the information that must be submitted to the commission when submitting a purchaser refund request; and provides procedures for the Tax Commission to verify the accuracy of the purchaser refund request. Therefore, this rule should be continued.

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:

• Christa Johnson at the above address, by phone at 801-297-3901, by FAX at 801-297-3907, or by Internet E-mail at [e-mail]

Effective:

11/10/2016

Authorized by:

Rebecca Rockwell, Commissioner

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