A rare win for the petitioner, though this is from 2001 and I don't that SOAH would show such administrative grace these days.
200111695H
HEARING NO. 39,881
RE: **************
TAXPAYER NO: **************
AUDIT OFFICE: N/A
AUDIT PERIOD: 10/01/96 THROUGH 06/30/00
SALES AND USE TAX/RDT
BEFORE THE COMPTROLLER
OF PUBLIC ACCOUNTS
OF THE STATE OF TEXAS
ROY G. SCUDDAY
Administrative Law Judge
ROBERT L. FREDERICK
Representing Administrative Hearings Section
**************
Representing Petitioner
COMPTROLLER'S DECISION
PRELIMINARY DISCUSSION:
This case was heard at an oral hearing held in **************, Texas, on
September 24, 2001. Petitioner ************** was represented at the hearing
by **************, who presented the testimony of PETITIONER. The
Administrative Hearings Section (AHS) was represented by Assistant General
Counsel Robert L. Frederick.
Unless otherwise indicated, all Section references are to Title 2, Texas Tax
Code Annotated, and all Rule references are to sections of Title 34, Texas
Administrative Code.
AGREEMENT OF THE PARTIES:
In its Position Letter, the Administrative Hearings Section (AHS) agreed to
waive penalty and interest.
PETITIONER'S CONTENTION:
Petitioner contends that he relied on information of the Comptroller's office
to his detriment.
FINDINGS OF FACT:
1. ************** (Petitioner) repairs fiberglass boats.
2. Petitioner was assessed CITY A MTA and Crime Control District sales tax for
the periods October 1, 1996, through June 30, 2000. Petitioner timely
requested redetermination of those assessments, resulting in this proceeding.
3. On October 1, 1989, Petitioner moved his operation from CITY A to the
COUNTY A, Texas **************, on the COUNTY B/COUNTY C boundary line. (This
address was for UPS delivery as no mail delivery was available at the
location.) Petitioner went to the CITY A Enforcement Office of the
Comptroller, told them of his new location, and was told that the location was
in CITY B for sales tax purposes. Petitioner had no record of his conversation
other than a copy of the Sales Tax Permit subsequently issued to him by the
Comptroller's office that shows his location to be in CITY B, and the only
local taxation entity to be CITY B.
4. At some point during 2000, the Comptroller's office discovered that
Petitioner's location was actually in the City of CITY A rather than CITY B.
The local sales tax remitted by Petitioner that had been allocated to CITY B
was reallocated to the City of CITY A, and Petitioner was assessed for the
additional sales tax for that jurisdiction. Petitioner pays business personal
property tax to CITY A.
DISCUSSION AND CONCLUSIONS OF LAW:
Petitioner's contention should be granted.
Numerous Comptroller's Decisions have stated that taxpayers must prove each of
the following four elements in order to qualify for relief under the
detrimental reliance policy:
1) the taxpayer provided sufficient information to have led the employee to
provide correct advice;
2) the substance of the information or advice is satisfactorily established
and the advice is shown to have been directly communicated to the taxpayer
(usually the advice must be in writing to establish exactly what advice was
given);
3) the taxpayer followed the advice; and
4) the taxpayer will suffer harm unless the Comptroller adheres to the advice.
Comptroller's Decision Nos. 27,994 (1992), 28,137 (1991), 26,530 (1991), 27,064
(1991), 24,996 (1990), 26,434 and 26,320 (1990), and 21,014 (1988).
The problem facing Petitioner is the lack of written substantiation that the
erroneous taxation jurisdiction was based on sufficient information from
Petitioner. However, the permit shows the erroneous location, and there is
nothing in the record to indicate that Petitioner gave the wrong location to
the Enforcement Office. It is only reasonable to conclude that Petitioner
relied on the Comptroller personnel advice as to what taxing jurisdictions
applied to his location. Accordingly, even without written verification, I
conclude that based on his uncontroverted and reasonably believable oral
testimony, Petitioner gave the correct location to the Enforcement Office,
which proceeded to set him up for the wrong taxing jurisdictions. Inasmuch as
Petitioner was clearly harmed by the error, I recommend that the assessment be
withdrawn.
RECOMMENDATION:
Petitioner's liability should be dismissed.
SIGNED November 15, 2001.
ROY G. SCUDDAY
Administrative Law Judge
HEARING NO. 39,881
ORDER OF THE COMPTROLLER
The above decision of the Administrative Law Judge is approved and adopted in
all respects. This decision becomes final twenty-three (23) days from the date
of this Order.
If a rehearing is desired, a Motion for Rehearing must be filed with the
Administrative Law Judge no later than twenty-three (23) days after the date of
this Order, and must state the grounds upon which the motion is based.
RENDERED and ISSUED November 15, 2001.
CAROLE KEETON RYLANDER
Comptroller of Public Accounts
of the State of Texas
ACCESSION NUMBER: 200111695H
SUPERSEDED: N
DOCUMENT TYPE: H
DATE: 2001-11-15
TAX TYPE: SALES
