commission decision 16-1994 - utah state tax commission · the commission agenda… (petitioner’s...

16-1994

TAX TYPE: PROPERTY TAX

TAX YEAR: 2014, 2015, 2016

DATE SIGNED: 02/14/2019

COMMISSIONERS: J. VALENTINE, M. CRAGUN, R. ROCKWELL, L. WALTERS

GUIDING DECISION

BEFORE THE UTAH STATE TAX COMMISSION

TAXPAYER,

Petitioner,

v.

BOARD OF EQUALIZATION OF

COUNTY, STATE OF UTAH,

Respondent.

FINDINGS OF FACT, CONCLUSIONS

OF LAW, AND FINAL DECISION

Appeal No. 16-1994

Account No. #####

Tax Type: Personal Property

Tax Year: 2014, 2015, and 2016

Judge: Marshall

This Order may contain confidential "commercial information" within the meaning of Utah Code

Sec. 59-1-404, and is subject to disclosure restrictions as set out in that section and regulation

pursuant to Utah Admin. Rule R861-1A-37. Subsection 6 of that rule, pursuant to Sec. 59-1-

404(4)(b)(iii)(B), prohibits the parties from disclosing commercial information obtained from the

opposing party to nonparties, outside of the hearing process. Pursuant to Utah Admin. Rule R861-

1A-37(7), the Tax Commission may publish this decision, in its entirety, unless the property

taxpayer responds in writing to the Commission, within 30 days of this notice, specifying the

commercial information that the taxpayer wants protected. The taxpayer must send the response

via email to [email protected], or via mail to the address listed near the end of this decision.

Presiding:

Rebecca Rockwell, Commissioner

Jan Marshall, Administrative Law Judge

Appearances:

For Petitioner: REPRESENTATIVE FOR TAXPAYER-1, Attorney for Petitioner

REPRESENTATIVE FOR TAXPAYER-2, CEO A-Fab Engineering

REPRESENTATIVE FOR TAXPAYER-3, Mining Consultant

For Respondent: REPRESENTATIVE FOR RESPONDENT-1, Deputy COUNTY Attorney

REPRESENTATIVE FOR RESPONDENT-2, COUNTY Assessor

REPRESENTATIVE FOR RESPONDENT-3, COUNTY Assessor's Office

STATEMENT OF THE CASE

This matter came before the Utah State Tax Commission for a Formal Hearing on September 6,

2018, in accordance with Utah Code Ann. §59-2-1006 and §63G-4-201 et seq. Based upon the evidence

and testimony presented at the hearing, the Tax Commission hereby makes its:

FINDINGS OF FACT

mailto:[email protected]

Appeal No. 16-1994

2

1. On August 1 2016, the COUNTY Board of Equalization (“County”) issued a letter indicating it

would not accept or consider appeals for any of the years at issue because they were filed after the

deadline set in Utah Code Ann. §59-2-306. (BOE Record).

2. On November 7, 2016, the County issued a letter indicating that it had considered the 2016 tax

year appeal on its merits, and confirmed that the 2014 and 2015 tax years were denied, as they

were not timely filed. The letter also indicated that it was the formal denial of the appeals. (BOE

Record and Petitioner’s Exhibit L).

3. On December 5, 2016, the Petitioner (“Taxpayer”) timely filed a Request for Redetermination of

County Board of Equalization Decision for the 2014, 2015, and 2016 tax years.

4. For the 2014 and 2015 tax years, the Commission’s decision is limited to whether the County

properly denied/dismissed the appeals for being untimely in accordance with Administrative Rule

R861-1A-9.

5. The subject property is longwall mining equipment.

6. For the 2013 tax year, the Property Tax Division of the Utah State Tax Commission assessed the

equipment. (Respondent’s Exhibit A).

7. REPRESENTATIVE FOR RESPONDENT-2, the COUNTY Assessor testified. She has been the

Assessor since January 2011; however, she has worked for the Assessor’s Office since November

1996.

8. REPRESENTATIVE FOR RESPONDENT-2 testified that it is the practice of the Assessor’s

Office to mail out a cover letter and a Signed Statement to each business property owner in

January. She stated that they “batch” print the notices sent out countywide in January.

REPRESENTATIVE FOR RESPONDENT-2 stated that their system automatically updates the

date of a notice if another copy is printed.

9. For the 2014 tax year, the COUNTY Assessor sent a cover letter and a Signed Statement of

Personal Property to the Taxpayer, in care of REPRESENTATIVE FOR TAXPAYER-2 at an

address of ADDRESS-1, in CITY. Both the cover letter and the Signed Statement of Personal

Property indicate that the Signed Statement was due by May 15, 2014. In addition, the Signed

Statement notes that a taxpayer dissatisfied with the taxable value may appeal by filing an

application no later than May 15, 2014. (Respondent’s Exhibits C and D).

10. REPRESENTATIVE FOR TAXPAYER-2 testified that the Taxpayer had not been at the 300

West address since 2011. He stated that the business moved to ADDRESS-2, in CITY.

11. COUNTY uses a computer system, known as COINS, to track notes, comments, or other

information about accounts. The COINS system had an entry dated March 13, 2014. The notes

indicated that NAME-1 called and said that the value was too high, per an appraisal. However,

Appeal No. 16-1994

3

the notes indicate that the Taxpayer had not sent the appraisal as of that date. (Respondent’s

Exhibit B).

12. REPRESENTATIVE FOR TAXPAYER-2 testified that NAME-1 was the attorney for Taxpayer

at that time. However, he had no explanation as to why NAME-1 called the County to say that the

value was too high, or why NAME-1 did not provide the County with an updated address.

13. REPRESENTATIVE FOR RESPONDENT-2 testified that the County did not receive a Signed

Statement from the Taxpayer for the 2014 tax year.

14. The County issued billing notices to the Taxpayer for the 2014 tax year in June 2014, July 2014,

August 2014, September 2014, October 2014, November 2014, December 2014, February 2015,

March 2015, April 2015, May 2015, May 2016, August 2016, October 2016, November 2016,

December 2016, January 2017, and March 2017. The billing notices were all sent to

REPRESENTATIVE FOR TAXPAYER-2 at the ADDRESS-1, CITY address, and included

updated balances due to account for penalty and interest charges. (Respondent’s Exhibit E).



address of ADDRESS-3 in CITY. Both the cover letter and the Signed Statement of Personal



application no later than May 15, 2015. (Respondent’s Exhibits F and G).

16. REPRESENTATIVE FOR TAXPAYER-2 testified that the Taxpayer only had the P.O. Box for a

period of about nine months; however, he could not remember the exact dates.

17. The COINS system had an entry dated February 24, 2015 indicating that mail was returned and

there was a new mailing address for 2015. (Respondent’s Exhibit B).

18. REPRESENTATIVE FOR RESPONDENT-2 testified that the personal property manager would

have changed the address if the mail was returned and had a new address.

19. The County issued billing notices to the Taxpayer for the 2015 tax year in May 2016, June, 2016,

August 2016, October 2016, November 2016, December 2016, January 2017, and March 2017.

The billing notices were all sent to REPRESENTATIVE FOR TAXPAYER-2 at the ADDRESS-

3, CITY address, and included updated balances due to account for penalty and interest charges.

(Respondent’s Exhibit H).



address of ADDRESS-2 in CITY. Both the cover letter and the Signed Statement of Personal


Appeal No. 16-1994

4


application no later than May 15, 2016. (Respondent’s Exhibits I and J).

21. The County issued billing notices to the Taxpayer for the 2016 tax year in June 2016, August

2016, October 2016, November 2016, December 2016, January 2017, and March 2017. The

billing notices were all sent to REPRESENTATIVE FOR TAXPAYER-2 at the ADDRESS-2,

CITY address, and included updated balances due to account for penalty and interest charges.

(Respondent’s Exhibit K).

22. On May 17, 2016, NAME-2 sent an email to REPRESENTATIVE FOR RESPONDENT-3,

following up on their telephone conversation, and requesting information on the dollar amount

owed for personal property taxes for the 2012 through 2016 tax years, as well as the assessed

value of the property for those years. (Petitioner’s Exhibit A).

23. REPRESENTATIVE FOR RESPONDENT-3 responded to NAME-2’s email on May 18, 2016,

indicating that she had attached the notices for the 2014 and 2015 tax years, that there was no

prior balance for 2012 or 2013, and that she did not have a statement for 2016 yet, but would

forward it once she received it. (Petitioner’s Exhibit A).

24. REPRESENTATIVE FOR RESPONDENT-3 sent a second email to NAME-2 on May 18, 2016

with links to information on how to appeal. She noted that the time to appeal for the 2014 and

2015 tax years had expired. REPRESENTATIVE FOR RESPONDENT-3 explained the

following with regard to the 2016 tax year,

2016 cannot be appealed if no statement is received in our office. Tax

notices for 2016 will be mailed June 1, 2016. You have 60 days to appeal

from that time, if we have received the signed statement from the

business/property owner. To appeal, you would need to reserve a time on

the commission agenda…

(Petitioner’s Exhibit A).

25. On May 20, 2016, NAME-2 replied to REPRESENTATIVE FOR RESPONDENT-3’s email,

thanking her for the information and expressing interest in appealing the 2016 personal property

tax assessment on the basis that the longwall equipment is inventory. He asked for clarification on

the deadline to appeal, as well as filing the signed statement with the Assessor’s Office.

(Petitioner’s Exhibit A).

26. REPRESENTATIVE FOR RESPONDENT-3 replied to NAME-2’s email on May 20, 2016,

explaining that neither the assessment of the property nor the valuation was appealable if a signed

statement was not provided. She wrote, “We will still accept a statement from AFAB for 2016,

and encourage that they complete one.” REPRESENTATIVE FOR RESPONDENT-3 explained

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5

that if a signed statement was not provided, the Assessor’s Office would complete an estimate,

and mail a tax notice on June 1, 2016. (Petitioner’s Exhibit A).

27. The Taxpayer submitted a Signed Statement, dated May 27, 2016, signed by the Taxpayer’s

representative, REPRESENTATIVE FOR TAXPAYER-1. (Petitioner’s Exhibit D).

28. REPRESENTATIVE FOR RESPONDENT-3 testified on behalf of the County.

REPRESENTATIVE FOR RESPONDENT-3 is the Personal Property Deputy Assessor. She has

held that position since May 16, 2015.

29. REPRESENTATIVE FOR RESPONDENT-3 testified that she reviewed the COINS system to

see if the Taxpayer had submitted any request to have the longwall equipment treated as

inventory, and found none. She further testified that she had no communication with the

Taxpayer, or its representatives, prior to May 15, 2016.

30. REPRESENTATIVE FOR RESPONDENT-2 opined that the Signed Statement was not a timely

filing. She also noted that there was no indication that the Taxpayer was claiming the inventory

exemption, only that there was a line through the “shield hauler” listed on the Signed Statement.

31. On June 17, 2016, Taxpayer’s representative emailed a Request for Review – Personal Property

form to NAME-3. (Petitioner’s Exhibit E).

32. The COUNTY Board of Commissioners reviewed Taxpayer’s personal property tax appeal at a

meeting on August 17, 2016. The Commissioners denied the review with regard to the 2012,

through 2015 tax years, but agreed to evaluate the 2016 tax year. (Petitioner’s Exhibit I).

33. The COUNTY Board of Commissioners specifically addressed the issue of whether the 2016

appeal was timely filed. The Commissioners received input from Deputy County Attorney,

REPRESENTATIVE FOR RESPONDENT-1, as follows:

REPRESENTATIVE FOR RESPONDENT-1 said this does state that the

tax notices for 2016 will be mailed on June 1, 2016. He asked if this was

real property tax notices? REPRESENTATIVE FOR RESPONDENT-2

said no, this is personal property tax notices. REPRESENTATIVE FOR

RESPONDENT-1 said then it says you have sixty days to appeal from

that time if we have received the signed statement from the business

property owner. REPRESENTATIVE FOR RESPONDENT-1 thinks this

does indicate that we would accept an appeal for 2016. Regardless of

what the statute says we would accept an appeal and that the court would

bind us by that representation. REPRESENTATIVE FOR

RESPONDENT-1 thinks there are grounds to hear the appeal for 2016 in

order to make a decision on whether it should be classified as inventory

instead of real property. REPRESENTATIVE FOR RESPONDENT-1’s

question is whether there is enough information in the appeal. In 2016, it

indicates that there are equipment and supplies valued at $$$$$.

NAME-4 said in regards to 2012, 2013, 2014, and 2015, he made a

motion to deny the appeal and leave the 2016 open subject to receiving

Appeal No. 16-1994

6

all of the documentation to review that appeal. NAME-2 said he has sent

that information to the Assessor’s Office.

(Petitioner’s Exhibit I).

34. The COUNTY Commissioners allowed the Taxpayer until August 30, 2017 to provide any

additional information, and indicated they would make a decision at their next Commission

meeting, scheduled for September 7, 2016. (Petitioner’s Exhibit I).

35. REPRESENTATIVE FOR TAXPAYER-2 is currently the President/CEO of Taxpayer. He has

been an employee of Taxpayer since 2007, but has been in his current position since 2015.

36. REPRESENTATIVE FOR TAXPAYER-2 testified that the Taxpayer is engaged in the business

of structural steel fabrication. He stated that at one time, part of their business involved

fabricating/refurbishing equipment.

37. REPRESENTATIVE FOR TAXPAYER-2 stated that the Taxpayer purchased the longwall

equipment in 2007, rebuilt it, and then sold it to BUSINESS-1 through a 5-year capital lease.

BUSINESS-1 took possession of the longwall equipment in October 2008. BUSINESS-1 went

into bankruptcy, and the Taxpayer took possession of the longwall equipment.

38. REPRESENTATIVE FOR TAXPAYER-3 testified that he is a mining engineer, and was the

president of BUSINESS-1. He was hired by the Taxpayer in 2011 to remove the longwall system

from the WORDS REMOVED, as ordered by the bankruptcy trustee.

39. REPRESENTATIVE FOR TAXPAYER-3 explained that the bankruptcy was involuntary. He

stated that the trustee was trying to sell BUSINESS-1’s assets, and discovered the lease

agreement, and asked the Taxpayer to remove the longwall equipment. REPRESENTATIVE

FOR TAXPAYER-3 stated that the trustee then filed a claim against Taxpayer that BUSINESS-1

was actually the owner of the equipment. He stated that the Taxpayer gained ownership of the

property in 2014 through a settlement with the trustee.

40. REPRESENTATIVE FOR TAXPAYER-3 testified that to his knowledge the longwall equipment

was not operational. He stated that there are parts of the equipment that need to be rebuilt and/or

refurbished.

41. REPRESENTATIVE FOR TAXPAYER-3 stated that the Taxpayer asked him to contact NAME-

5 to market the longwall equipment.

42. Taxpayer provided a signed statement from NAME-5 dated December 6, 2016. (Petitioner’s

Exhibit G).

43. NAME-5 owns BUSINESS-2, a business he started in 2007 to “act as an agent in connecting

companies in the procurement of mining equipment.” (Petitioner’s Exhibit G).

Appeal No. 16-1994

7

44. The Taxpayer contacted NAME-5 in July 2012 and requested help marketing and selling the

longwall equipment. (Petitioner’s Exhibit G).

45. As of December 6, 2016, the longwall equipment was listed as available for sale on BUSINESS-

2’s website. (Petitioner’s Exhibit G).

ARGUMENTS

The Taxpayer’s representative argued that the 2016 appeal was timely under Utah Code Ann.

§59-2-1005. He stated that under Utah Code Ann. §59-2-306(2)(c), if a signed statement is requested after

March 16, there is a 60 day period to file an appeal. It is the Taxpayer’s position that the May 20, 2016

email from REPRESENTATIVE FOR RESPONDENT-3 was such a request for a signed statement. The

Taxpayer’s representative stated that not only did the County Board of Commissioners accept the appeal,

it issued a decision on the merits, denying the appeal.

The Taxpayer’s representative further argued that the County improperly classified the

equipment. He maintains that the Taxpayer never used the property, and that it was held for sale as

inventory. The Taxpayer’s representative stated that the lease should be treated as a sale. He noted that a

capital lease is one that is for more than 75% of the useful life of the property; and that the longwall

equipment had a useful life of 5.5 years, and was leased for a period of 5 years.

The Taxpayer’s representative argued that for the 2014 and 2015 tax years, the County had no

authority to tax, as the equipment was inventory. He cited to Moss v. Board of Com’rs of CITY, 261 P.2d

961 (1953) for the position that an entity cannot tax greater than the authority allowed. The Taxpayer’s

representative further argued that the County failed to adequately provide notice, violating its due process.

He argued that the deadline to appeal should be tolled until 2016, when the Taxpayer had actual notice of

the assessment.

The County’s representative argued that the Tax Commission does not have jurisdiction to hear

the appeals for any of the tax years at issue. He argued that there were no Personal Property Statements

filed by the Taxpayer for the 2014 or 2015 tax years, and that the Personal Property Statement for the

2016 tax year was filed late. The County’s representative argued that whatever the County Board of

Commissioners considered, it was not an appeal of the personal property assessment, because the Board

did not have jurisdiction. He maintains that the County’s actions were more akin to a proceeding under

Utah Code Ann. §59-2-1347, or even an “informal opportunity.” The County’s representative stated that

the Taxpayer did not request an extension of the appeal deadline, and further argued that the County could

not extend a deadline that had already passed.

The County’s representative argued that it is the Taxpayer’s responsibility to notify the County of

a change in address. He argued that the County can only provide notice based on the information it has.

Appeal No. 16-1994

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APPLICABLE LAW

Utah Code Ann. §59-2-1005(1) provides procedures for appealing a personal property assessment

as set forth below in pertinent part:

(a) A taxpayer owning personal property assessed by a county assessor under Section

59-2-301 may make an appeal relating to the value of the personal property by filing

an application with the county legislative body no later than: (i) the expiration of the

time allowed under Section 59-2-306 for filing a signed statement, if the county

assessor requests a signed statement under Section 59-2-306; or (ii) 60 days after the

mailing of the tax notice, for each other taxpayer.

(b) A county legislative body shall: (i) after giving reasonable notice, hear an appeal

filed under Subsection (1)(a); and (ii) render a written decision on the appeal within

60 days after receiving the appeal.

(c) If the taxpayer is dissatisfied with a county legislative body decision under

Subsection (1)(b), the taxpayer may file an appeal with the commission in accordance

with Section 59-2-1006.

A person may appeal a decision of a county board of equalization, as provided in Utah Code Ann.

§59-2-1006, in pertinent part, below:

(1) Any person dissatisfied with the decision of the county board of equalization

concerning the assessment and equalization of any property, or the determination of

any exemption in which the person has an interest, may appeal that decision to the

commission by filing a notice of appeal specifying the grounds for the appeal with

the county auditor within 30 days after the final action of the county board…

Deadlines for filing the signed statement are set out at Utah Code Ann. §59-2-306 and provide in

pertinent part:

(1) (a) The county assessor may request a signed statement from any person setting forth

all the real and personal property assessable by the assessor which is owned,

possessed, managed, or under the control of the person at 12 noon on January 1.

(b) A request under Subsection (1)(a) shall include a notice of the procedure under

Section 59-2-1005 for appealing the value of the personal property.

(2) (a) Except as provided in Subsection (2)(b) or (c), a signed statement described in

Subsection (1) shall be filed on or before May 15 of the year the statement

described in Subsection (1) is requested by the county assessor.

(b) For a county of the first class, the signed statement described in Subsection (1)

shall be filed on the later of:

(i) 60 days after requested by the assessor; or

(ii) on or before May 15 of the year the statement described in Subsection (1) is

requested by the county assessor if, by resolution, the county legislative body

of that county adopts the deadline described in Subsection (2)(a).

(c) If a county assessor requests a signed statement described in Subsection (1) on or

after March 16, the person shall file the signed statement within 60 days after

requested by the assessor.

Utah Code Ann. §59-2-307(3) provides that if a taxpayer fails to submit a signed statement, the

assessor is to make an estimate and the value set cannot be reduced, below in relevant part:

Appeal No. 16-1994

9

(a) If an owner neglects or refuses to file a signed statement requested by an

assessor as required under Section 59-2-306:

(i) the assessor shall:

(A) make a record of the failure to file; and (B) make an estimate of the

value of the property of the owner based on known facts and

circumstances…

(b) The value fixed by the assessor in accordance with Subsection (3)(a)(i) may

not be reduced by the county board of equalization or by the commission.

The Commission has promulgated Administrative Rule R861-1A-9 regarding appeals from the

County, which provide as follows in relevant part:

(5) Appeals to the commission shall be on the merits except for the following:

(a) dismissal for lack of jurisdiction;

(b) dismissal for lack of timeliness…

(7) On an appeal from a dismissal by a county board for the exceptions under Subsection

(5), the only matter that will be reviewed by the commission is the dismissal itself,

not the merits of the appeal.

Utah Code Ann. §59-2-103 provides for the assessment of property, as follows:

(1) All tangible taxable property located within the state shall be assessed and taxed at a

uniform and equal rate on the basis of its fair market value, as valued on January 1,

unless otherwise provided by law.

Utah Code Ann. §59-2-1114, provides an exemption for inventory, as follows:

(1) Tangible personal property present in Utah on the assessment date, at noon, held for

sale in the ordinary course of business or for shipping to a final out-of-state

destination within 12 months and which constitutes the inventory of any retailer,

wholesaler, distributor, processor, warehouseman, manufacturer, producer, gatherer,

transporter, storage provider, farmer, or livestock raiser, is exempt from property

taxation.

(2) This exemption does not apply to:

(a) inventory which is not otherwise subject to personal property taxation…

(b) "Inventory" means all items of tangible personal property described as materials,

containers, goods in process, finished goods, severed minerals, and other

personal property owned by or in possession of the person claiming the

exemption…

(4) The commission may adopt rules to implement the inventory exemption.

The Commission adopted Administrative Rule R884-24P-33, which provides in relevant part:

(4) Other taxable personal property that is not included in the listed classes

includes…

(b) Equipment leased or rented from inventory is subject to ad valorem tax. Refer to

the appropriate property class schedule to determine taxable value.

(c) Property held for rent or lease is taxable, and is not exempt as inventory. For

entities primarily engaged in rent-to-own, inventory on hand at January 1 is

exempt and property out on rent-to-own contracts is taxable.

Appeal No. 16-1994

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The Utah courts have held that property tax exemptions are strictly construed. The Utah Supreme

Court stated in Loyal Order of the Moose v. Salt Lake County Board of Equalization, 657 P.2d 257 (Utah

1982) “in view of the important policy consideration that the burdens of taxation should be shared

equitably, the general rule is that the language of the exemption should be strictly construed.” See also

Union Oil Company of California v. Utah State Tax Commission, 222 P.3d 1158 (Utah 2009), quoting

Parson Asphalt Inc. v. Utah State Tax Commission, 617 P.2d 397, 398 (Utah 1980) in which the Court

stated “exemptions should be strictly construed and one who so claims has the burden of showing he is

entitled to the exemption.”

CONCLUSIONS OF LAW

A. The County properly denied the Taxpayer’s appeal of the personal property tax assessments for the

2014 and 2015 tax years, as the Taxpayer did not timely file. The Taxpayer contends that it did not

have proper notice, as the County did not mail the signed statements to the Taxpayer’s current

business address. For the 2014 tax year, a representative for the Taxpayer called the County

specifically about the value of the property prior to the due date for the signed statement. However,

the Taxpayer did not file a signed statement for the 2014 tax year. For the 2015 tax year, the signed

statement was sent to a P.O. Box. The County’s records indicate that mail had been returned, and

there was a new mailing address for the Taxpayer. The Taxpayer acknowledged that the P.O. Box

belonged to the Taxpayer for a period of about nine months, but could not remember the dates. In this

case, the County was mailing the signed statements to the Taxpayer at its address on file. The

Taxpayer does not contend it ever provided a different address of record to the County. There is no

indication that the County’s actions denied the Taxpayer due process, and it is clear from the record

that the Taxpayer certainly received the signed statement for the 2014 tax year.

Utah Code Ann. §59-2-1005(1) provides that a taxpayer may appeal the value of personal

property by filing an application with the county legislative body no later than the expiration of time

allowed under Utah Code Ann. §59-2-306 for filing a signed statement, or 60 days after the mailing

of the tax notice. The Taxpayer failed to file an application appealing the value of personal property

with the county legislative body by the due date provided in Utah Code Ann. §59-2-306 for the 2014

and 2015 tax years. Accordingly, the County denied the Taxpayer’s appeals. The Commission notes

that unlike appeals for real property under Utah Code Ann. §59-2-1004, there is no express provision

that allows for an extension of the deadline.1 Further, Utah Code Ann. §59-2-307(3)(a) provides that

if an owner has neglected or refused to file a signed statement, the assessor is mandated to estimate

1 Utah Code Ann. §59-2-1004(2)(b) authorizes the Commission to adopt a rule setting out the circumstances under

which the County Board is required to accept a late filed real property appeal. The Commission has done this in

Administrative Rule R884-24P-66. However, the Commission declines to address whether R884-24P-66 applies to

personal property appeals.

Appeal No. 16-1994

11

the value of the property. Subsection (3)(b) specifically provides that once the assessor has estimated

the value, neither the Board of Equalization nor the Commission may reduce it. Thus, the County

properly dismissed the Taxpayer’s appeal for the 2014 and 2015 tax years. Further, there is no basis

under which the Commission could adjust the value estimated by the assessor for those years.

B. The County’s motion to dismiss the Taxpayer’s 2016 appeal for not being timely filed is denied.

Whether an appeal is timely filed is a threshold jurisdictional requirement. Utah Code Ann. §59-2-

1005(1) provides that a taxpayer may appeal the value of personal property by filing an application

with the county legislative body by no later than the expiration of time allowed under Utah Code

Ann. §59-2-306 for filing a signed statement. Subsection (2)(c) of Utah Code Ann. §59-2-306

provides, “if a county assessor requests a signed statement described in Subsection (1) on or after

March 16, the person shall file the signed statement within 60 days after requested by the assessor.” It

appears that the County treated REPRESENTATIVE FOR RESPONDENT-3’s email to

REPRESENTATIVE FOR TAXPAYER-1 as a request for a signed statement. REPRESENTATIVE

FOR RESPONDENT-3’s May 20, 2016 email to REPRESENTATIVE FOR TAXPAYER-1 stated

that the Assessor’s Office would still accept the signed statement, and encouraged the Taxpayer to

file. Given the circumstances, the County’s treatment of the email exchange as a request for a signed

statement does not appear to be unreasonable. The Taxpayer submitted the Signed Statement on May

27, 2016, within the 60 days prescribed under Utah Code Ann. §59-2-306(2)(c). Thus, the Taxpayer’s

appeal to the County was timely.

C. The longwall mining equipment was held as inventory, and thus is exempt under Utah Code Ann.

§59-2-1114. The testimony of REPRESENTATIVE FOR TAXPAYER-3 was that he was hired by

the Taxpayer to remove the equipment from the mine, once Taxpayer took possession of the property.

He also testified that the Taxpayer asked him to contact NAME-5 to market the equipment. The

signed statement from NAME-5 indicates that in July 2012, the Taxpayer requested that he help

market and attempt to sell the longwall equipment, and as of the date of the statement, it was listed as

available for sale on his company’s website. The County offered no evidence or testimony to refute

that the Taxpayer had asked NAME-5 to market and sell the longwall equipment. Thus, it should be

exempt as inventory held for sale in the ordinary course of business, and the personal property tax for

the 2016 tax year should be abated.

Jan Marshall

Administrative Law Judge

DECISION AND ORDER

Appeal No. 16-1994

12

Based on the foregoing, the Commission finds that the County properly denied the appeals for the

2014 and 2015 tax years as they were not timely filed. For the 2016 tax year, the County’s request to

dismiss is denied; the subject personal property was exempt from property tax as inventory. The

COUNTY Auditor is hereby ordered to adjust its records accordingly for the 2016 tax year. It is so

ordered.

DATED this ___________day of __________________, 2019.

John L. Valentine Michael J. Cragun

Commission Chair Commissioner

Rebecca L. Rockwell Lawrence C. Walters

Commissioner Commissioner

Notice of Appeal Rights: You have twenty (20) days after the date of this order to file a Request for

Reconsideration with the Tax Commission Appeals Unit pursuant to Utah Code Ann. §63G-4-302. A

Request for Reconsideration must allege newly discovered evidence or a mistake of law or fact. If you do

not file a Request for Reconsideration with the Commission, this order constitutes final agency action.

You have thirty (30) days after the date of this order to pursue judicial review of this order in accordance

with Utah Code Ann. §59-1-601 et seq. and §63G-4-401 et seq.

commission decision 16-1994 - utah state tax commission · the commission agenda… (petitioner’s...

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