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Greater Park City Co. v. Tax Comm'n
LEXSEE 954 p2d 873

Greater Park City Company, a Utah corporation, Petitioner,
v. Tax Commission, Operations Division, Respondent. 

Case No. 970269-CA

COURT OF APPEALS OF UTAH

954 P.2d 873; 1998 Utah App. LEXIS 14; 337 Utah Adv. Rep.
16

February 26, 1998, Filed

PRIOR HISTORY:
[**1] Original Proceeding in this Court.

COUNSEL:
Gordon Strachan and M. Alex Natt, Park City, for Petitioner.

Jan Graham and Clark L. Snelson, Salt Lake City, for Respondent.

JUDGES:
Before Russell W. Bench, Judge. I CONCUR: Norman H. Jackson, Judge. I CONCUR IN
THE RESULT: Pamela T. Greenwood, Judge.

OPINIONBY:
RUSSELL W. BENCH

OPINION:

[*873] OPINION

BENCH, Judge:

Greater Park City Company (GPCC) seeks review of the Utah State Tax
Commission's (Commission) decision denying its claims for a sales tax refund.
The Commission ruled that GPCC lacked standing to claim a refund because it was
not the taxpayer that paid the sales tax. We affirm.

BACKGROUND

GPCC is a Utah corporation that operates the Park City Mountain Resort,
formerly known as the Park City Ski Area. In winter months, GPCC sells tickets
to skiers who ride its ski lifts. GPCC does not permit patrons to use the ski
lifts without a ticket. In summer months, GPCC sells tickets for the use of its
ski lifts, Alpine Slide, Miner's Park amusement rides, and miniature golf
course. n1 Again, GPCC does not permit the use of these facilities without a
ticket. Since [**2] opening the facilities, GPCC has continually remitted sales
tax on all ticket sales.

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n1 Until 1993, GPCC also operated a gondola. The gondola, however, had ceased
operation by the summer of 1993.
PAGE 2
954 P.2d 873, *873; 1998 Utah App. LEXIS 14, **2;
337 Utah Adv. Rep. 16

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After this court's decision regarding taxable admissions in 49th Street
Galleria v. State Tax Commission, 860 P.2d 996 (Utah Ct. App. 1993), GPCC filed
an amended sales tax return seeking the refund of $ 3,054,895.36 in sales taxes
it had remitted to the Commission on the sale of winter lift tickets from June
1991 through June 1994. In the refund request, GPCC claimed that lift ticket
sales were not subject to sales tax as an "admission to a place of amusement,
entertainment, or recreation" under Utah Code [*874] Ann. @ 59-12-103(1)(f)
(1993). n2 The Commission denied GPCC's sales tax refund request, and GPCC filed
a petition for redetermination.

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n2 Because GPCC requests a refund for the period from June 1991 through June
1994, we cite to the version of the statute then in effect. The pertinent
portion of that statute read:

(1) There is levied a tax on the purchaser for the amount paid or charged for
the following:

. . .

(f) admission to any place of amusement, entertainment, or recreation,
including seats and tables reserved or otherwise, and other similar
accommodations.

Utah Code Ann. @ 59-12-103(1)(f) (1993). In 1994, the Utah Legislature amended
this statute to expressly tax the activities conducted by GPCC.

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[**3]

GPCC later filed another amended sales tax return requesting the refund of $
185,624.79 in sales tax remitted to the Commission on the ticket sales for its
summer activities from May 1992 through June 1994. As it had in its previous
request, GPCC asserted that ticket sales for these activities were not subject
to sales tax under the statute in effect during the relevant period. The
Commission denied this refund request, and GPCC again filed for redetermination.
The two cases were later consolidated, and the Commission held a formal hearing.
In its decision, the Commission held that GPCC lacked standing to request the
sales tax refunds because it was not the taxpayer that had actually paid the
tax. GPCC now seeks judicial review of the Commission's determination that it
was not entitled to a refund.

STANDARD OF REVIEW

The Utah Code guides our standard of review for Commission rulings:

When reviewing formal adjudicative proceedings commenced before the
commission, the Court of Appeals or Supreme Court shall:

(a) grant the commission deference concerning its written findings of fact,
PAGE 3
954 P.2d 873, *874; 1998 Utah App. LEXIS 14, **3;
337 Utah Adv. Rep. 16

applying a substantial evidence standard of review; and

(b) grant the commission no deference [**4] concerning its conclusions of law,
applying a correction of error standard, unless there is an explicit grant of
discretion contained in a statute at issue before the appellate court.

Utah Code Ann. @ 59-1-610(1) (1996); see also South Cent. Tel. Ass'n v. Utah
State Tax Comm'n, 951 P.2d 218, 1997 Utah LEXIS 109, 333 Utah Adv. Rep. 3, 4-5
(Utah 1997).

ANALYSIS

The dispositive issue on appeal is whether the Commission erred in concluding
that GPCC was not entitled to a sales tax refund because it was not the taxpayer
that paid the tax. By statute, refunds are allowed only to the party that
actually paid the tax. See Utah Code Ann. @ 59-12-110(1)(c) (Supp. 1997)
(providing sales tax overpayments "shall be credited or refunded to the
taxpayer"). Thus, if a taxpayer pays any tax or the Commission erroneously
receives any overpayment, the Commission shall (1) credit the amount of tax paid
by the taxpayer against any tax amounts the taxpayer owes, and (2) refund any
balance to the taxpayer. See Utah Code Ann. @ 59-12-110(2)(a). To receive a
refund, the taxpayer must file a claim with the Commission within three years
from the date of the tax overpayment. See Utah Code Ann. @ 59-12-110(2)(b).

GPCC [**5] filed amended tax returns seeking refunds of the sales taxes it
had remitted to the Commission from June 1991 through June 1994. When requesting
these refunds, GPCC claimed that it had erroneously remitted sales tax for
"admissions" on its ticket sales. The Commission denied the refund requests,
holding that GPCC was not the party that had paid the sales tax. On appeal, GPCC
claims it was the taxpayer because it did not print a tax amount on each ticket
and it did not collect sales tax from its patrons, choosing instead to absorb
and pay the sales tax as a cost of doing business. GPCC further maintains that
because it filed the tax returns during the relevant period, it was the taxpayer
and is now entitled to a refund of any overpayments. The evidence before the
Commission, however, does not support GPCC's claim.

First, GPCC's method of calculating the sales and use tax due indicates that
GPCC consistently collected the tax from the consumer [*875] and remitted the
collected tax to the Commission. At all times relevant to this case, GPCC
remitted taxes on its "net sales." GPCC calculated the tax by dividing the
gross ticket sales by 1.075 to reduce the gross sales by the amount of sales
[**6] and resort area tax, 6.25% and 1.00% respectively, resulting in a net
sales figure. GPCC reported the net sales figure to the Commission and remitted
6.25% of the reported net amount as sales tax. This method of calculating the
sales tax suggests that GPCC collected the sales tax from its customers, and
remitted the tax to the Commission. If, indeed, GPCC was the taxpayer and had
absorbed and paid the tax itself, the company would have calculated the sales
tax liability on the gross sales, or the full price the consumer paid for the
ticket. See Utah Code Ann. @ 59-12-103(1) (1993) ("There is levied a tax on the
purchaser for the amount paid or charged . . . .").

Utah law clearly allows a business to "pay or collect and remit the sales and
use taxes imposed by this chapter." Utah Code Ann. @ 59-12-107(1)(a) (1996)
(emphasis added). If the business elects to pay the sales tax rather than remit
PAGE 4
954 P.2d 873, *875; 1998 Utah App. LEXIS 14, **6;
337 Utah Adv. Rep. 16

the sales tax collected from the consumer, it must calculate its sales tax
liability from the full price paid by the consumer. In this case, GPCC reduced
its gross sales by the amount of tax paid by its customers, computed the amount
of tax due from the net sales figure, and sent [**7] that sales tax amount to
the Commission. Although GPCC remitted the collected sales tax to the Commission
by filing the tax return and writing the check, the method GPCC used to
calculate its sales tax liability establishes that it was not the party that
actually paid the sales tax.

The GPCC practice of routinely retaining a 1.5% vendor discount on its sales
tax filings is further evidence that GPCC was not the taxpayer. Utah Code Ann. @
59-12-108(3)(a) (1996), provides for the vendor discount: "a vendor who is
required to remit taxes monthly under this section may retain an amount not to
exceed 1.5% of the total monthly sales tax collected . . . for the cost to it of
collecting and remitting sales and use taxes to the commission on a monthly
basis." The statute is clear: the vendor that collects sales tax may retain 1.5%
of the amount collected when it remits the tax to the Commission. GPCC's
consistent business practice of taking the vendor discount on its sales tax
filings confirms that GPCC collected and remitted the sales tax to the
Commission. The vendor discount would not have been available had GPCC paid the
sales tax because the purpose for the vendor discount is to reimburse [**8]
the vendor for the cost of collecting and remitting the sales tax to the
Commission. See id. GPCC's retention of the vendor discount on its sales tax
filings therefore shows that it did not pay the tax, but chose instead to remit
the sales tax it had collected from its customers.

Finally, GPCC requested and received the investment incentive allowed to ski
resorts under Utah Code Ann. @ 59-12-120 (1996). Under this statute, the
legislature created the Ski Resort Capital Investment Restricted Account. See
Utah Code Ann. @ 59-12-120(5). Ski resorts could request the incentive for
certain equipment and improvements to their facilities. The money available to
a resort was essentially a rebate on the amount of sales tax collected by the
resort from lift ticket sales. Specifically, the statute provides:

The investment incentive paid out of the account shall be allocated among ski
resorts based on the relation between the total sales tax collected from the
sale of ski lift tickets in Utah to the total sales tax collected from the sale
of ski lift tickets in Utah by each ski resort.

Utah Code Ann. @ 59-12-120(2).

GPCC received an investment incentive for $ 263,541. Again, [**9] this
statute plainly states that the incentive was based on the amount of "total
sales tax collected from the sale of ski lift tickets in Utah by each ski
resort." Id. (emphasis added). To qualify for this incentive, GPCC reported to
the Commission that it had collected sales tax from the lift ticket sales.
GPCC's current claim that the consumer did not pay the sales tax when purchasing
the ticket is in direct conflict with GPCC's actions and representations to the
Commission when it requested the investment incentive available to ski resorts.

[*876] Accordingly, GPCC's "'status [under the sales tax statute] is that
of a collector rather than that of a taxpayer.'" B.L. Key, Inc. v. Utah State
Tax Comm'n, 934 P.2d 1164, 1168 n.2 (Utah Ct. App. 1997) (quoting Bird & Jex Co.
v. Anderson Motor Co., 92 Utah 493, 498, 69 P.2d 510, 512-13 (1937)).
PAGE 5
954 P.2d 873, *876; 1998 Utah App. LEXIS 14, **9;
337 Utah Adv. Rep. 16

Consequently, GPCC has no standing to claim a refund of the taxes paid by its
customers. See Jenkins v. Swan, 675 P.2d 1145, 1148 (Utah 1983) ("The
traditional test for standing [is that a] plaintiff must be able to show he has
suffered some distinct and palpable injury which gives him a personal stake in
the outcome of the legal [**10] dispute."); see also United States v.
Richardson, 418 U.S. 166, 172, 94 S. Ct. 2940, 2944, 41 L. Ed. 2d 678 (1974).

CONCLUSION

GPCC's regular and routine business practices do not support its claim that
it was the taxpayer. Because GPCC did not pay the tax, it has no standing to
seek a refund. Therefore, we affirm the Commission's decision.

Russell W. Bench, Judge

I CONCUR:

Norman H. Jackson, Judge

I CONCUR IN THE RESULT:

Pamela T. Greenwood, Judg

 

 

 

   

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