Section 32.375

Title IV EXECUTIVE BRANCH

Chapter 32

Effective - 01 Jul 2002, see footnote   

  32.375.  Dispute over collection or remittance of sales or use tax — abatement allowed, when — administrative review. — 1.  Notwithstanding any provision of law to the contrary, in any dispute regarding the potential liability of a taxpayer for collection and remittance or payment of sales or use tax or related interest, additions to tax or penalties, the director of revenue may, at the request of the taxpayer, consider the reasons for the taxpayer's failure to pay the amounts in dispute.

  2.  The director may abate all or any portion of any amount assessed or decide to not assess any such amount pursuant to this section if the director determines:

  (1)  The taxpayer took reasonable steps to determine whether the amounts were owed;

  (2)  Based on information reasonably available to the taxpayer, the taxpayer reasonably believed that the transactions at issue were not subject to tax and that the amounts in dispute were not owed;

  (3)  At the time of the transactions at issue, the department of revenue had not issued either:

  (a)  A regulation that indicated that the transactions at issue were subject to tax; or

  (b)  Any other written or oral communication that the taxpayer knew of or should have known of stating that the transactions at issue were subject to tax; and

  (4)  In the discretion of the director, such abatement is in the best interest of the state and will not undermine compliance by taxpayers with the tax laws of this state.

  3.  If the director determines that any amounts may be abated pursuant to this section, as consideration for the abatement, the taxpayer shall agree that:

  (1)  The taxpayer shall bear his or her own costs, including any attorney fees;

  (2)  During the three-year period beginning with the date of the agreement, the taxpayer shall comply with all sales and use tax obligations arising from the type of transactions that were the basis of the amounts that are the subject of the agreement and the taxpayer shall not challenge or protest any such sales or use tax obligations arising during the three-year period; except that any final decision of a court of competent jurisdiction finding such transactions to be nontaxable and any statutory changes that become effective during the three-year period shall apply to the taxpayer notwithstanding any provision of the agreement; and

  (3)  The taxpayer shall not contest in court or otherwise any amount of the liability sought to be abated.

  4.  If due to a disagreement concerning the amount to be abated the taxpayer does not agree to the terms provided by subsection 3 of this section or if the director determines the amounts in dispute should not be abated, the director shall issue a final decision setting forth the director's determination.  Within sixty days after the date on which the director's decision is delivered in person or is mailed to the taxpayer, whichever is earlier, the taxpayer may file a petition for review of the final decision with the administrative hearing commission.

  5.  On petition for review before the administrative hearing commission, the commission shall consider whether the director's determination was reasonable based on the factors set forth in subsection 2 of this section.  The commission may:

  (1)  Issue an order to the director stating an amount to be abated by the director, if the commission finds the director's decision unreasonable; or

  (2)  Issue an order denying the relief sought by the taxpayer, if the commission finds the director's determination reasonable.

  6.  The provisions of subsection 3 of this section shall apply to any abatement ordered by the commission.

  7.  A decision of the administrative hearing commission pursuant to this section shall not be subject to appeal or petition for review by the taxpayer or the director.

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(L. 2002 H.B. 1150, et al.)

Effective 7-01-02