Opinion ID: 2631829
Heading Depth: 2
Heading Rank: 1

Heading: initial tax commission proceeding

Text: ¶ 3 Nebeker is an intrastate carrier of water and other fluids used as oilfield commodities. The Tax Commission conducted an audit of Nebeker's Special Fuel accounts to determine the amount of diesel fuel Nebeker consumed. In November 1995, following this audit, the Tax Commission served a Statutory Notice and Tax Assessment on Nebeker stemming from unpaid taxes under the Motor and Special Fuel Tax Act, Title 59, Chapter 13 of the Utah Code. ¶ 4 The assessment specified the amount of diesel fuel Nebeker consumed and taxed it accordingly. However, section 59-13-301(2)(b) provides, No special fuel tax is imposed on undyed diesel fuel which ... is used in a vehicle off-highway [or] is used to operate a power take-off unit of a vehicle. Utah Code Ann. § 59-13-301(2)(b)(iii), (iv) (2000). Accordingly, the assessment exempted from taxation diesel fuel used to drive vacuum motors on Nebeker's water trucks and fuel used by Nebeker to operate vehicles off-highway, i.e., off of public highways. ¶ 5 Nebeker disagreed with the Tax Commission's assessment of the tax and filed a petition for redetermination. In this petition, Nebeker claimed additional exemptions for fuel used to operate vehicles off public highways. On May 12, 1998, the Tax Commission issued an order defining public highways as that term applied to the imposition of the special fuel tax. The Tax Commission then asked Nebeker to submit revised estimates of the diesel fuel that was exempted from taxation due to use off public highways. On September 30, 1998, the Tax Commission issued an amended audit and tax assessment. ¶ 6 Nebeker objected to this second audit and assessment, as well, claiming it contained mathematical errors. On March 30, 1999, the Tax Commission issued another amended audit and tax assessment. In this third audit and assessment, the Tax Commission imposed a twelve percent interest rate on Nebeker's deficiencies pursuant to the International Fuel Tax Agreement (IFTA), an agreement into which the Tax Commission entered under section 59-13-501 of the Utah Code. While Nebeker inquired into the Tax Commission's calculation of the interest rate, no petition for redetermination was made, and the Tax Commission's ruling became final. Nebeker paid the amount owed under protest.