Utah Business Law Update: January 2016

January 2016 was a lean month for Utah Supreme Court or Appellate Court cases that affect Utah business and real estate. While the offering is meager this month, there’s some good sales-and-use tax and water law tidbits in here. Thrilling, I know, but hopefully useful.

RENT-A-CENTER WEST v. UTAH TAX COMMISSION, 2016 UT 1. In the Rent-A-Center case, the Utah Supreme Court held that the liability-waiver fee charged by Rent-A-Center was not subject to sales and use tax because it was an optional fee and not required for the ownership and use of the leased personal property. Rent-A-Center leased personal property to consumers like TVs, couches, and other appliances. If a consumer wanted to avoid paying for the fair market value of the leased personal property in the event it were lost in a flood, fire, or stolen, the consumer could pay a liability waiver fee in the amount of 7.5% of the leased property payment amount. The tax commission audited Rent-A-Center and assessed them sales and use tax on the liability-waiver fee. The Utah Supreme Court found the sales and use tax regulations allowing the charging of the sales and use tax on the liability-waiver fee exceeded the scope authorized to the Utah Tax Commission by the Utah Legislature and vacated the award of the taxes to the Utah Tax Commission.

Utah Alunite Corporation v. Jones, 2016 UT App 11. Utah Alunite Corporation (UAC) and Utah School and Institutional Trust Lands Administration (SITLA) appealled the dismissal of a petition seeking judicial review of the decision of Kent L. Jones, Utah’s State Engineer, approving the application of Central Iron County Water Conservancy District (the Water District) to appropriate water in the remote Wah Wah Valley in west-central Utah. Because SITLA and UAC, although aggrieved persons, did not become aggrieved parties under Utah’s Administrative Procedure Act (UAPA) in this proceeding, they lacked standing, and the appeal was dismissed. The moral of the story is if there is an application to appropriate water and you want the ability to appeal you need to protest the application and be a party to the application process before the file ruling of the Utah State Water Engineer.

Thanks for checking this out. If you have any questions on these cases and on how these decisions may affect you or your business, please don’t hesitate to contact me.

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