Texas Comptroller of Public Accounts STAR System
SOAH DOCKET NO. 304-09-6032.26
CPA HEARING NO. 101,806
TAXPAYER NO: *************
AUDIT OFFICE: *************
AUDIT PERIOD: May 1, 2003 THROUGH July 31, 2005
Limited Sales, Excise, And Use Tax/RDT
BEFORE THE COMPTROLLER
OF PUBLIC ACCOUNTS
OF THE STATE OF TEXAS
Texas Comptroller of Public Accounts
Representing Tax Division
The Texas Comptroller of Public Accounts (Comptroller) assessed use tax on the
estimated retail value of aircraft *************(Petitioner) purchased for use
in Texas. Petitioner asked for redetermination, whereupon Comptroller Staff
agreed to amend and reduce the assessment. Petitioner contends no tax is due
because the aircraft were used exclusively to provide flight instruction. In
the alternative, Petitioner contends he is entitled to relief under the
Comptrollerís detrimental reliance policies. In his Proposal for Decision, the
Administrative Law Judge (ALJ) recommends that the assessment be adjusted as
recommended by Staff, but that each of Petitionerís contentions should be
I. PROCEDURAL HISTORY, NOTICE & JURISDICTION
On August 18, 2009, the above-referenced matter was referred to the State
Office of Administrative Hearings (SOAH). Subsequently, each party filed a
Motion for Summary Disposition. ALJ Victor John Simonds reviewed the pleadings
and evidence, and denied each motion after finding there were material facts
still in dispute.
A hearing on the merits convened on November 16, 2009, before the ALJ at the
William P. Clements Building, 300 West 15th Street, Austin, Texas. Petitioner
was represented by ************* of COMPANY A. Staff was represented by
Assistant General Counsel Tucker Furlow. Each party filed written closing
briefs, and the ALJ closed the record on January 22, 2010.
There are no contested issues related to notice or jurisdiction in this
proceeding. Therefore, those matters are set out in the Findings of Fact and
Conclusions of Law without further discussion here.
II. REASONS FOR DECISION
A. Evidence Submitted
At the hearing on the merits Petitioner testified on his own behalf, and also
presented the testimony of INDIVIDUAL A, a former Comptroller employee.
Petitioner presented the following documents:
1. Bill of Sale, Tail No. *************, Serial No. *************.
2. Bill of Sale, Tail No. *************, Serial No. *************
3. Statement of Occasional Sale, Tail No. *************, Serial No.
3. Flight Logs, Tail No. *************, Serial No. *************.
4. Flight Logs, Tail No. *************, Serial No.*************.
5. Federal Aviation Administration (FAA) Certification.
6. FAA Form Ė Request for Copies of Airman File to be Released to a Third
7. Comptroller Sales & Use Tax Bulletin 94-168 (03/02).
8. Comptroller Tax Policy News, January 1998.
9. Comptroller Tax Publication (03/06).
10. Public Information Request filed with Comptrollerís office requesting
certain phone bank records for May 2003.
11. Comptroller records provided in response to Public Information Request.
14. Petitionerís Statement of Grounds. [ENDNOTE: (1)]
15. Staffís Position Letter.
16. Staffís Response to Petitionerís Reply.
17. Correspondence from INDIVIDUAL B, COMPANY B, December 10, 2001.
18. Correspondence from INDIVIDUAL C, COMPANY C, December 6, 2001.
19. Correspondence from INDIVIDUAL D, COMPANY D, April 19, 2004.
20. FAA Registry, INDIVIDUAL E.
21. FAA Designee Location re: Petitioner and INDIVIDUAL F.
22. Correspondence from INDIVIDUAL G, March 22, 2004.
23. Petitionerís Summary of Evidence.
24. Audio of Senate Finance Committee hearing related to S.B. 833 (1995).
25. Affidavit of Petitioner, January 4, 2010.
Comptroller Staff presented the testimony of Javier Lopez, an examiner in the
Comptrollerís Business Activity Research Team (BART) division; and Ken Koch,
a tax policy specialist in the Comptrollerís Tax Policy Division. Staff
submitted the following documents:
1. Comptrollerís BART documents.
a. Exam at issue (CPA 1 - 8).
b. Correspondence from Petitioner, April 22, 2008 (CPA 9).
c. Correspondence from BART, April 2, 2008 (CPA 10 - 11).
d. Comptroller Tax Publication, 03/06 (CPA 12 Ė 15).
e. Petitionerís insurance documentation (CPA 16 Ė 18).
f. Correspondence between the parties, October 15, 2007 (CPA 19).
g. Correspondence from Petitioner, undated (CPA 20).
h. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 21).
i. FAA Assignment of Special Registration (CPA 22).
j. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 23).
k. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 24).
l. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 23).
m. Correspondence between parties, November 26, 2007 (CPA 25).
n. Correspondence from Petitioner, December 3, 2007 (CPA 26).
o. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 27).
p. FAA Registration, Tail No. *************, Serial No. *************, (CPA
q. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 29).
r. Aircraft Security Agreement, Tail No. *************, Serial No.
************* (CPA 30).
s. FAA Registration, Tail No. *************, Serial No. ************* (CPA 31).
t. Correspondence between parties, February 11, 2008 (CPA 32).
u. Bill of Sale, Tail No. *************, Serial No. ************* (CPA 33).
v. FAA Registration, Tail No. *************, Serial No. ************* (CPA 34).
w. FAA Registration, Tail No. *************, Serial No. ************* (CPA
2. The Texas Notification of Exam Results.
3. BART work comments log.
4. Sales & Use Tax Bulletin 94-168 (02/08). [ENDNOTE: (2)]
Each of the above-referenced documents was admitted as evidence.
B. Agreed Adjustments
Staff agreed to delete assessments against the aircraft identified as Tail No.
*************, Serial No. *************. Staff also agreed that the tax
assessment on Tail No. N4019G, Serial No. 1440 should be based on its
$************* purchase price; and that the tax assessment on Tail No. N223MC,
Serial No. 1561 should be based on its $************* purchase price. Lastly,
Staff agreed to waive all penalty assessments.
C. Facts Established by the Evidence
In 2007, the Comptrollerís BART received information from the FAA showing that,
in 2003, Petitioner purchased a helicopter (Tail No. *************, Serial No.
*************) from a company located in CITY A, Washington. Petitioner
registered the aircraft with a Texas address. The FAA documentation showed
that Petitioner also purchased a helicopter (Tail No. ***********, Serial No.
*************) in 2004. It was registered with a Texas address as well.
Petitioner provided BART a copy of his insurance policies, flight logs
detailing flights back to 2003, a copy of his flight instructor certification,
and a copy of a March 2006 tax publication that included guidance related to
the flight instruction exemption. Petitioner wrote to the BART examiner and
explained that he had ďtalked with someone before about sales tax and training
is not taxable.Ē Petitioner noted that the Comptrollerís publication did not
state that a sales and use tax permit was required to qualify for the
The BART examiner reviewed Petitionerís documentation, and confirmed that
Petitioner was using the aircraft in Texas. He noted that some of the flight
log entries seemed to indicate the helicopters were not being used exclusively
for flight instruction. For example, one flight log entry stated: ďcattle
round-up,Ē and another stated ďhot dog run.Ē The examiner also noted that some
of the entries appeared to have been entered by someone other than Petitioner;
still others were not initialed at all. Ultimately, the exemption claim was
denied because Petitioner confirmed that he did not have a sales tax permit.
On June 5, 2008, BART issued a Texas Notice of Exam Results assessing a
deficiency for the period from May 1, 2003 through July 31, 2005.
Petitioner timely asked for redetermination contending that Texas law exempted
flight instruction. Approximately one month later Petitioner contacted BART by
phone, and requested written confirmation regarding his eligibility for the
flight instruction exemption. Petitioner told the Comptroller employee that
when he set up his business he was told he would not need a permit because his
flight instruction services were not taxable. The BART employee stated that
the two helicopter purchases were not eligible for the flight instruction
exemption because Petitioner did not have a sales and use tax permit when he
made the purchases.
When Petitioner filed a response to Staffís Position Letter he submitted a copy
of a 1998 Tax Policy News publication, and pointed out that it did not limit
the flight instruction exemption to those holding a sales and use tax permit.
Ms. Christian, who wrote the 1998 publication, testified that when the
Legislature added the sales and use tax permit requirement to the flight
instruction exemption in 1995 the Comptroller made the decision not to enforce
the requirement. Ms. Christian stated that the agency purposefully omitted the
requirement from Tax Policy guidance documents, because flight instructors did
not sell a taxable service and would report no taxable sales on their returns.
However, Mr. Lopez and Mr. Koch both testified that in all the years they have
worked on aircraft assessments they have never seen or been told of such a
policy, and neither one was aware of any instance in which a taxpayer was
allowed the exemption despite not having a permit.
In his hearing testimony, Petitioner stated that prior to purchasing the first
helicopter he went to a ************* County government office to register his
business name. According to Petitioner, the ************* County clerk gave
him a packet of information that included a sales and use tax permit
application, and a 2002 Comptroller tax publication related to the flight
instruction exemption. Although he did not retain the documents, Petitioner
testified that he found a copy of the 2002 publication he received from the
************* County clerk by contacting the ďstate archives.Ē He stated that
he recognized it as the publication he received in 2003, because of its
distinctive ďTax BulletinĒ heading. [ENDNOTE: (3)]
Petitioner testified that he called the Comptrollerís tax assistance line while
leaving the Harris County office, and specifically asked if he needed a permit.
He stated that he could not remember the Comptroller employeeís name. He did
recall that he was told his flight instruction service was not taxable so he
did not need a sales tax permit, but that he should keep records for four
years. Petitioner could not remember if he wrote down notes related to the
conversation, but if he did they were not available as evidence.
Lastly, Petitioner testified that each helicopter at issue was used exclusively
for flight training. For example, he stated the cattle round-up flight was
done to train that student in how to use a helicopter for cattle work.
According to Petitioner, students purchased blocks of time necessary to obtain
an FAA license, and he set his prices based on market conditions. He stated
that his reliance on the Comptrollerís help-line employee and Tax Bulletin has
harmed him in that he has had to spend a great deal of time and money trying to
establish his entitlement to the exemption.
D. Issues Presented, Analysis & Recommendation
Flight Instruction Exemption
When a person purchases tangible personal property outside the state and brings
the property to Texas, the purchaser is presumed to have purchased the item for
storage, use, or consumption in this state and is liable for use tax. TEX. TAX
CODE Section 151.009, 151.101, 151.102, and 151.105. Petitionerís storage and
use of the two aircraft at issue is subject to use tax, unless an exemption
It is Petitionerís burden to show its entitlement to an exemption by clear and
convincing evidence. Statutory exemptions are strictly construed because they
compromise the goal of an equal and uniform taxing scheme. Therefore, all
doubts concerning exemption claims are resolved in favor of the taxing
authority. See North Alamo Water Supply Corp. v. Willacy County Appraisal
Dist., 804 S.W.2d 894, 899 (Tex. 1991); Sharp v. Tyler Pipe Indus., Inc., 919
S.W.2d 157, 161 (Tex. App.--Austin 1996, writ denied) (statutes exempting
property from taxation should be strictly construed in favor of taxation, but
should not be interpreted unreasonably); Sharp v. Chevron Chem. Co., 924 S.W.2d
429, 432 (Tex. App.--Austin 1996, writ denied). See also 34 TEX. ADMIN. CODE
Petitioner contends the helicopters it purchased in 2003 and 2004 are exempt
from sales and use tax because they were used exclusively for flight
instruction. An aircraft that is purchased by an FAA certified flight school
or instructor that uses the craft exclusively for FAA approved flight
instruction designed to lead to an FAA pilot certificate or rating is exempted
from sales and use tax if the purchaser has a sales and use tax permit. TEX.
TAX CODE Section†151.328(a)(2). Petitioner did not have a sales tax permit
when he purchased the two helicopters at issue, therefore, he is not eligible
for the flight instruction exemption.
Petitioner acknowledges that he does not meet the statutory requirements for
the exemption, but contends the exemption applies nonetheless because when he
purchased the aircraft at issue the Comptroller was not enforcing the
requirement. Petitioner cited numerous policy statements and letters that were
published by the Comptroller after the Legislature added the sales tax permit
requirement, and noted that none of them make any mention of the fact that a
taxpayer must have a sales and use tax permit to qualify for the exemption.
See, e.g., Tax Policy News, January 1998; and Comptroller Publication 94-168,
March 2002 and March 2006. Petitioner also pointed out that the Comptrollerís
administrative rule describing the exemption does not make any mention of the
requirement either. See 34 TEX. ADMIN. CODE Section†3.297(c)(7). It states:
ďSales or use tax is not due on aircraft purchased by a person who uses the
aircraft to provide flight instruction that is recognized by the Federal
Aviation Administration (FAA), under the direct or general supervision of an
FAA certified flight instructor, and designed to lead to a pilot certificate or
rating issued by a rule or regulation of the FAA.Ē Petitioner contends the
Comptroller intentionally omitted the statutory requirement.
However, in testifying for Staff, Mr. Lopez and Mr. Koch stated that they had
significant experience reviewing flight instruction exemption claims, yet
neither had any knowledge of a Comptroller policy of allowing non-permitted
taxpayers to claim the flight instruction exemption. Moreover, there is
evidence to show the Comptroller has denied the flight instruction exemption
when the claimant did not have a sales tax permit. See, e.g., SOAH DOCKET NO.
304-09-3328.26; COMPTROLLERíS DECISION NO. 101,712 (2009). See also
COMPTROLLERíS DECISION NO. 43,207 (2004). Petitioner did not provide any
evidence to show the Comptroller has allowed a non-permitted taxpayer to claim
the exemption. Therefore, there is insufficient evidence to establish that the
Comptroller has (or had) a policy of allowing non-permitted taxpayers to claim
the flight instruction exemption.
Even if Petitioner did establish that the Comptroller had an erroneous policy,
that would not mean that he was entitled to the exemption. Staffís position in
the instant matter makes it clear that the Comptroller is enforcing the
statutory requirement now. Texas courts have determined that a rule can be
changed on a retroactive basis even when the rule is long-standing, and even
when the effect is to the detriment of a taxpayer, when the rule is in conflict
with the clear language of a statute. See, Bullock v. Enserch Exploration,
Inc., 614 S.W.2d 215 (Tex. Civ. App. Ė Waco 1979, writ ref n.r.e.). The
Comptrollerís office is part of the executive branch of government and is not
authorized or empowered to overturn or disregard legislative enactments by
declaring them void or unenforceable; that is a province reserved for the
judiciary. COMPTROLLERíS DECISION NO. 12,307 (1982). See also, Bullock v.
Enserch Exploration, Inc. supra. The statute is unambiguous, and requires that
a taxpayer have a permit. Petitioner did not. Therefore, Petitionerís
exemption claim must be denied.
The Comptroller adopted a detrimental reliance policy to promote fairness. It
represents the equivalent of the doctrine of equitable estoppel, and provides
relief to a taxpayer who has been assessed because it relied on erroneous
advice given by a comptroller employee. COMPTROLLERíS DECISION NO. 39,589
(2001). Though purchasers are eligible for relief under the Comptrollerís
policy, detrimental reliance relief rarely results in waiving tax. Typically,
the purchaser receiving erroneous tax advice would have bought the item and
paid the tax due irrespective of the erroneous advice. See COMPTROLLERíS
DECISION NOS. 26,320 and 26,434 (1990). Therefore, the erroneous advice does
not generally cause harm beyond the fact that penalty and interest are added
when an assessment is done. The Comptroller recently stated that tax will be
waived on materials utilized and consumed in performance of a service or sale
of a product for an unrelated third party. See State Tax Automated Research
Accession No. 200712099L, December 13, 2007. The Comptroller also provided
that tax can only be waived for indirect materials or services when the
taxpayer can prove that these items were used in computing prices or bids, and
tax on assets or tools directly used in the performance of services or sales
may be partially exempted based upon their purchase dates and remaining life of
the assets (based on the presumption that prices can be increased on future
In limited instances, the Comptroller grants relief if a taxpayer can establish
the following four elements: (1) proof of the advice (both as to the substance
thereof and its direct communication to the taxpayer), meaning that it usually
must be in writing; (2) that advice was followed; (3) the taxpayer gave
sufficient information to have resulted in correct advice and did not
misrepresent information or deliberately withhold or conceal relevant
information and (4) harm would result unless the Comptroller adheres to the
advice. COMPTROLLERíS DECISION NO.†21,014 (1988).
To establish the first element a taxpayer must show that a Comptroller employee
gave erroneous advice directly to the taxpayer, and the taxpayer must establish
the substance of the exchange. COMPTROLLERíS DECISION NO. 26,904 (1991).
Usually taxpayers establish these elements by showing a written communication.
The Comptroller has recognized that a detrimental reliance claim based on oral
advice is susceptible to abuse, and consequently has adopted a very strict
policy such that a claim based on oral advice must include corroboration that
erroneous advice was given and that the Comptroller employee had complete
knowledge of the facts necessary to have provided correct advice. SOAH DOCKET
NO. 304-09-3328.26; COMPTROLLERíS DECISION NO. 101,712 (1982). See also,
COMPTROLLERíS DECISION NO. 24,559 (1989).
In the instant case, Petitioner testified that he called the Comptrollerís help
line, and specifically asked the employee if he needed to get a sales tax
permit. Petitioner did not remember the employeeís name, and did not provide
any written notes that would corroborate his testimony regarding the question
he asked. Nor is there anything other than Petitionerís testimony to
demonstrate that he gave the employee sufficient information to provide a
correct response. For example, Petitioner stated he was advised that he did
not need a permit, because flight training was not a taxable service. That, in
and of itself, is not erroneous advice. Flight training is not a taxable
service, and a flight trainer need not get a sales tax permit, but should keep
records for four years to support the exemption claim. If Petitioner did not
specifically state that he intended to claim the flight instruction exemption,
the employee would not have had a reason to advise Petitioner to obtain a sales
tax permit. In sum, Petitionerís evidence is insufficient to establish: (1)
that he did in fact call the Comptrollerís help line, (2) that he gave
sufficient information to have resulted in correct advice and did not
misrepresent information or deliberately withhold or conceal relevant
information, and (3) that the employee gave him erroneous advice prior to his
purchasing the aircraft at issue. Therefore, the telephone conversation he
contends he had cannot form the basis for relief based on detrimental reliance.
Petitioner also testified that he relied on Comptroller publications, and
argues they support his detrimental reliance contention. When Petitioner was
corresponding with the BART examiner he provided a copy of Comptrollerís
Publication No. 94-168, MARCH 2006, and pointed out that the publication did
not include any statement related to the fact that a taxpayer had to have a
sales tax permit to qualify for the flight instruction exemption. But
Petitioner did not rely on that publication prior to making the purchases at
issue. The aircraft purchases preceded the documentís publication by over two
Then Petitioner provided Staff with a copy of a Tax Policy News publication,
and argued that it did not inform taxpayers that flight instructors had to have
a sales tax permit to be eligible for the exemption. See Tax Policy News,
January 1998. However, the publication specifically directed that taxpayers
review the Tax Codeís exemption requirements. Therefore, the 1998 publication
does not constitute erroneous advice that would support Petitionerís
After Staff pointed out that the 1998 publication directed taxpayers to the Tax
Code, Petitioner located a 2002 tax bulletin that does not refer taxpayers to
the Tax Code or specifically reference the sales tax permit requirement. At
the hearing Petitioner testified that he received the 2002 Comptroller
publication when he visited the ************* County government office.
Petitionerís testimony is not corroborated, and his credibility on the point
is weakened by the fact that he previously suggested he had detrimentally relied
on other publications. The net result is that Petitionerís uncorroborated
testimony on the point is unpersuasive. And even if that were not the case,
the ALJís recommendation on this contention would be the same.
Though the 2002 Tax Bulletin fails to state that a flight instructor must have
a sales tax permit to qualify for the exemption, it does not provide that a
taxpayer will qualify without one. Stated differently, the publication does
not, in and of itself, constitute erroneous advice that would warrant
additional relief in this matter. The Comptroller publishes tax information
and guidance, but ďthe law recognizes that there is no duty to inform others of
the law because all persons are presumed to know the law.Ē Greater Houston
Transportation v. Phillips, 801 S.W.2d 523, at 525 (Tex. 1990).
Therefore, Petitionerís contention should be denied.
Interest is automatically imposed on delinquent tax. TEX. TAX CODE Section
111.060. However, the Comptroller has discretionary authority to waive
interest assessments. TEX. TAX CODE Section 111.103. The Comptroller will
waive interest assessments in three situations: there was undue delay caused
by Comptroller personnel, there was reliance on advice provided by the
Comptrollerís office, or there was a natural disaster. 34 TEX. ADMIN. CODE
Section 3.5(d). There is no evidence that undue delay or natural disaster
related to interest waiver are present in this matter, and Petitioner failed to
establish that it detrimentally relied on erroneous Comptroller advice.
Therefore, Petitionerís contention should be denied.
Petitioner is not entitled to the flight instruction exemption, and he failed
to establish that he detrimentally relied on erroneous advice from a
Comptroller employee or publication. Petitioner presented no other evidence or
argument that would show error in the Comptrollerís assessment. Therefore,
except for Staff agreed adjustments, the assessment should be upheld. See 34
TEX. ADMIN. CODE Section†1.40(2)(B).
III. FINDINGS OF FACT
1. On June 5, 2008, the Texas†Comptroller of Public Accounts (Comptroller)
assessed use taxes on ************* (Petitioner) purchase of three aircraft
identified as Tail No. *************, Serial No. *************; Tail No.
*************, Serial No. *************; and Tail No. *************, Serial No.
************* (the aircraft). The assessment was based on the estimated value
of the aircraft, and included penalty, and interest accrued as of the date of
2. Petitioner timely requested redetermination.
3. On August 18, 2009, Comptroller Staff referred the case to the State Office
of Administrative Hearings and issued a Notice of Hearing to Petitioner.
4. The Notice of Hearing contained the date and time for the hearing, and a
statement of the nature of the hearing; a statement of the legal authority and
jurisdiction under which the hearing was to be held; a reference to the
particular sections of the statutes and rules involved; and a short, plain
statement of the matters asserted.
5. The record closed on January 22, 2010.
6. Petitioner purchased the aircraft at issue in 2003 and 2004 from
7. Petitioner used the aircraft at issue in Texas, but did not remit use tax to
8. When Petitioner purchased the aircraft at issue he did not have a sales and
use tax permit.
9. Staff agreed to delete assessments against the aircraft identified as Tail
No. *************, Serial No. *************. Staff also agreed the tax
assessment on Tail No. *************, Serial No. ************* should be based
on its $************* purchase price; and that the tax assessment on Tail No.
*************, Serial No. ************* be based on its $************* purchase
price. Lastly, Staff agreed to waive all penalty assessments.
10. Petitionerís flight logs showed a flight for a cattle round-up, and for a
hot dog run.
11. Petitionerís flight logs included entries that were initialed by a pilot
other than Petitioner, and several entries were not initialed at all.
12. With respect to the purchases at issue, the preponderate evidence does not
establish that a Comptroller employee gave erroneous advice directly to
13. With respect to the purchases at issue, the preponderate evidence does not
establish that Petitioner detrimentally relied on an erroneous Comptroller rule
IV. CONCLUSIONS OF LAW
1. The Comptroller has jurisdiction over this matter pursuant to TEX. TAX CODE
2. The State Office of Administrative Hearings has jurisdiction over matters
related to the hearing in this matter, including the authority to issue a
proposal for decision with findings of fact and conclusions of law pursuant to
TEX. GOVíT CODE ch. 2003.
3. The Comptroller provided proper and timely notice of the hearing pursuant to
TEX. GOVíT CODE ch. 2001.
4. The aircraft Petitioner purchased are tangible personal property that is
presumed subject to use tax. TEX. TAX CODE Section†151.101; 151.102; and
5. Aircraft purchased to provide flight instruction is not exempt under TEX.
TAX CODE Section†151.328(a)(2)(A) unless the purchaser holds a valid sales tax
6. Petitionerís aircraft purchases were not exempt.
7. The Comptroller has no legal duty to inform others of the law because all
persons are presumed to know the law. Greater Houston Transportation v.
Phillips, 801 S.W.2d 523 (Tex. 1990).
8. The necessary elements of a valid detrimental reliance claim are: (1) a
taxpayer was given incorrect advice by a Comptroller employee, when the
taxpayer provided sufficient information to have led the employee to give
correct advice; (2) the substance of the advice is satisfactorily established;
(3) the taxpayer followed the advice; and (4) the taxpayer will suffer harm
unless the Comptroller adheres to the advice. See, e.g., COMPTROLLERíS
DECISION NO. 44,450 (2004).
9. Petitioner failed to prove that he is entitled to relief based on
10. Petitioner failed to meet its burden to show, by a preponderance of
evidence, that the adjusted assessment is erroneous. 34 TEX. ADMIN. CODE
11. Interest is automatically imposed on delinquent tax. TEX. TAX CODE Section
12. The Comptroller has discretionary authority to waive interest assessments,
and will do so in three situations: there was undue delay caused by Comptroller
personnel, there was reliance on advice provided by the Comptrollerís office,
or there was a natural disaster. TEX. TAX CODE Section 111.103. See also 34
TEX. ADMIN. CODE Section 3.5(d).
13. Petitioner failed to establish it is entitled to interest waiver.
14. Based on the foregoing Findings of Fact and Conclusions of Law, except as
agreed by Staff, the assessment should be upheld.
Hearing No. 101,806
ORDER OF THE COMPTROLLER
On January 28, 2010, the State Office of Administrative Hearingsí (SOAH)
Administrative Law Judge, Victor John Simonds, issued a Proposal for Decision
in the above referenced matter. The parties were given fifteen days from the
date of the Decision to file exceptions with SOAH. No exceptions were filed,
and the Comptroller has determined that the Administrative Law Judgeís Proposal
for Decision, except for minor changes to correct typographical or clerical
errors, should be adopted as written.
The above decision resulting in Taxpayerís liability as set out in ďAttachment
A,Ē which is incorporated by reference, is approved and adopted in all
respects. The decision becomes final twenty days after the date Petitioner
receives notice of this decision, and the total sum of the tax, penalty, and
interest amounts is due and payable within twenty days thereafter. If such sum
is not paid within such time, an additional penalty of ten percent of the taxes
due will accrue, and interest will continue to accrue. If either party desires
a rehearing, that party must file a Motion for Rehearing, which must state the
grounds for rehearing, no later than twenty days after the date Petitioner
receives notice of this decision. Notice of this decision is presumed to occur
on the third day after the date of this decision.
Signed on this 9th day of March 2010.
Texas Comptroller of Public Accounts
by: Martin A. Hubert
(1) Exhibit No. 13 is skipped intentionally. Petitioner pre-marked his
exhibits for identification purposes. Petitionerís Exhibit No. 13 was the
Notification of Exam Results, which was submitted as part of Staffís direct
(2) Staff also presented copies of certain documents Petitioner submitted to
the Comptroller prior to the time the matter was referred to SOAH. Those
exhibits are not specifically identified as evidence because they duplicate
exhibits that were initially offered by Petitioner.
(3) Counsel for Petitioner also submitted several taxability letters that are
part of the record, and cited 34 TEX. ADMIN. CODE Section3.297(c)(7) as
evidence of the Comptrollerís policy on the flight training exemption.
However, Petitioner did not contend he relied on the rule and taxability
letters prior to making his aircraft purchases.
ACCESSION NUMBER: 201003842H
DOCUMENT TYPE: H
TAX TYPE: SALES