Form St 07-25 - Sales Tax - 2007 Page 3
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115. Taxpayer was the owner, manager and salesman for the Corporation. Tr. p. 13.
6. The Corporation’s operations consisted of both the sale and lease of automobiles. Tr.
p. 13.
7. The Corporation ceased operations in December 2004. Tr. p. 22.
8. On May 25, 2005, the Department issued NPL number 0000-000-00-0 to Taxpayer.
The NPL proposed a total penalty liability of $454,480.85, including tax, interest and
penalty for failure to pay ROT/UT for the months of November 2000, June 2003, August
2004, October 2004, November 2004, and January 2005, as well as, penalties for checks
that were not honored by the bank for June 2003 and December 2004. The NPL was
admitted into evidence under the certificate of the Director of the Department. Dept. Gr.
Ex. No. 1.
9. The basis for the assessed amounts in the NPL is disallowed trade-ins deductions and
clerical errors. Tr. p. 17; Taxpayer Ex. Nos. 1 (Department’s “Letter of Comments”); 2
(Department’s “Summary Analysis” on trade-ins); 3 (Department’s “Comparison of Sales
to 556 Reports”); 6 (Corporation’s “Final Assessment for Sales and Use Tax”); 7-18
(Corporation’s ST-556 returns for transactions in which trade-ins were allowed and
disallowed).
10. The Department’s Form ST-556 (“556”) was utilized to report tax due and was
usually prepared by the Corporation’s secretary or receptionist but these forms were also
prepared by salesmen which included Taxpayer. Moreover, some of the 556’s were
reviewed by Taxpayer. Tr. pp. 14, 28.
11. Taxpayer learned how to account for trade-ins on 556’s by asking title clerks from
other dealerships. He asked such title clerks for direction and advice on the type of
information to be placed on the 556 regarding leased trade-ins but never inquired as to
the propriety of when leased trade-ins were or were not to be taken as a deduction on the
556’s. While Taxpayer had three salesmen who had experience with the 556, he also did
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