PETITION FOR REVIEW BOARD OF FINANCE & REVENUE
Simon Noel, Pittsburgh, for petitioners.
Matthew W. Tomalis, Deputy Atty. Gen., with him, Ernest D. Preate, Jr., Atty. Gen., for respondent.
Barry and McGinley, JJ., and Narick, Senior Judge.
[ 130 Pa. Commw. Page 488]
Ronald and Carol Yurick (Yuricks) have petitioned for our review of three orders of the Board of Finance and Revenue (Board) which upheld the sales tax assessments made by the Department of Revenue against the Yuricks both jointly and individually.
An appeal from a determination of the Board is de novo in this Court. See Pa.R.A.P. 1571(f). In this case, the Yuricks and the Commonwealth have filed a partial stipulation of facts. In addition, an evidentiary hearing was held, pursuant to Pa.R.A.P. 1542(b), on June 20, 1989. From the
[ 130 Pa. Commw. Page 489]
parties' stipulation and from the evidence adduced at the hearing, we make the following findings of fact:
1. Ronald M. and Carol D. Yurick owned and operated a business known as The Tubbery, Inc. in Monroeville, Pennsylvania, with said business being engaged primarily in the business of selling hot tubs, spas, exercise equipment, and related items and services.
2. At all times during the period from July 1, 1983 to April 2, 1985, all of the stock of The Tubbery, Inc. was titled to the Yuricks, either individually or as husband and wife.
3. In the normal course of the corporate business, the Yuricks sold items for which sales tax was legally required to be collected by them.
4. It was the regular practice of the Yuricks to collect sales tax on all sales they made, except for those sales for which the purchaser presented a valid exemption certificate.
5. During the period from July 1, 1983 to April 2, 1985, the Yuricks collected sales tax on sales at retail of their merchandise, but failed to remit to the Commonwealth more than $10,000 of the tax collected.
6. The Yuricks are unable to account for the monies collected as sales tax but not remitted to the Commonwealth, although they admitted that the funds were applied to expenses of the business in lieu of their having to use their personal funds to satisfy their obligations.
7. In late 1984, the Yuricks were contacted by Richard Varlotto, an investigator with the Department of Revenue, in an effort to collect the sales tax owed by them due to their failure to remit the tax they had collected.
8. Between late 1984 and March 7, 1985, the Yuricks and Mr. Varlotto held several discussions toward arranging for them to satisfy their outstanding sales tax liability by way
[ 130 Pa. Commw. Page 490]
of a deferred payment plan, although the Yuricks never executed such an agreement.
9. The Yuricks decided to sell their business in late 1984. After investigating potential candidates, they selected Jonathan Burleigh.
10. The Yuricks sold The Tubbery, Inc. to Jonathan Burleigh on April 2, 1985. The agreement was structured so that Mr. Burleigh would acquire the assets of the business for $1.00 plus assumption of the liabilities.
11. Among the liabilities Mr. Burleigh assumed were three debts for which the Yuricks were personally liable: a Small Business Administration loan, the lease on the business premises, and the Pennsylvania sales taxes collected but not remitted.
12. Mr. Burleigh paid off the Small Business Administration loan and executed a new lease with the lessor of the business premises, extinguishing the Yuricks' personal liability with respect to those two items.
13. On March 7, 1985, at The Tubbery, Inc., the Yuricks introduced Mr. Varlotto to Mr. Burleigh as someone to whom they intended to sell their business.
14. After further discussions with Mr. Varlotto, to which the Yuricks were not parties, Jonathan Burleigh executed a deferred payment agreement to pay The Tubbery, Inc.'s sales tax in the amount of $14,336.23 over a period of 24 months.
15. Pursuant to the deferred payment agreement, Jonathan Burleigh paid $1,500 to Richard Varlotto on May 28, 1985 and made four subsequent ...