Income Tax

Signed 3/28/03





: Formal Hearing Decision and Order

Petitioner, :

: Appeal No. 01-0895

v. :

: Acct. No. ########

Auditing Division of the Utah State :

Tax Commission, : Tax Type Income


Respondent. : Tax Period 1997 & 1998





Irene Rees, Administrative Law Judge



For Petitioner: PETITIONER

For Respondent: Tim Bodily, Assistant Attorney General, and Becky McKenzie, Auditing Division.






Petitioner brings this appeal from assessments issued by Respondent for tax years 1997 and 1998. This matter was scheduled for a Formal Hearing on July 31, 2002. Due to a clerical error in the notice, Petitioner came prepared to argue only the 1998 year. Therefore, hearing was held on the 1998 year and a separate hearing was scheduled for the 1997 year. Prior to the date of the hearing on the 1997 year, Petitioner engaged the services a tax preparer. The preparer asked for a continuance, then eventually sent a notice of withdrawal of the appeal for the 1997 tax year. This order addresses the 1998 tax year.



By the withdrawal of his appeal of the assessment against him for tax year 1997, Petitioner agrees that he was subject to Utah income tax provisions for that year. The question here is whether Petitioner abandoned his Utah domicile and established domicile elsewhere in 1998.


1. Petitioner has owned property and resided in Utah for a number of years prior to tax year 1998. Petitioner filed Utah resident returns for the tax years at issue here, but declared no income on those returns.

2. The Auditing Division issued assessments against Petitioner for tax year 1997 and 1998. Although Petitioner initially objected to both assessments, Petitioner has withdrawn his objections to the assessment for tax year 1997. By that action, Petitioner essentially agrees with the assessment issued against him as a Utah resident for tax year 1997.

3. Petitioner’s living circumstances were not substantially different in tax year 1998. Petitioner was employed by COMPANY A as the foreman of an “extra gang.” In this position, Petitioner and the other employees who work with him are on call to respond to derailments or other special jobs in a multi-state area. Petitioner travels to his assignment stays at each location for the period of time required by the job at hand. When he is on location at a job, he either stays in his motor home on company property or stays in a bunk car provided by the company for his use.

4. Petitioner testified that he lived in his house in CITY, Utah until his wife started divorce proceedings. At some point in 1998, he moved out of the house and began living in his motor home. Petitioner’s mother also lives in the area and Petitioner states that he often stays at her house when he is in Utah.

5. Petitioner owned property in CITY, Utah in 1998. He received his mail at one of his Utah properties throughout the 1998 tax year, and continued to use that address after the 1998 tax year.

Petitioner testified that he bought property in STATE “about a year ago.”

6. For tax year 1998, Petitioner’s employer issued him a W-2 form at his CITY, Utah address. The W-2 shows Utah withholding tax.

7. For 1998, Petitioner filed a federal tax return bearing his CITY, Utah address and a Utah resident return bearing his CITY, Utah address.

8. In 1996, Petitioner renewed his Utah driver’s license for a term that expired in 2001. Petitioner used his CITY, Utah address on that renewal.

9.                  Petitioner established a trust called COMPANY B. Petitioner transferred vehicles into the name of the trust.

10.              In March 1999, Petitioner registered two vehicles in the name of COMPANY B at his CITY, Utah address. [1] It appears that the Utah registrations had lapsed on these vehicles in 1995 and 1996. The property tax clearance information on the Pontiac registration indicates that Petitioner paid the property tax for 1998 and 1999 at the time of registration. A third vehicle, a 1994 Chevrolet, was reregistered in the name of COMPANY B in July 1998. The vehicle was registered at Petitioner’s CITY, Utah address and renewed the Utah registration that was due to expire in December 1998.

11.              Petitioner obtained Utah resident fishing licenses in 1998 and 1999. He used his Utah driver’s license to obtain the resident license and declared his CITY, Utah address as his residence.

12.              PETITIONER prepared a document entitled “Verified Affidavit of Citizenship and Domicile Demand for Proof of Jurisdiction” and served that document on Tim Bodily of the Attorney General’s Office in October 1999. The accompanying “Affidavit of Proof of Service” indicates that PETITIONER claimed to reside in CITY, Utah. By his “Verified Affidavit,” Petitioner claimed to be domiciled in COUNTY County, Utah for 23 years prior to the date of the document. Elsewhere in the document, Petitioner claimed to be domiciled in Utah, although not a resident of the state. Petitioner indicated that any response was to be mailed to his CITY, Utah address.

13.              Petitioner has mailed documents by certified mail to the Auditing Division and the Attorney General’s Office in envelopes bearing his CITY, Utah address. Petitioner’s letter to the auditor in January 2000 indicates Petitioner’s CITY, Utah address as his return address.

16. Petitioner uses a company-provided pager and, more recently, a cell phone. The phone number of his cell phone has a Utah area code and phone number.



1. Utah state tax is imposed on Utah residents in accordance with the provisions of the Utah Individual Income Tax Act, Title 59, Chapter 10 of the Utah Code. For purposes of the Individual Income Tax Act, “resident” is defined in Utah Code Ann. §59-1-103 (1) (k) as:

(i) an individual who is domiciled in this state for any period of time during the taxable year, but only for the duration of such period; or

(ii)    an individual who is not domiciled in this state but maintains a permanent place of abode in this state and spends in the aggregate 183 or more days of the taxable year in this state. (Emphasis added.)



2. Under Utah Admin. Rule R865-9I-2, “domicile” means:

“the place where an individual has a true, fixed, permanent home and principal establishment, and to which place he has (whenever he is absent) the intention of returning. It is the place in which a person has voluntarily fixed the habitation of himself and family, not for a mere special or temporary purpose, but with the present intention of making a permanent home.


3. Utah Admin. Rule R865-9I-2 also establishes a 2-prong test to determine if a party has changed his domicile:

After domicile has been established, two things are necessary to create a new domicile: first, an abandonment of the old domicile; and second, the intention and establishment of a new domicile. The mere intention to abandon a domicile once established is not of itself sufficient to create a new domicile; for before a person can be said to have changed his domicile, a new domicile must be shown.




Petitioner’s only issue in this appeal is whether he is a Utah resident for purpose of the Utah individual income tax provisions. Petitioner argued that he was not in Utah for an aggregate of more than 183 days in 1998. Therefore, he reasons, he was not subject to Utah income tax in that year. Petitioner misreads the Utah law on this issue. Under section 59-10-103 (1) (k), an individual is subject to Utah income tax provisions if he is (1) domiciled in Utah, or (2) a non-resident who is in Utah at least 183 days in the aggregate. In this case, there was no attempt by either party to establish the number of days Petitioner spent in Utah in 1998, nor is there need to do so if Petitioner is shown to be domiciled in Utah in 1998.


The facts of this case indicate that Petitioner was domiciled in Utah within the meaning of Utah Administrative Rule R965-9I-2 in 1997 and for many years prior to 1997. The only determination here is whether the evidence shows that Petitioner abandoned his Utah domicile and established a new domicile elsewhere during or before 1998. The evidence indicates that he did not. Petitioner continued to use his CITY, Utah address for personal mail before, during, and after the tax year in question. He showed no evidence of having established a permanent home in STATE or any other state in 1998. In fact, he traveled to various job sites, as assigned, and stayed only temporarily at each job site. On assignment, he stayed in his motor home or company-provided accommodations and returned to Utah.


Petitioner signed various documents in 1998 and subsequent years showing that he has continually maintained the same residence in CITY, Utah. He registered vehicles at that address, renewed his Utah driver’s license at that address and obtained Utah resident fishing licenses showing that address. He filed federal and state resident returns indicating the CITY, Utah address and he signed an affidavit of his own making declaring COUNTY County, Utah as his place of domicile for a period of some 23 years up to and including the 1998 tax year. Petitioner presented no evidence that he established a permanent home elsewhere in 1998.



Petitioner has withdrawn his appeal of the assessment pertaining to the 1997 assessment. The Commission finds that Petitioner was domiciled in Utah in 1998 and subject to Utah tax for that year. Because Petitioner did not refute the amount of the 1998 assessment, the assessment is affirmed.



DATED this 28th day of March , 2003.



Administrative Law Judge


The undersigned Commissioners have reviewed this matter and concur in this decision.


Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner





Palmer DePaulis Marc B. Johnson

Commissioner Commissioner


[1] One registration application is signed and dated March 1, 1998, but the Tax Commission stamp indicates the date of March 1, 1999.