BEFORE THE UTAH STATE TAX COMMISSION
PETITIONERS, ) ORDER
Petitioners, ) Appeal No. 01-1861
v. ) Account No. #####
AUDITING DIVISION OF ) Tax Type: Income Tax
THE UTAH STATE TAX )
COMMISSION, ) Tax Year: 1998
Respondent. ) Judge: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: PETITIONER 1
For Respondent: Mr. Laron Lind, Assistant Attorney General
Mr. Brent Taylor, from the Auditing Division
Ms. Becky McKenzie, from the Auditing Division
STATEMENT OF THE CASE
This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. '59-1-502.5, on September 5, 2002.
The issue in this proceeding is whether PETITIONER 1 was domiciled in the State of Utah during 1998 and 1999.
PETITIONER 1 was previously married and lived in the CITY area. Following his divorce, his wife and two children remained in the CITY 1 area.
In October 1997, PETTIIONER 1 went to work in CITY 2, STATE. He stated he went there for a three-month job, but ended up staying five years. At the time he went to STATE, he was engaged to be married to his present wife, PETITIOENR 2, and they were married on July 25, 1998 within the State of Utah.
On January 14, 2000, PETITIONER 1 was injured in an automobile accident in STATE and returned to Utah a few days thereafter to recuperate and heal from the injuries he received in the accident. He returned to Utah to live with his present wife, PETITIONER 2. During the time PETITIONER 1 was working in STATE, he would return to Utah approximately once per month to see his wife, and she went to STATE approximately three times after their marriage and before his return.
During that time period, PETITIONER 1 also worked for three weeks in the State of STATE 2, and he filed an STATE 2 non-resident return to pay taxes on the money he earned in that state. The address on his STATE 2 return was his present CITY address.
PETITIONER 2 owns a home in CITY, Utah, in which the parties now live, which was built for her prior to her marriage to PETITIONER 1. The 1995 Utah State Income Tax Return for PETITIONER 1 was not filed until March 8, 1997, after his marriage to PETITIONER 2, and it showed the same address in CITY.
During the time PETITIONER 1 was employed in STATE, he lived in housing which was provided by his employer. He did not rent or own separate real estate in STATE.
During the years at issue in this proceeding, PETITIONER 1 had a Utah driver's license and he did not have a STATE driver's license. He also obtained a resident hunting and fishing license in the State of Utah, and did not obtain either a hunting and fishing license in STATE. Further, PETITIONER 1 had one vehicle registered in the State of Utah, and in STATE he drove a vehicle owned by his employer.
The insurance agent for PETITIONERS resides in COUNTY County, Utah, and the tax preparer is located in Utah. PETITIONER 1 has an account at the CITY Federal Credit Union, and does not have an account at a financial institution in STATE. Further, he is a member of the Eagles Club in Utah, and not in STATE.
1. A resident individual means an individual who is either domiciled in this state for any period of time during the taxable year, or 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. (Utah Code Ann. §59-10-103(1)(j).)
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 purpose, but with the present intention of making a permanent home. 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. Utah Administrative Code R865-9I-2.D.
3. A person's intentions are determined by his or her actions, and not by verbal declarations.
In this matter, PETITIONER 1 feels strongly that he was domiciled in STATE because most of his time was spent within that state. However, there is no evidence to show that PETITIONER ever abandoned his domicile in Utah, or that he ever took steps to establish a domicile in STATE. His personal and financial contacts were all located in this state, his wife and his children by his former marriage were within this state, and Utah is the place to which he would continually return, notwithstanding that he was out of state for purposes of employment.
It appears that the presence of PETITIONER 1 in the State of STATE was for the special and limited purpose of his employment, and STATE was not the place to which he intended to return whenever he was absent. Once his employment ended in STATE, he immediately returned to the State of Utah and has continued to reside within this state. All of the permanent contacts of PETITIONER 1 were with the State of Utah, including his driver's license, motor vehicle registration, banking institution, location of his wife, hunting and fishing license, and he filed tax returns with the federal government and the State of STATE 2 showing Utah as his place of residence. He did not have any similar contacts with the State of STATE. The weight of the evidence indicates that PETITIONER 1 never terminated or abandoned his Utah domicile, and never established a domicile in STATE or any other state.
DECISION AND ORDER
Based upon the foregoing, the Commission hereby determines that during the calendar years 1998 and 1999, PETITIONER 1 remained domiciled in the State of Utah, and his income earned in that state is taxable within the State of Utah. The audit assessment made by Respondent is hereby affirmed. It is so ordered.
This decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134
Failure to request a Formal Hearing will preclude any further appeal rights in this matter.
DATED this 24th day of September , 2002.
G. Blaine Davis
Administrative Law Judge
BY ORDER OF THE UTAH STATE TAX COMMISSION.
The Commission has reviewed this case and the undersigned concur in this decision.
DATED this 24th day of September , 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson