BEFORE THE UTAH STATE TAX COMMISSION
Petitioners, ) Appeal No. 02-0545
v. ) Account No. #####
AUDITING DIVISION ) Tax Type: Income Tax
OF THE UTAH STATE TAX )
COMMISSION, ) Tax Year: 1998
Respondent. ) Judge: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: Mr. Petitioner
For Respondent: Mr. Gale Francis, Assistant Attorney General
Ms. Angie Hillas, from the Auditing Division
Ms. Amy Gillette, 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 November 13, 2002.
The issue in this proceeding is whether PETITIONER was domiciled in the State of Utah for the years 1998 and 1999, and was therefore required to file income tax returns in the State of Utah.
MR. and MRS. PETITONER are husband and wife, having been married for a substantial number of years. MRS. PETITIONER has continuously lived in Utah during the periods at issue. However, in 1989, the marriage of the parties was "not working".
In August 1989, MR. PETITONER obtained employment in CITY STATE, and the parties separated, but did not want to terminate the marriage. MR. PETITONER worked in CITY STATE from August 1989 until January of 1990, and lived in a rented apartment during period of time. In January 1990, MR. PETITIONER moved to CITY, STATE and bought a trailer house to live in. He worked and lived in CITY, STATE from January 1990 until sometime in 1994. In 1994, MR. PETITIONER moved to CITY, STATE and lived in an apartment until November 1999. There was a two-week period during 1998 when he returned to Utah, but he stayed with a friend and did not stay with his wife and children.
During the time he was in STATE, MR. PETITIONER would return to be with his wife and children on Thanksgiving, Christmas, birthdays, and would also frequently come to Utah for weekends, sometimes as much as two or three times per month.
MR. and MRS.. PETTIONER had a home located in CITY County, which was in joint tenancy during the years at issue. The telephone and utilities were in the name of MR. PETITIONER prior to the time he went to STATE, and have remained in his name to the current time.
MRS. PETITIONER had an automobile in Utah, which was in the name of MR. PETITIONER. During that time, MR. PETITIONER also had three vehicles, which were licensed in STATE. He had a 1989 Nissan 240Z, which was purchased in STATE and licensed in STATE. He also had a 1992 Nissan Pick-up Truck and a 1997 Chevrolet, which were purchased in Utah but were originally licensed in STATE and were never operated in Utah except when he would return to be with his family.
In 1997, MR. PETITIONER purchased a resident elk hunting license in STATE. In 1994, MR. PETITIONER bought a non-resident hunting license in the State of Utah.
MR. PETITIONER obtained a STATE driver's license in December 1989, and continued to use that driver's license until he returned to Utah. His Utah driver's license was surrendered to the State of Utah on April 24, 1990. He obtained a current Utah driver's license on October 31, 2000.
MR. PETITIONER registered to vote in STATE. Mr. and Mrs. PETITIONER each had separate bank accounts MR. PETITIONER had a bank account in STATE, and MRS. PETITIONER had a bank account in Utah. MR. PETITIONER’S name was removed from the bank account of MRS. PETITIONER and he therefore did not have signatory authority on the bank in Utah.
MR. PETITIONER would periodically send money to MRS. PETITIONER to be used to pay the house payment and a portion of the family expenses, especially for the children. MRS. PETITIONER would deposit that money in her account and would then pay the bills with checks signed by her on her account.
For 1998 and 1999, Mr. and Mrs. PETITIONER filed joint federal income tax returns and MRS. PETITIONER filed a separate State of Utah income tax return. MR. PETITIONER did not file a state income tax return, because he deemed himself to be a domicile of STATE and not required to file any income tax return with the State of Utah.
MR. PETITIONER had his own furniture in STATE, and took all of his personal effects to STATE with him. He did not keep items at the home of the parties in Utah.
In 1999, the parties decided to try again to see if their marriage might work. Accordingly, MR. PETITIONER returned and moved in with his wife on November 26, 1999.
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 be verbal declarations.
In this matter, there is strong evidence to support both sides of the issue. On the one hand, Petitioner did move to STATE in 1989, he surrendered his Utah driver's license, obtained a STATE driver's license, opened a STATE bank account, and was removed from his wife's Utah bank account, rented apartments in STATE, registered three separate vehicles in STATE, registered to vote in STATE, purchased a resident elk hunting license in STATE, and purchased a non-resident hunting license in Utah. On the other hand, he was not divorced, maintained his home in joint tenancy in Utah, had the telephone and utilities in Utah at his home registered in his name, had a vehicle in Utah registered in his name, and filed a joint federal income tax return with Utah shown as his address. The strongest factor indicating his domicile may be in Utah was his continuing to return to this state for Thanksgiving, Christmas, birthdays, and regular weekend visits with his wife and children. This would indicate that Utah may be the place in which he has "a true, fixed permanent home and principle home and establishment, and to which place he has "whenever he is absent" the intention of returning.
After a careful evaluation of the evidence, the Commission determines that a preponderance of the evidence indicates that MR. PETITIONER abandoned his Utah domicile and established a new domicile in STATE, and that such actions were effective up until his return to Utah on November 26, 1999.
DECISION AND ORDER
Based upon the foregoing, the Commission hereby determines that for 1998 and 1999, Petitioner, MR. PETITITONER, was domiciled in STATE up to and including November 25, 1999. From and after November 26, 1999, Petitioner, MR. PETITIONER was domiciled in Utah. The Commission further determines that MRS. PETITIONER was domiciled in Utah for both 1998 and 1999. Respondent is ordered to amend its audit to reflect this decision. 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 30th day of December, 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 30th day of December, 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson