BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
AUDITING DIVISION
OF THE : Appeal No. 86 0113
STATE TAX
COMMISSION OF UTAH, )
:
Respondent. )
_____________________________________
STATEMENT OF CASE
An
Informal Hearing was held on August 17, 1987.
James E. Harward, Hearing Officer, heard the matter for the Utah State
Tax Commission. XXXXX and XXXXX
appeared representing themselves. XXXXX
and XXXXX represented Respondent.
Respondent assessed a 5.75 percent sales tax on Petitioner's XXXXX
purchase of a XXXXX from XXXXX, located in XXXXX, Utah. Respondent claimed that Petitioners were
Utah residents and thus registered the motorhome outside of Utah in an effort
to evade the Utah sales tax. Respondent
consequently assessed a 100 percent fraud penalty and interest at 1 percent per
month from July 17, XXXXX, to January 17, XXXXX.
Petitioners
claim that they are not residents of Utah because they have been residents of
XXXXX, Idaho, since 1962. Petitioners
testified that they have operated a pre-school day-care in XXXXX for 23 years.
Petitioners claim that the motorhome is located in Utah because there was not a
service department in Idaho that could service the motorhome. The motorhome apparently had many
defects. Petitioners testified that
they had the motorhome licensed in Oregon because it was manufactured there and
sent there for repairs several times.
On cross examination, Petitioners admitted that they owned a condominium
in XXXXX, Utah, and that they were going to retire in XXXXX. They said however, that they lived in XXXXX
and had never been residents of Utah.
Respondent
argued that the nonresident affidavit Petitioners claimed to have signed was
false and that it was signed in an effort to avoid the Utah sales tax. Respondent pointed out that on the buyer's
order of the motorhome from the dealer, Petitioners listed an Idaho address,
but that on the First Security bank application, security agreement, and credit
report, a Utah address was listed.
Furthermore, XXXXX had a Utah driver's license with a Utah address and
had been listed in the telephone directory for the last four years. Petitioners filed Utah resident individual
income tax returns for the years XXXXX, XXXXX, and XXXXX, and attached Idaho
nonresident income tax returns to the Utah returns in XXXXX and XXXXX. Respondent noted that Petitioner's XXXXX
return listed an Idaho address but he said that this return was filed after the
assessment in issue was made.
Respondent also indicated that XXXXX is a registered voter in XXXXX
County and is registered with the Utah State Division of Real Estate as a sales
agent for XXXXX.
Petitioner
responded to Respondent's testimony that they would pay the tax if the penalty
were waived and that they had to be in Utah because of a heart condition.
DECISION AND ORDER
Based
on the foregoing, it is the Decision and Order of the Utah State Tax Commission
to uphold Respondent's assessment of sales tax, fraud penalty, and
interest. Respondent's evidence shows
that Petitioners were Utah residents for purposes of the Utah Sales Tax Act and
that Petitioner's actions in registering the motorhome out of state and in
signing a nonresident affidavit in light of all the evidence of their residency
to the contrary shows intent to defraud the state of sales tax.
DATED
this 16 day of October, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
ABSENT
R.H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner