BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
AUDITING DIVISION OF THE : Appeal No. 86 0113
STATE TAX COMMISSION OF UTAH, )
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.
R.H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis