BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
AUDITING
DIVISION OF THE : Appeal No. 86 0125
STATE TAX
COMMISSION OF UTAH, )
:
Respondent. )
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission on XXXXX. James E. Harward, Hearing Officer, heard the
matter for the Tax Commission. XXXXX
appeared representing the Petitioner.
XXXXX, Assistant Attorney General, appeared representing the Respondent.
In
XXXXX, four individuals purchased an airplane from XXXXX located in XXXXX,
Utah. All of the purchase documents
including the purchase order, registration, customer acceptance form, exemption
certificate, and application for aircraft radio and station license indicate
that the purchasers were a partnership consisting of XXXXX, XXXXX, XXXXX, and
XXXXX. The airplane was purchased in
XXXXX, and delivered in Oregon. It was
then brought to Utah and has been leased to third parties.
The
Petitioner argues that; (1) the airplane has been placed in interstate
commerce, and therefore, is exempt from taxation; (2) that the Tax Commission
has no jurisdiction because the notice was sent to a non-existing partnership;
(3) the property was purchased for resale and, therefore, exempt from taxation;
(4) the lease payments should have sales tax on those; (5) that the tax should
be allocated pro-rata among the individuals rather than jointly and separately,
and finally the penalties are inappropriate in that they relied on competent
legal advise and no negligence or willfulness is involved.
FINDINGS
The
airplane was never placed in interstate commerce, but was purchased from a Utah
company by a Utah partnership, thereby, creating a taxable event in Utah,
despite the fact that they took delivery of the airplane out of state.
DECISION AND ORDER
Based
upon the foregoing, it is the Decision and Order that the airplane was purchased
from a Utah business, i.e., XXXXX located at XXXXX, XXXXX, Utah. The purchase was made by a partnership
consisting of XXXXX, XXXXX, XXXXX, and XXXXX.
No evidence has been presented that would indicate that the airplane was
purchased for resale or lease to third parties. The Commission concludes that based upon this evidence, this
transaction is subject to sales and use tax in the State of Utah and,
therefore, affirms the assessment made by the Auditing Division.
In
reviewing the assessment of the penalty, the Tax Commission finds no reason why
the penalty should be waived. The
Commission continues to affirm its policy that reliance upon
"competent" advise from "professionals" which is incorrect
is not sufficient cause to avoid the assessment of the penalty The Tax
Commission will not waive the interest associated with the tax deficiency.
DATED
this 1 day of September, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner