BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
AUDITING DIVISION OF THE : Appeal No. 86 0125
STATE TAX COMMISSION OF UTAH, )
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.
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
Joe B. Pacheco G. Blaine Davis