BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX,
:
Petitioner, :
:
v. : INFORMAL DECISION
:
:
AUDITING
DIVISION OF THE : Appeal No. 86 0953
STATE TAX
COMMISSION OF UTAH, )
:
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for an Informal Hearing on
XXXXX. James E. Harward, Hearing
Officer, heard the matter for the Tax Commission. XXXXX and XXXXX appeared representing the Petitioner. XXXXX appeared representing the Respondent.
Petitioner
presented evidence that the purchaser of a XXXXX which is the subject of this
petition was made by a XXXXX who represented himself to be a resident of the
State of Montana.
Respondent
has assessed the tax, penalty, and interest against the Petitioner on the grounds
that the Petitioner was put on notice that the purchaser was not a bona fide
nonresident of the State of Utah by virtue of the fact that he owned real
property in the State of Utah, he incompletely filled out the nonresident
affidavit form; and he had a Utah driver's license. The Respondent argues that since the purchaser did not qualify as
a nonresident, and that the dealership was put on notice of his
non-qualification as a nonresident, therefore, the dealership was responsible
to collect and remit the sales tax on the transaction.
DECISION AND ORDER
The
Tax Commission, after reviewing the facts and evidence, finds the following
facts to be relevant in arriving at its conclusion:
1. All sales of tangible personal property
within the state of Utah are subject to sales tax.
2. Only certain transactions or items of
tangible personal property are exempt from sales tax.
3. A sale of a motor vehicle of the type
normally registered under the laws of the State of Utah to a bona fide nonresident
is exempt from the sales tax provision to the Utah Code.
4. Anyone who owns property in the State of
Utah, or who is granted privileges not normally granted to a nonresident to the
State of Utah is required to register his vehicle in the State of Utah.
5. The purchaser XXXXX had a Utah driver's
license, i.e., a privilege granted to him by the State of Utah. Furthermore, XXXXX owned real property in
the State of Utah. The transaction
between XXXXX and XXXXX was subject to sales tax.
6. The dealership was put on notice that the
purchaser was not a bona fide nonresident of the State of Utah by virtue of the
fact of the real property address located in XXXXX, Utah, the driver's license
issued to the purchaser in the State of Utah, the credit report which listed
the Utah address, the existence of business transactions within the State of
Utah, and finally the incomplete nonresident affidavit in the dealer file. All of these put the dealership on notice that
the purchaser was not a bona fide nonresident for tax exempt purposes.
7. Because the dealership was put on notice of
the nonresident or questionable nonresident status of the purchaser, the
Petitioner was required to collect sales tax on the transaction. The Petitioner did not collect sales tax on
the transaction.
Based
upon these conclusions, the Tax Commission finds the assessment made by the
Respondent correct and affirms the same.
In arriving at this conclusion, the Tax Commission notes Regulation S23
that states "the burden of proving that a sale is for resale or otherwise
exempt shall be upon the person who makes the sale. In any case, if upon request of any member or agent of the Tax
Commission fails to produce a valid exemption certificate or other similar
acceptable evidence in support of the vendor's claim that a sale is for resale
or otherwise exempt, the sale shall be considered taxable and the tax shall be
payable by the vendor." The Tax
Commission further finds that the Petitioner was negligent in this transaction
and affirms the negligence penalty. The
interest is affirmed.
DATED
this 20 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