BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
AUDITING DIVISION OF THE : Appeal No. 86 0953
STATE TAX COMMISSION OF UTAH, )
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.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis