SALES

86-2026

Signed 3/20/87

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX,

Petitioner, )

v. ) INFORMAL DECISION

)

AUDITING DIVISION OF THE ) Appeal No. 86 2026

STATE TAX COMMISSION OF UTAH, ) Account No. XXXXX

Respondent. )

_____________________________________

STATEMENT OF CASE

This is an appeal to the Utah State Tax Commission from a sales and use tax audit prepared by the Auditing Division of the Utah State Tax Commission (Respondent). Petitioner filed a Petition for Redetermination on XXXXX, but did not request an oral hearing. Therefore, the Tax Commission decides this matter based on the materials in the file.

Petitioner objected to Respondent's determination that rental payments on a lease involving an aircraft and spare engine are not exempt from sales tax. Petitioner asserted that the lease transaction qualified for an exemption pursuant to Utah Code Ann. ?59‑15‑6(1)(e) (1953).

Respondent stated that the lease agreement covered both the aircraft and the spare engine, and that the amount for the engine is incidental to the total lease amount. Respondent alleged that Petitioner has misinterpreted Section 59‑15‑6.

FINDINGS

Utah Code Ann. ?59‑15‑6(1)(e) (1953) states that:

There are exempted from the taxes imposed by this chapter the gross receipts from:....(e)all sales of parts and equipment installed in aircraft used primarily in scheduled interstate or foreign commerce.

Petitioner's rental payments on a lease involving aircraft and spare engine are not exempt from sales tax. The exemption set forth in Section 59‑15‑6 does not extend to the purchase or lease of aircraft.

DECISION AND ORDER

It is the Decision and Order of the Utah State Tax Commission that Petitioner's Petition for Redetermination be denied.

The sales and use tax audit prepared by the Auditing Division of the Utah State Tax Commission is hereby affirmed.

DATED this 20 day of March, 1987.

BY ORDER OF THE STATE TAX COMMISSION OF UTAH.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner

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