87-0150 - Sales





            Petitioner,                                                         :

v.                                                                                 :           INFORMAL DECISION

COLLECTION DIVISION OF THE                          :           Appeal No. 87-0150

STATE TAX COMMISSION OF UTAH,                  )

            Respondent.                                                     :



            An Informal Hearing was held on XXXXX.  XXXXX, Attorney, represented the Petitioner, who was also present at the hearing.  XXXXX and XXXXX represented Respondent.  James E. Harward, Hearing Officer, heard the matter for the State Tax Commission.  Petitioner is protesting the sales tax assessed against his purchase of a XXXXX automobile in XXXXX, the %%%%% fraud penalty and interest.

            Petitioner testified that he had no intention to defraud the State of Utah of sales tax on the XXXXX purchase of his XXXXX automobile. Petitioner was a student at XXXXX and had completed his studies in XXXXX at the time that he purchased the car.  Petitioner is from XXXXX, was employed part time with XXXXX, and was taking a leave of absence to find a job in XXXXX or to go back to school in XXXXX. Petitioner did leave Utah, go to XXXXX and register the car and pay sales tax in XXXXX.  Subsequently Petitioner came back to Utah for further education.  Petitioner argues that the issue of residency or domicile is one of intention and that his return to Utah is not indicative of his residency status when he purchased the car.  Petitioner had closed his bank accounts in Utah, terminated relations with the state, and had left Utah to establish residency in XXXXX.  His return to Utah does not indicate that he committed fraud against Utah.  Petitioner argues that he must have intent to defraud the State and that he had no intent to commit fraud.  Petitioner admitted that he was qualified as a Utah resident at XXXXX.  Respondent argued that although Petitioner signed the non-resident affidavit, he was a resident at the time he purchased the car.  Petitioner had filed a full year resident return with the State of Utah and had paid resident tuition at XXXXX.


            The Commission finds that although Petitioner had no intent to defraud the State of Utah of sales tax on the purchase of his XXXXX, he was a resident at the time of the purchase and should have paid sales tax in Utah.  It is apparent to the Commission that Petitioner did not fully understand the sales tax laws as they apply to the purchase of automobiles in Utah. Petitioner's subsequent payment of sales tax to XXXXX on the purchase of his car and his actions in severing ties with Utah prior to his departure indicate to the Commission that Petitioner believed he would qualify as a XXXXX resident with regards to the purchase of this automobile.  However, Petitioner was a resident of Utah at the time of the purchase and should have paid a Utah sales tax.

            Petitioner is liable to Utah for the full amount of the sales tax. Petitioner should apply to the XXXXX State Tax Commission for a refund of the XXXXX taxes paid.  Because Petitioner did not commit fraud but was negligent in not fully apprising himself of the law, there should be imposed a %%%%% negligence penalty.


            Therefore, it is the Decision and Order of the Utah State Tax Commission to uphold the sales tax assessment against Petitioner and a %%%%% negligence penalty rather than the %%%%% fraud penalty which Respondent assessed. The Commission hereby orders Respondent to adjust its records accordingly and to adjust interest if necessary to reflect the reduced penalty.

            DATED this 1 day of September, 1987.


R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco                                                            G. Blaine Davis

Commissioner   Commissioner