87-0897 - Sales





            Petitioner,                                                         :           FINDINGS OF FACT,

v.                                                                                 :           CONCLUSIONS OF LAW

                                                                                    :           AND FINAL DECISION

AUDIT DIVISION OF THE                                       :

STATE TAX COMMISSION OF UTAH,                  )           Appeal No. 87-0897

            Respondent.                                                     :


            This matter came before the Utah State Tax Commission for a formal hearing on the XXXXX.  James E. Harward, Hearing Officer, heard the matter for and on behalf of the Tax Commission.  XXXXX appeared representing the Petitioner.  XXXXX appeared representing the Respondent.  The Hearing Officer took evidence and argument. The Tax Commission, after reviewing that evidence and arguments and the recommendations of the Hearing Officer, makes its:


            1. The tax in question is sales tax.

            2. The period in question is XXXXX.

            3. The Petitioner purchased a XXXXX.

            4. The Petitioner did not pay sales tax upon the purchase of the aircraft.

            5. The Petitioner is a company qualified to do business in the State of Utah which certificate was issued on the XXXXX and is presently in good standing.

            6. The Petitioner purchased the aircraft from XXXXX for the sum of $$$$$ with a trade in of $$$$$ for a XXXXX.

            7. The Petitioner affirmed on at least two occasions, once on XXXXX and once on XXXXX that the aircraft was purchased from XXXXX.

            8. The Petitioner used the aircraft in XXXXX among other places.  The sale was consummated between two Utah entities, XXXXX and the Petitioner.


            1. Utah Code Ann.59-12-103 levies a tax on the purchaser for amount paid or charged for retail sales of tangible personal property made within the state.

            2. Utah Code Ann.59-12-104 sets forth certain exemptions to the sales tax imposed by 59-12-103.  However, no exemption exists for a sale between two Utah entities.  Regulation RH65-12u defines storage as including storing, keeping, retention of or exercise of dominion, or control over tangible personal property within Utah.


            The Tax Commission after reviewing the facts and evidence presented at the hearing finds that the assertions of the Petitioner are self-serving and given little weight.  All of the written documentation indicates that the purchase of the aircraft was done from XXXXX, a Utah Company, by the Petitioner, a Utah entity.  This in and of itself is sufficient for the imposition of a sales tax in this matter pursuant to regulation R865-12u and Utah Code Ann.59-12-103.  In addition, no exemption is set out in Utah Code Ann.59-12-104 which would exempt this transaction from tax.  The Petitioners argument that since it was never brought back into the state except for its 100 hour service until XXXXX is without merit.  The rule sets forth that any exercise of dominion or control over the tangible personal property within the state is sufficient grounds for the imposition of the tax.  Clearly the Petitioner exercised control over the aircraft in that it owned it, directed its movements and its whereabouts.  Therefore, sufficient nexus has been met and grounds exist for the imposition of the tax.  Therefore Petitioner's request is denied and the assessment is affirmed.

            DATED this 22 day of June, 1989.


R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco                                                            G. Blaine Davis

Commissioner                                                               Commissioner