BEFORE THE STATE TAX COMMISSION
OF UTAH
_____________________________________
XXXXX
Petitioner, :
v. : INFORMAL DECISION
AUDITING
DIVISION OF THE : Appeal No. 87-0919
STATE TAX
COMMISSION OF UTAH, )
Respondent. :
_____________________________________
STATEMENT OF CASE
This
is an appeal to the Utah State Tax Commission from a decision of the Auditing
Division of the Utah State Tax Commission (Respondent) to assess tax, penalty
and interest on the purchase of a XXXXX by Petitioner. An Informal Hearing was
held on XXXXX in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard
the matter for the Commission. XXXXX
appeared representing himself. Also
present for Petitioner was XXXXX, his mother.
XXXXX represented Respondent.
Petitioner
stated that he was a nonresident of Utah residing at XXXXX. XXXXX, the date of the purchase of the
subject vehicle, Petitioner did not know that he would later attend XXXXX and
fully intended to reside and work in XXXXX.
On or about XXXXX, Petitioner decided to attend XXXXX and hand-delivered
his application for admission to XXXXX Petitioner then came to Utah on or about
XXXXX and has resided in Utah continuously since then.
Respondent
determined a tax base of $$$$$ on the purchase of the subject vehicle, assessed
a sales tax (5.5%) of $$$$$, assessed a 100% penalty of $$$$$, and assessed
interest (1% per month from XXXXX) of $$$$$ for a total amount due of
$$$$$. Respondent stated that the
nonresident affidavit executed by Petitioner only applies if the vehicle is not
thereafter used in Utah other than for occasional irregular use in Utah.
Respondent stated that Petitioner was required to register the vehicle in Utah
even though Petitioner was a full-time student because Petitioner was employed
in Utah.
FINDINGS
The
Utah Code exempts vehicle sales to bona fide nonresidents of Utah from sales
and use taxes. Utah Code Ann.
§59-12-104(9) (1953) (old Section 59-15-6(1)(i)). The vehicle must not thereafter be used in Utah except as
necessary to transport it to the borders of the state. "Despite the strict wording of the
statute, as a matter of practicality, infrequent, occasional, nonbusiness use
of a vehicle in Utah, such as by a tourist, will not void this exemption"
Tax Bulletin 10-87, June 24, 1987.
At
the time of the purchase of the vehicle, Petitioner was issued a temporary
permit which expired XXXXX. Petitioner
registered the subject vehicle in Idaho on XXXXX. This was approximately nine days after Petitioner established an
intent to attend XXXXX in XXXXX. Petitioner's subsequent return to Utah to
attend XXXXX voided the nonresident affidavit which had exempted Petitioner
from Utah sales tax. The subsequent use
by Petitioner of the vehicle in Utah was not an infrequent occasional
nonbusiness use in Utah. Upon
Petitioner's return to Utah he was required to register the vehicle in Utah and
to pay the sales tax on the purchase of the vehicle. Petitioner did not do so.
Petitioner
is liable for sales tax to the state of Utah for the purchase of the subject
vehicle. A credit will be allowed for
the payment of sales tax to the state of XXXXX. Petitioner was negligent when he registered the vehicle in XXXXX
subsequent to his intent to return to Utah to attend school, thereby failing to
register the vehicle in Utah and pay the sales tax in Utah. Petitioner is properly assessed a 10%
negligence penalty. However, fraud has
not been established in the present matter.
Therefore the 100% fraud penalty is abated. Interest is properly assessed in this matter since the Tax
Commission was denied the use of the money during the period of delinquency.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that the assessment
of tax by the Auditing Division of the Utah State Tax Commission be
affirmed. Credit shall be allowed for
tax paid to XXXXX. A 10% negligence
penalty is imposed in lieu of the 100% fraud penalty. Interest is properly assessed in this matter. The Auditing Division of the Utah State Tax
Commission is hereby directed to adjust its records in accordance with this
decision.
DATED
this 11 day of December, 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