BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : FINDINGS OF FACT,
v. : CONCLUSIONS OF LAW
: AND FINAL DECISION
AUDITING DIVISION OF THE :
UTAH STATE TAX COMMISSION, : Appeal No. 87-0935
This matter came on for hearing before the Utah State Tax Commission in Salt Lake City, Utah on XXXXX. G. Blaine Davis, Commissioner, and Jerry Larrabee acting as a hearing officer heard the matter for the Commission. XXXXX, Attorney at Law, appeared for and in behalf of the Petitioner, together with XXXXX, the husband of the Petitioner. XXXXX, Assistant Attorney General appeared for and in behalf of the Respondent, together with XXXXX of the Auditing Division. Testimony and evidence were presented by each of the parties hereto. Based upon such testimony and evidence, the Commission now makes and enters its
FINDINGS OF FACT
1. This case involves the issue of whether sales tax, 100% penalty, and interest should be imposed on the acquisition of a vehicle in Utah by a Utah resident (which was used primarily in Utah) and which was later registered in XXXXX.
2. The vehicle in question, a XXXXX was purchased from XXXXX in XXXXX by XXXXX, the husband of the Petitioner. In order to purchase such vehicle through the auto auction, it was necessary for XXXXX to represent that he was a licensed and bonded dealer, or that he had authority to act for and in behalf of a licensed bonded dealer.
3. At the time of the transaction, XXXXX was not, and never has been a licensed bonded motor vehicle dealer nor a licensed motor vehicle salesman. He could not remember the name of the licensed bonded dealer through whom he purportedly acquired the vehicle.
4. The vehicle was purchased in either XXXXX. The Petitioner did not have any documentation to sustain his representation that the vehicle had been purchased at XXXXX, and the Respondent presented testimony that the vehicle had never been purchased or sold at XXXXX. XXXXX testified that it was in early XXXXX, but he introduced a check dated XXXXX in the amount of $$$$$, which he testified was for the purchase of the vehicle. The check was not made out to the auto auction, but was made out to the XXXXX. XXXXX testified that his intent was to acquire the vehicle for resale, but the vehicle was registered in the name of XXXXX in the XXXXX on XXXXX, Therefore, the Commission specifically finds that the car which was registered in approximately two weeks to 40 days after the date of acquisition was not purchased with the intent to resale the vehicle. However, it would make no difference to the outcome of this case even if the vehicle was purchased with an intent to resell it.
5. The Petitioner is a resident of the State of Utah and has been a resident of the State of Utah at all times material to this case. She is purchasing a home in XXXXX. She has a Utah Driver's License and her children have always attended school in the XXXXX. Her children have never attended school in any other state or location. The Petitioner and her husband have filed Utah tax returns, and the last time that the Petitioner and her husband voted was in Utah. The Petitioner has lived in XXXXX since XXXXX, and the vehicle was operated and used primarily within the State of Utah.
6. The motor vehicle in question was registered in Utah approximately two years after it was registered in XXXXX, and no sales tax was paid on the vehicle at the time it was registered in Utah and no sales tax has been paid to Utah or any other state at any time.
7. The sale of the motor vehicle occurred within the State of Utah.
8. The price of the acquisition was represented by XXXXX to be $$$$$. The Respondent has argued that the $$$$$ was not to purchase the vehicle, but was a payment on a separate obligation due to the XXXXX, and therefore argues that the purchase price of the vehicle was $$$$$ which was the fair market value of the vehicle at the time it was acquired according to the XXXXX books. However, since the Petitioner's husband testified that the check was paid for the acquisition of the vehicle in question in this case, and since the Respondent did not have any controverting evidence, the Commission finds that the vehicle was purchased for a price of $$$$$, not withstanding the fact that the Commission believes the testimony of the husband of the Petitioner to be of questionable veracity.
Based upon the foregoing findings of fact, the Commission now makes and enters its,
CONCLUSIONS OF LAW
1. Pursuant to §59-12-104 (9) Utah Code Ann. 1953, as amended, the only vehicles which are exempt from the payment of sales tax are those where sales are made to bonafide nonresidents of the State of Utah and are not thereafter registered or used in the State of Utah except as is necessary to transport them to the borders of the State of Utah. The vehicle in question was purchased within the State of Utah by the Petitioner who was a Utah resident, and was thereafter both registered and used within the State of Utah.
2. In order to purchase the vehicle at the auction and to avoid the payment of sales tax, the husband of the Petitioner must have either fraudulently represented that he was entitled to purchase vehicles at XXXXX, or someone must have fraudulently signed a nonresident affidavit representing that the purchaser of the vehicle was a nonresident and that the vehicle would not be registered or used within the State of Utah. In either case, fraud and misrepresentation occurred by the Petitioner or her husband. If the fraud and misrepresentation occurred by the Petitioners' husband, it is attributable to her in this transaction.
3. This transaction was subject to sales tax within the State of Utah, and would have been subject to such tax even if the Petitioner or her husband intended to take the vehicle from the State of Utah at the time it was acquired. Their intention does not govern the taxability or nontaxability of this transaction.
4. The Petitioner had the burden of proving that sales tax was improperly applied to this transaction by the Auditing Division, and the Petitioner has failed to sustain this burden of proof.
5. The Respondent had the burden of proving that the 100% penalty imposed by §59-1-302 (3) should be applied to this transaction. The Commission concludes that the Petitioner did attempt to evade or defeat the payment of the sales tax, and that therefore the 100% penalty should apply. The Respondent did sustain that burden of proof.
6. §59-1-302 (8)(c) Utah Code Ann. 1953, as amended specifically provides that, "the Commission or Court need not find a bad motive or specific intent to defraud the government or deprive it of revenue to establish willfulness under this section."
Based upon the foregoing findings of fact and conclusions of law, the Commission now makes and enters its
DECISION AND ORDER
It is the decision and order of the Utah State Tax Commission that the Petitioner's request for abatement of the assessment of tax, penalty and interest on the purchase of the XXXXX be denied except that the amount of tax, penalty and interest should be calculated on a purchase price of $$$$$ instead $$$$$. Except as set forth in the preceding paragraph, the assessment of tax, penalty and interest by the Auditing Division of the Utah State Tax Commission is hereby affirmed.
DATED this 17 day of July, 1989.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis