BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
AUDITING DIVISION OF : Appeal No. 87-2197
UTAH STATE TAX COMMISSION, :
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for an informal hearing on XXXXX. James E. Harward, Hearing Officer, heard the matter for and in behalf of the Tax Commission. XXXXX was present. XXXXX represented the Respondent. The Respondent presented evidence regarding the purchase of a XXXXX in XXXXX. The purchase was made in Utah. The Petitioner was in fact a resident of the state of Utah. A non-resident affidavit was executed by the Petitioner. In addition, the Petitioner has acquired a motor home in Utah and again signed a non-resident affidavit. The Petitioner has executed resident income tax returns for the years in question and has a residence located in XXXXX.
The Petitioner presented evidence that the non-resident affidavit was signed in blank without being filled out at the direction of the salesman. Further, the Petitioner testified that he had numerous dealings with the car dealer in question and has purchased many vehicles here over a period of years. The salesman was a long-time friend and acquaintance of the family and knew of the residence of the Petitioner in XXXXX. Further, the Petitioner stressed the point that the salesman and the dealership was very familiar with the Petitioner and the fact that he was a resident in the state of Utah and owned property in the state of XXXXX. Further, the Petitioner indicated that all cars are licensed in Utah; however, trucks used on the farm are licensed in XXXXX for farm use.
DECISION AND ORDER
The Tax Commission finds that pursuant to the statutes of the state of Utah and the rules of the Utah State Tax Commission that the sales tax on the purchase of the XXXXX should have been assessed. Therefore, the Tax Commission affirms the assessment of the tax, a 10% negligence penalty and interest.
The Petitioner has urged the Commission to impose the tax penalty and interest on the dealership, which the Commission has the power to do. However, if the dealership had properly collected the sales tax on the sale of the vehicle, the Petitioner would have been required to pay that sales tax. If the Commission assessed the sales tax against the dealership, the dealership would simply then seek collection proceedings against the Petitioner. Sustaining the assessment of the sales tax in this decision only requires the Petitioner to pay the amount which would have been required to be paid at the time of the purchase together with the interest for the use of the money. From the facts presented at the hearing, it is apparent that the Petitioner was well known to the dealership and reasonably relied upon the dealer to know what taxes should be collected. The Commission has seriously considered imposing the tax penalty and interest on the dealership. Apparently the dealer knowingly failed to properly collect the required sales tax. Because of the apparent violation, the Commission has also considered issuing an order to show cause to the dealership to require them to show why their sales tax license should not be revoked.
However, the Tax Commission will forward a copy of this decision to XXXXX at XXXXX and to the XXXXX to be placed in the dealer's file so that if other violations of the sales tax laws are made by XXXXX, an order may be issued to require them to show cause why their sales tax license should not be revoked for such violations.
DATED this 31 day of May, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis