87-2671 - Sales





Petitioner, :




Respondent. :



This is an appeal to the Utah State Tax Commission from an audit deficiency prepared by Respondent on the purchase of a XXXXX from XXXXX in XXXXX on XXXXX. 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 Tax Commission. XXXXX, Attorney at Law, represented the Petitioner. XXXXX, Supervising Auditor, represented the Respondent.

Petitioner stated that he is an executive officer of XXXXX and many of its subsidiaries. Petitioner stated that at the time of purchase of automobile he was a resident of the state of XXXXX and not of Utah. Petitioner stated that on XXXXX XXXXX decentralized and became a holding company. Petitioner was appointed president of the XXXXX operations. On XXXXX the office became operational, and on XXXXX Petitioner was transferred to XXXXX. Petitioner purchased a home in XXXXX on XXXXX. This home required extensive remodeling which took longer than anticipated. Petitioner's family moved in XXXXX. XXXXX purchased Petitioner's XXXXX home on XXXXX, with the sale retroactive to XXXXX. No deed was recorded by XXXXX, however. Petitioner had no remaining equity interest in the XXXXX home. Petitioner stayed in a XXXXX hotel until the new home was finished. Since XXXXX Petitioner has had XXXXX income taxes withheld from his compensation. On XXXXX Petitioner registered his children in XXXXX. On XXXXX Petitioner purchased the subject vehicle in XXXXX, and during the first week in XXXXX Petitioner's family moved to XXXXX. Three weeks prior to the purchase of the car, Petitioner renewed his Utah driver's license because it was more convenient than getting a XXXXX license. Respondent determined a tax base of $$$$$, assessed a sales and use tax (%%%%%) of $$$$$; assessed a %%%%% penalty of $$$$$; and assessed interest of $$$$$ (%%%%% per month from XXXXX) for a total amount due of $$$$$.

Respondent presented a nonresident affidavit executed by Petitioner. Petitioner stated in question no. 6 that he was not a resident of Utah and had not lived in Utah within the past 60 days (prior to XXXXX). Respondent noted that Petitioner listed a Utah driver's license number in response to question no. 12 of the nonresident affidavit.


The Tax Commission finds that Petitioner was a resident of Utah at the time of purchase pursuant to Tax Commission Rule R873-O1V. Subsection 3 states:

3. Any person, except a tourist temporarily within this state, or a student covered under Rule R873-04V, who owns, leases, or rents a residence or a place of business within this state, or occupies or permits to be occupied, a Utah residence or place of business [is a "resident"].

Petitioner's family occupied a Utah residence at the time of purchase of the vehicle. They resided in the XXXXX home after Petitioner transferred to XXXXX and through the first week of XXXXX. Petitioner, himself, had occupied the home up to XXXXX--well within the 60 day period addressed in question 6 of the nonresident affidavit. Subsection 6 of Tax Commission Rule R873-O1V further defines the term "resident":

6. Any person declaring himself to be a resident of Utah to obtain privileges not ordinarily extended to nonresidents, such as going to school or placing children in school without paying nonresident tuition or fees [is a resident]. Petitioner availed himself of privileges not ordinarily extended to nonresidents when he renewed his Utah driver's license on XXXXX, four days after he transferred to XXXXX. The Tax Commission finds that Petitioner was a resident of Utah for motor vehicle registration purposes at the time of the purchase of the subject vehicle. Respondent properly assessed tax and interest on the purchase of the vehicle. However, the Tax Commission finds that Petitioner's actions do not rise to the level of intentional disregard of law or rule. Petitioner's actions demonstrate negligence.


Based on the foregoing, it is the decision and order of the Utah State Tax Commission that Petitioner's petition for redetermination be denied with the exception that a %%%%% negligence penalty be imposed in lieu of a %%%%% penalty for intentional disregard of law or rule. If Petitioner is able to provide evidence with ten (10) days of the date of this decision that he paid use tax to XXXXX at the time he registered the subject vehicle in XXXXX then the Tax Commission will, in its discretion, waive the audit deficiency in its entirety. If nothing is forthcoming with ten days then the audit deficiency shall stand.

DATED this 27 day of June, 1988.


R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner