BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioners, : FINDINGS OF FACT
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
: Appeal No.
88-1175
AUDITING
DIVISION :
UTAH STATE TAX COMMISSION, : Account
Nos.XXXXX
: XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Paul F. Iwasaki, Presiding
Officer, heard the matter for and in behalf of the Commission. Present and representing the Petitioners
were XXXXX. Present and representing
the Respondent were XXXXX, Assistant Attorney General, and XXXXX, Auditing
Division.
Based
upon the testimony and evidence presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1. The tax in question is income tax.
2. The period in question is XXXXX.
3. On XXXXX, the Petitioners left Utah to work
for the XXXXX divisions of their respective Utah companies.
4. The wages paid to XXXXX had withholding
amounts taken out as if she were a resident of XXXXX.
5. XXXXX was required by the Province of XXXXX
to pay income tax as if she were a resident of XXXXX, and was required to pay
income tax on the amount she earned while in XXXXX.
6. While in XXXXX, XXXXX earned $$$$$. She paid XXXXX income tax in the amount of
$$$$$ ($$$$$ U.S. based upon an exchange rate of 74 cents U.S. per $1 XXXXX).
7. For purposes of determining her Utah income
tax, the Auditing Division assessed income tax liabilities on the entire amount
of wages earned by XXXXX in Utah and XXXXX.
That amount totaled $$$$$.
8. While in XXXXX, the Petitioners did not take
out XXXXX citizenship, obtain XXXXX drivers licenses, or establish a domicile
outside of the state of Utah. All real
estate holdings of the Petitioners in Utah were maintained including their home
while they were in XXXXX.
9. Utah has no reciprocity agreement with
regard to income tax payments with XXXXX.
No credit was given to XXXXX on her Utah income tax liability for taxes
paid to the Province of XXXXX.
CONCLUSIONS OF LAW
"Resident
individual" means an individual who is domiciled in this state for any
period of time during the taxable year, but only for the duration of such
period. (Utah Code Ann. §59-10-103(1)(j).)
A
resident individual shall be allowed a credit against the tax otherwise due under
this chapter equal to the amount of the tax imposed on him for the taxable year
by another state, the United States, the District of Columbia, or a possession
of the United States, on income derived from sources which is also subject to
tax under this chapter. (§59-10-106(1))
"Domicile"
means a place there an individual has a true, fixed, permanent home and
principle establishment, and to which place he has (whenever he is absent) the
intention of returning. It is a place
in which a person voluntarily fixed the habitation of himself and family, not
for a mere special or temporary purpose, but with the present intention of
making a permanent home. (Utah State Tax Commission Administrative Rule
865-9-2I.)
DECISION AND ORDER
In
the present case, the singular issue before the Commission is whether XXXXX was
a resident individual of the state of Utah for XXXXX for purposes of
establishing income tax liability. The
primary focus of that determination is whether or not XXXXX's place of domicile
was Utah, or XXXXX.
Rule
865-9-2I(d) defines domicile as the "place where an individual has a true,
fixed, permanent home and principal establishment, and to which place he has
(whenever he is absent) the intention of returning. It is the place in which a person has voluntarily fixed the
habitation of himself and family, not for a mere special or temporary
purpose, but with the present intention of making a permanent home."
(Emphasis added).
In
assessing the actions of XXXXX against the requirements of the statute, the Tax
Commission finds that XXXXX's place of domicile was in Utah and not in XXXXX.
The
basis for XXXXX's move to XXXXX was not out of a desire to make that her
permanent place of residence, but rather, was to accompany her husband who had
been transferred to XXXXX rather than being laid off due to a reduction in
force. Thus, it appears that the
XXXXXs' intentions were to accept the temporary job reassignment and return to
Utah as soon as possible. This conclusion is further supported by the fact that
the XXXXXs did not make any of the changes in their citizenship, nor
identification documents such as drivers' licenses, or other changes which
would be indicative of their intention to permanently change their place of
residence. Indeed, the XXXXXs maintained
all their real estate holdings in Utah while they were in XXXXX.
Although
it appears harsh to require XXXXX to pay Utah income tax for wages earned while
in XXXXX and not giving her any credit for the income taxes paid to XXXXX, the
statute and rules simply do not allow the relief the Petitioners seek. Utah Code Ann. §59-10-406 allows for credit
for income tax paid by an individual to another state of the United States, the
District of Columbia, or a possession of the United States. However, there is no such provision for
credit to be given for income tax paid to a foreign country or province of a
foreign country.
Based
upon the foregoing, the Tax Commission hereby denies that Petitioners' request
for credit to be given for taxes paid to the Province of XXXXX for the tax year
XXXXX. It is so ordered.
DATED
this 26 day of June, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner