BEFORE THE UTAH STATE TAX COMMISSION
Petitioners, : FINDINGS OF FACT
: CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
: Appeal No. 88-1175
AUDITING DIVISION :
UTAH STATE TAX COMMISSION, : Account Nos.XXXXX
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
Joe B. Pacheco G. Blaine Davis