Signed 9/12/90







          Petitioner,             )

                                  :    FINDINGS OF FACT,

v.                                )    CONCLUSIONS OF LAW

                                  :    AND FINAL DECISION


UTAH STATE TAX COMMISSION,        :    Appeal No. 88‑1350

          Respondent.             )



                             STATEMENT OF CASE

          This matter came before the Utah State Tax Commission pursuant to the Petitioner's request for redetermination of a decision of the Property Tax Division which found the Petitioner liable for property tax on XXXXX owned by the Petitioner.

          At the request of the parties, no hearing was held on this matter, and the decision of the Commission is based upon the brief and memoranda submitted by the parties.

          Based upon the arguments presented by the parties, the Tax Commission hereby makes its:

                             FINDINGS OF FACT

          1. The tax in question is property tax.

          2. The period in question is XXXXX.

          3. The Petitioner is a municipal corporation located in the state of XXXXX.

          4. The Petitioner owns and operates its utilities including municipal XXXXX.

          5. The Petitioner owns XXXXX which are used to acquire and transport XXXXX on the spot market which is used as XXXXX in its XXXXX.

          6. When necessary, the XXXXX enter the state of Utah for the purpose of acquiring and transporting the XXXXX to the XXXXX located in XXXXX.

          7. The Respondent assessed property taxes on those XXXXX maintaining that such XXXXX are not exempt from taxation under Utah Constitution, Article XIII '2 (2)(b).

                            CONCLUSIONS_OF LAW

          The property of counties, cities, towns, special districts, and all other political subdivisions of the state, except that to the extent and in the manner provided by the Legislature the property of a county, city, town, special district or other political subdivision of the state located outside of its geographic boundaries as defined by law may be subject to the ad valorem property tax, are exempt from property tax.  (Utah Constitution Article XIII ' 2(2(b).)

                            DECISION AND ORDER

          In the present case, the issue to be determined by the Commission is whether or not property owned by a municipality located outside the state of Utah, but otherwise situated within Utah for the purpose of property tax assessment is exempt under Article XIII '2 of the Utah Constitution.

          The relevant provision of Article XIII states:

          "(2) The following are property tax

          exemptions: . . . (b) the property of

          counties, cities, towns, special districts,

          and all other political subdivisions of the

          state . . ." (Emphasis added.)

          By its terms, the constitution appears to be referring to only those municipalities and political subdivisions of the state of Utah, and thus, it is only those political subdivisions which are entitled to a property tax exemption.  This interpretation is further supported by those cases cited by the Respondent in its brief.

          The Petitioner argues that the privileges and immunities clause of Article IV, '2 of the United States Constitution as applied to the states through the Fourteenth Amendment of the United States Constitution, prohibits the state of Utah from treating Utah municipalities, for tax purposes, differently than it treats the Petitioner and other like situated municipalities.

          The issue is not whether or not the Petitioner, as a municipality, must be treated in the same manner for tax purposes as those municipalities located within Utah.  The issue is whether or not the Petitioner maintains its identity as a sovereign municipality for tax purposes once outside of its geographic boundaries.  On that issue, it has been held in the numerous cases cited by the Respondent that a foreign state or municipality located in another state loses its sovereignty or public character once outside that state.  Thus, the constitutional article as applied does not violate the United States Constitution.

          Based upon the foregoing, the Tax Commission affirms the determination of the Respondent and finds that the XXXXX owned by the Petitioner which transport XXXXX from Utah to XXXXX are subject to property tax.  It is so ordered.

          DATED this 12 day of September, l990.


R.H. Hansen                       Roger O. Tew

Chairman                          Commissioner


Joe B. Pacheco                    G. Blaine Davis

Commissioner                      Commissioner


NOTICE: You have twenty (20) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review.  Utah Code Ann. ''63‑46b‑13(1), 63‑46b‑14(2)(a).