BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioner, : FINDINGS OF FACT
v. : CONCLUSIONS OF LAW
: FINAL
DECISION
: Appeal No.
88-1679
AUDITING
DIVISION OF THE :
STATE TAX
COMMISSION OF UTAH, )
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission pursuant to the Rules of
Administrative Procedure in the Administrative Procedures Act for formal
adjudicative proceedings on the XXXXX.
That date was the date set for a prehearing conference in this matter
but the hearing officer with the acquiescence of the parties changed that
prehearing conference into a formal hearing.
Joseph G. Linford, Presiding Officer, was the hearing officer who heard the
matter. The Petitioner was represented
by XXXXX, Vice President of XXXXX. The
Respondent was represented by XXXXX, assistant Attorney General for the State
of Utah, and by XXXXX from the Auditing Division of the Utah State Tax
Commission.
Based
upon the recommendation of the Presiding Officer and upon the facts and
evidence in the file and presented at the hearing, the Tax Commission hereby
makes its:
FINDINGS OF FACT
1. The tax in question is sales tax.
2. The period in question is XXXXX.
3. The Petitioner purchased, tax exempt, a
XXXXX boat on XXXXX from XXXXX. This
purchase was affected by trading a XXXXX boat which the Petitioner owned plus
an additional $$$$$ in exchange for the XXXXX boat. The boat was purchased at the time by the Petitioner with the
intent to use the boat for personal use as well as to eventually resell the
boat at a later date.
4. The boat then sat on the Petitioner's used
XXXXX lot for a period of XXXXX years on display without any advertising during
that time being undertaken by the Petitioner in an effort to sell the boat.
5. The boat was always on display in the
Petitioner's used XXXXX lot except in the winter and except when the Petitioner
was using the boat for personal use. It
was also off the lot at certain times when it was being serviced or repaired.
6. The boat was registered in the Petitioner's
name.
7. The Petitioner's use of the boat was limited
to a total of XXXXX hours as registered on the boat's hour meter which
registers the amount of time during which the engine is in operation or when
the key is turned on.
8. The Petitioner owned the boat for a period
of approximately XXXXX years. During
the XXXXX year, the Petitioner did advertise for the sale of the boat beginning
in the later part of XXXXX.
9. The boat eventually sold after advertising
had ceased in XXXXX to XXXXX for a purchase price of $$$$$.
CONCLUSIONS OF LAW
1. Utah Code Ann. §59-12-104(28) (1987
Replacement, 1989 Supp.) provides that property purchased for resale in the
state in the regular course of business shall be exempt from the sales tax.
2. Under the above statute, only property
purchased for resale is exempt, not property purchased for personal use.
3. The statute therefore does not allow a
transaction to be exempt from the sales tax when the transaction is effected
both for the purpose of reselling the property concerned and for the personal
use of that property by the buyer.
Thus, even if the property is purchased for the purpose of resale, if it
is also purchased for the purpose of personal use, the sale is not exempt from
the sales tax.
DECISION AND ORDER
The
Tax Commission hereby finds that since the boat involved in this case was
purchased for and was used in personal use as well as for resale at a later
date, the transaction in question is not exempt from the sales tax. The Statutory Notice of Deficiency dated
XXXXX is sustained and the Petitioner's request is denied.
Dated
this 1 day of September, 1989.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner