BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : FINDINGS OF FACT
v. : CONCLUSIONS OF LAW
: FINAL DECISION
: Appeal No. 88-1679
AUDITING DIVISION OF THE :
STATE TAX COMMISSION OF UTAH, )
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
Joe B. Pacheco G. Blaine Davis