BEFORE THE UTAH STATE TAX COMMISSION
) FINDINGS OF FACT,
v. ) CONCLUSIONS OF LAW
) AND FINAL DECISION
AUDITING DIVISION OF THE )
UTAH STATE TAX COMMISSION, ) Appeal No. 89-0505
) Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission pursuant to the Utah Administrative Procedures Act for a formal hearing on XXXXX before Joseph G. Linford, Presiding Officer. The Petitioner was represented by XXXXX. Respondent was represented by XXXXX, Assistant Utah Attorney General, and by XXXXX of the Auditing Division of the Utah State Tax Commission.
After reviewing the evidence and arguments of the parties in the record and the recommendation of the presiding officer, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is sales and use tax.
2. The period in question is XXXXX.
3. During the period in question Petitioner purchased a truck in Utah that Petitioner intended to use exclusively in California as a sales vehicle. Petitioner buys all of its vehicles in Utah as a matter of course.
4. After buying the vehicle in question, Petitioner discovered that under California law it could not be registered in California if it was not purchased in California until it had 7,500 miles on the odometer. Therefore, Petitioner felt that it had to register the vehicle in Utah until it could be registered in California.
5. The vehicle in question has never been in Utah since it was purchased. When it was purchased, Petitioner used its resale exemption number so that no tax was paid at that time. Petitioner did not fill out an exemption certificate.
6. Petitioner has since paid taxes for the vehicle in California.
7. Petitioner is a Utah corporation with its principle place of business in Utah, although it does do some business in the state of California.
CONCLUSIONS OF LAW
1. Utah Code Ann. §59-12-104(9) provides that an exemption will apply to sales of vehicles to bona fide nonresidents of Utah which vehicles are not thereafter registered or used in the state except as required to transport them to the borders of the state.
2. Utah Code Ann. §§59-1-401 and59-1-402 provide that penalties and interest shall be imposed for the late payment of sales tax. No penalty was assessed in this case, but interest which Petitioner is requesting to be waived has been assessed.
3. Utah Code Ann. §59-1-401(8) provides that the Tax Commission may upon reasonable cause shown waive or reduce penalties and interest assessed under the above statutes.
4. Such reasonable cause has not been shown in this case. Although it is evident that Petitioner acted in good faith without any intent to deprive the State of taxes due, the State was nevertheless deprived of the use of the tax funds in question between the time that they should have been paid and the time that they were paid. The State should be compensated for that loss of use. Petitioner's good faith has already apparently been taken into account by the Auditing Division's decision not to assess a penalty in this case, but only interest.
5. It is also apparent under the above statutes that the Petitioner does not qualify as a nonresident of the state of Utah, and it also purchased the vehicle in Utah even though the vehicle was to be used outside of the state. These factors render the vehicle taxable in Utah regardless of where it is to be used.
6. Usually a taxpayer in Petitioner's situation should be able to obtain from a state to which it has erroneously paid use tax a refund when the Petitioner has paid sales tax in the state where the transaction occurred. Such a refund should be available to Petitioner in this case; however, to obtain such a refund Petitioner must pursue the matter with California authorities and that decision will be theirs to make.
DECISION AND ORDER
Based upon the foregoing, it is the decision and order of the Utah State Tax Commission that Petitioner's request for relief from payment of the sales tax and of the interest be denied.
DATED this 26th day of April, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis