BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioner, : FINDINGS OF FACT
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
:
AUDITING
DIVISION OF THE : Appeal No. 89-1254
UTAH STATE TAX COMMISSION, :
: Account
No. XXXXX
Respondent. :
____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Alan Hennebold, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was
XXXXX. Present and representing the
Respondent was XXXXX, Assistant Attorney General.
Based
upon the evidence and testimony 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 resides at XXXXX, Utah, where he is in business as a heating and
air conditioning contractor. He has
filed resident Utah income tax returns for the past several years. The Petitioner holds a valid Utah driver's
license.
4.
During the summer of XXXXX, Petitioner's neighbor, XXXXX, advised Petitioner he
could obtain XXXXX automobiles at favorable prices. The Petitioner agreed to purchase a vehicle from XXXXX. In exchange for the automobile, the
Petitioner installed $$$$$ worth of heating and air conditioning equipment in
XXXXX's residence and paid XXXXX $$$$$ by cash and check.
5.
By XXXXX, the Petitioner's automobile had not been delivered. The Petitioner pressured XXXXX to deliver
the car. XXXXX ultimately told the
Petitioner that the car could be picked up at XXXXX.
6.
The Petitioner went to XXXXX to take delivery of the vehicle. In doing so, he executed a non-resident
affidavit stating that he was a resident of XXXXX, Idaho, that he was retired,
had not been a resident of Utah within the past sixty days, and that he
possessed an Idaho driver's license. On
the basis of the non-resident affidavit, no sales tax was charged on the
transaction. In fact, the Petitioner
paid no money to XXXXX for the automobile.
The Petitioner contends he has no knowledge of any arrangement made
between Mr. XXXXX and XXXXX. The
purchase order signed by XXXXX, Petitioner's wife, indicates a purchase price
for the vehicle in question of $$$$$.
7.
The Petitioner ultimately obtained title to the automobile from Mr. XXXXX. He registered the vehicle in Idaho and paid
sales tax to that state on a purchase price of $$$$$. The Petitioner cannot explain the discrepancy between the
purchase price of $$$$$ reported to Idaho, the purchase price of $$$$$
testified to in these proceedings, and the purchase price of $$$$$ reported on
the purchase order.
8.
In reviewing the foregoing facts, Tax Commission staff assessed sales tax of
$$$$$ against Petitioner, based on the purchase price of $$$$$ indicated in the
XXXXX purchase order. Penalty computed
at 50% of the tax due, in the amount of $$$$$, was assessed against the
Petitioner on the grounds he had intentionally attempted to evade sales
tax. Associated interest was also
assessed against the Petitioner.
CONCLUSIONS OF LAW
Utah
Code Section 59-12-104(9) exempts from sales tax the purchase of vehicles to
bona fide non-residents of this state if such vehicles are not thereafter
registered or used in Utah except as necessary to transport them out of Utah.
Rule
R873-22M-1 (Utah Administrative Code 1990-91) defines "resident" as,
among other things, every person who is a legal resident of this state, every
person employed in the state, and every person declaring himself to be a
resident of the state.
DECISION AND ORDER
It
is clear from the record that Petitioner entered into a transaction to purchase
the vehicle in question with an individual of questionable honesty. In fact,
that individual's activities have resulted in his incarceration by federal
authorities. Nevertheless, the fact remains
that the Petitioner purchased the vehicle in question for his use in Utah, as a
resident of Utah. Utah sales tax was therefore due on the transaction.
There
is some dispute as to the amount of the purchase price of the vehicle. According to the Petitioner, the purchase
price was $$$$$. However, he has no
verification of that price. In fact, in
registering the automobile in Idaho, he reported a purchase price of $$$$$. The only written documentation of the
automobile's purchase price is the purchase order itself, at $$$$$. Based upon the Petitioner's inability to
establish a lower purchase price, his inconsistent statements regarding
purchase price, and the available documentary evidence, the Tax Commission
concludes that the Petitioner purchased the vehicle in question for $$$$$. The Tax Commission further concludes that
Commission staff properly assessed sales tax of $$$$$ and a 50% penalty of
$$$$$ against the Petitioner. The
determination of the Audit Division is therefore affirmed. It is so ordered.
DATED
this 5th day of September, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes*
Commissioner Commissioner