BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioners : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
AUDITING
DIVISION OF THE : Appeal No. 89-1379
UTAH STATE TAX COMMISSION :
: Account
Nos. XXXXX
Respondent : and XXXXX
_____________________________________
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 Petitioners was
XXXXX. Present and representing the
Respondent was XXXXX, Assistant Utah Attorney General.
Based
upon the testimony and evidence presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1.
The tax in question is income tax.
2.
The period in question is XXXXX.
3.
During XXXXX, Petitioner XXXXX retired from federal employment in Florida. She and her husband moved from Florida and
established residency in Utah in XXXXX.
Florida imposes no state income tax.
4.
In connection with her retirement, XXXXX elected a pension option referred to
as an "alternative annuity with lump sum payment." Pursuant to this election, she received a
lump sum payment of $$$$$ during XXXXX.
5.
The Petitioners filed a joint XXXXX federal income tax return on which they
reported $$$$$ in federal taxable income.
As required by federal income tax law, that sum included $$$$$ as the
taxable portion of XXXXX's lump sum payment.
6.
The Petitioners also filed a joint XXXXX Utah resident income tax return on
which they reported state taxable income of $$$$$.
7.
The Petitioners paid the state income tax liability established by their XXXXX
return, then filed a request for refund of the amount of tax attributable to
the lump sum payment received by XXXXX.
CONCLUSIONS OF LAW
Utah
Code Ann. §59-10-112 defines "state taxable income" as an
individual's federal taxable income after any modifications, subtractions, and
adjustments provided in §59-19-114.
Utah
Code Ann. §59-10-111 defines "federal taxable income" as taxable
income as currently defined in Section 63, Internal Revenue Code of 1986.
DECISION AND ORDER
For
purposes of determining Utah income tax liability, Utah Code Ann. §59-10-112
provides that an individual's state taxable income is the same as his federal
taxable income, with the modifications, subtractions, and adjustments set forth
in Utah Code Ann. §59-19-114. In this
case, the Petitioners concede that the lump sum payment in question was
properly included in their XXXXX federal taxable income. The only remaining issue is whether Utah
Code Ann. §59-19-114 excludes such lump sum payments from state taxable
income. The Petitioners have identified
no such exclusion.
The
Petitioners point out that if the lump sum payment had been paid more promptly,
so that it was received by Petitioners during XXXXX while they resided in
Florida, it would not have been subject to Utah income tax. Because Florida has no state income tax, it
would not have been subject to state income tax at all. However, the fact remains that the payment
was not made until XXXXX, after Petitioners had established residency in
Utah. The payment is therefore subject
to Utah income tax law.
As
the payment was properly included in Petitioner's federal taxable income and no
provision excludes it from state taxable income, the Tax Commission hereby
denies the Petitioners' request for refund of the Utah state income tax paid by
Petitioners arising from the lump sum distribution in question. It is so ordered.
DATED
this 27th day of November, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner