BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX, )
:
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. ) AND FINAL DECISION
:
AUDITING
DIVISION OF THE ) Appeal No. 90-0055
UTAH STATE TAX
COMMISSION, :
)
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 in behalf of the Commission. Present and representing the Petitioner were
XXXXX, President, and XXXXX, Treasurer. Present and representing the Respondent was XXXXX, Assistant Utah
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 and use tax.
2.
Petitioner seeks relief from liability for sales and use tax pursuant to Utah
Code Ann. §59-12-104(8), which provides an exemption from such taxes for sales
made to or by charitable institutions in the conduct of their regular
charitable functions and activities.
3.
The Petitioner was organized during XXXXX.
Its Articles of Incorporation included the following statement of
purposes:
The
Corporation is formed as a non-profit corporation exclusively for educational
and charitable purposes relating to women including, but not limited to, the
following:
A.
To educate women about common problems facing women and the family society.
B.
To help women become informed on issues regarding government, social problems,
rights, privileges, and responsibilities, as they relate to individual citizens
at all levels of society.
C.
To assist women in becoming involved with seeking solutions to problems as they
apply to themselves and to the family, inasmuch as the family is the
fundamental building block of a healthy society.
D.
To conduct or sponsor seminars, workshops, meetings, lectures, conferences,
conventions and other activities.
E.
To share and exchange information gathered through studies of these problems
and issues by publishing and distributing information to its members and to any
others who may request it.
F.
To encourage citizens everywhere to be law-abiding and eager to maintain our
constitutional form of government.
G.
To engage in any and all lawful activities and for such charitable or
educational purposes as from time to time determined by the Board of Directors
and as allowed by the Utah Non-profit Corporation and Cooperative Association
Act as presently enacted or hereafter amended and which are not proscribed by
Section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding
provisions of any future United States Internal Revenue law).
4.
Since its incorporation, the Petitioner has published a newsletter entitled
"XXXXX" focusing on various family oriented issues. The organization has also published studies
of social issues and has undertaken other family related projects, such as the
financing and distribution of a video tape on the subject of teenage pregnancy.
5.
All officers and agents of the Petitioner serve as volunteers without
compensation. Most of the Petitioner's
income comes from donations and dues.
Conference fees, publication sales and fund raising generate minimal
additional income.
6.
The Petitioner's income is primarily expended on the organization's newsletter
and other publications. A substantial
portion of its income is utilized in maintaining an office. The Petitioner maintained an operating
reserve of slightly more than XXXXX as of XXXXX.
7.
The Petitioner has been recognized as a "publicly supported organization"
by the Internal Revenue Service. As
such, donations to the organization are deductible from donors' taxable
income. Salt Lake County has also
exempted Petitioner from property tax as a charitable organization.
CONCLUSIONS OF LAW
Utah
Code Ann. §59-12-104 exempts from sales and use taxes sales made to or by
religious or charitable institutions in the conduct of their regular religious
or charitable functions and activities.
DECISION AND ORDER
Because
charitable institutions are exempt from sales and use tax, the issue in this
case is whether the Petitioner is a "charitable"' organization. The
Utah Sales and Use Tax Act does not define "charitable institution"
nor is the term defined by rule.
However, in Youth Tennis Foundation v. Tax Commission, 554 P.2d 220
(Utah 1976) the Utah Supreme Court provided the following definition of
charity:
Charity
in the broad sense is the giving of something of benefit to others without
expectation of gain. Considering it in
more direct focus in this case, it means providing something for the public
welfare, which includes not only material, educational and cultural, but also
extends to physical and recreational needs.
Petitioner's
activities fall within the limits of the Court's definition of charity. Furthermore, the Internal Revenue Service
has recognized Petitioner's status as a charitable organization for purposes of
receiving tax deductible contributions.
Based
on the foregoing, the Tax Commission concludes that Petitioner is a charitable
organization within the meaning of Utah Code Ann. §59-12-104(8) and is therefore entitled to exemption from Utah
sales and use tax. However, the
Commission's determination in this matter is based upon facts as presented
during the hearing and is subject to review and modification based upon any
change of those facts. It is so
ordered.
DATED
this 18th day of December, 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