BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioner, :
: FINDINGS
OF FACT,
v. : CONCLUSIONS OF LAW
: AND FINAL
DECISION
AUDITING DIVISION
OF THE :
UTAH STATE TAX COMMISSION, : Appeal
No. 90-0143
: Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. G. Blaine Davis, Administrative
Law Judge, Presiding Officer, heard the matter for and on behalf of the
Commission. Present and representing
the Petitioner was XXXXX. Present and
representing the Respondent were XXXXX, Assistant Attorney General, and XXXXX
of the Auditing Division.
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 income tax.
2.
The period in question is the XXXXX tax return of Petitioner.
3.
The Petitioner is a retiree from XXXXX, and for the year XXXXX he was an
annuitant, receiving payments from an annuity which was purchased for him when
XXXXX was acquired.
4.
The Petitioner presently receives Social Security, but did not receive Social
Security for the year XXXXX.
5.
The Petitioner originally filed his income tax return and paid tax on all of
income shown thereon.
6.
On XXXXX, Petitioner filed an amended return for the XXXXX year, and claimed an
exemption from state income tax for all of his annuity income on the grounds
that the legislature had exempted the retirement pay of state employees, and
therefore pursuant to the constitution he was entitled to be treated equally
with state employees, and also to be treated equally with federal employees in
accordance with the principals and standards set forth in Davis vs. Michigan,
49 U.S. 803, 103 L.Ed.2nd 891, 109 S.Ct. 1500. The amended return claimed a
refund based on the substantially reduced income.
7.
The Petitioner takes the position that although his case is not based directly
on Davis vs. Michigan, supra, the principals there are still applicable to his
circumstance, and that to not allow him an exemption for his retirement income
is unlawfully discriminatory against him.
Therefore, Petitioner asserts, the law exempting retirement pay of state
employees as passed by the legislature was discriminatory and illegal.
8.
Petitioner further asserts that, "Under the Erisa Law the United States
Congress specifies that discrimination under retirement is unlawful and
void."
9.
Petitioner also claims the Legislature had a conflict of interest in passing
the exemption for state employees because, in his opinion, the exemption
benefitted many legislators who may have been school teachers or other state employees.
10.
The Tax Commission sent to the Petitioner the amount of refund shown on his
amended XXXXX income tax return.
11.
At a later date, the Auditing Division reviewed his amended return and
disallowed the exemption from income for the retirement income. On XXXXX, Petitioner paid under protest the
assessment from the Auditing Division.
CONCLUSIONS OF LAW
State
law imposes an income tax on state taxable income which is interpreted to be
the federal taxable income, pursuant to sections59-10-111 and59-10-112, U.C.A.
Section 59-10-114, U.C.A., provides for a retirement income deduction.
The
deduction which Petitioner took on his amended return exceeded that deduction
which is allowed by the statute.
Petitioner is not legally permitted to file the return as he wishes the
statute existed, and the disallowance by the Auditing Division was correct.
DECISION AND ORDER
The
principals set forth in Davis vs. Michigan, supra, are not applicable to
private pensioners who did not receive their pensions from the United States
Government. The decision in that case
was limited to the specific facts set forth in the case. It was based upon the applicable federal
statute and not upon a constitutional provision. It, therefore, does not apply to Petitioner and his pension or
annuity income.
Further,
the Erisa law does not prohibit the different treatment of pension income which
has been argued by Petitioner. That law
does not have any impact on the way that states tax retirement income.
This
Commission is without jurisdiction to make a determination that the legislature
had a conflict of interest in passing the exemption for state employees, but
even if it had jurisdiction to make such a determination, there was no evidence
presented which would support such a determination.
Based
upon the foregoing, the Petition for Redetermination of the Petitioner is
hereby denied and the additional audit assessment imposed by the Auditing
Division is affirmed. It is so ordered.
DATED
this 6 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