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. 90-1449
: Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for final decision on XXXXX
after both Petitioner and Respondent waived the opportunity for a formal
hearing and agreed to have the case decided on the pleadings and file contents.
Based
upon the pleadings and file contents, the Tax Commission makes its:
FINDINGS OF FACT
1. The tax in question is sales and use tax.
2. The period in question is XXXXX through
XXXXX.
3. Petitioner is a corporation operating out of
XXXXX, Utah, its principal place of business.
4. XXXXX is a XXXXX corporation doing business
in XXXXX.
5. In XXXXX, Petitioner bought four vehicles in
Utah from two dealerships.
6. On each occasion, Petitioner signed
nonresident affidavits, stating that it was a resident of XXXXX with an XXXXX
post office box number.
7. Petitioner claims that it purchased the
vehicles on behalf of XXXXX, acting in an agency capacity only.
8. Upon purchase, the four vehicles were taken
to XXXXX and subsequently registered there.
A copy of one of the XXXXX registrations shows that Petitioner is the
owner.
9. The total amount of tax owing on the
combined total sales of the four vehicles is $$$$$. A XXXXX penalty in the amount of $$$$$ for intentional disregard
of the law or rule was assessed.
Interest in the amount of $$$$$ was also assessed.
CONCLUSIONS OF LAW
"Any
person qualifying as a resident, who operates a vehicle, or allows the
operation of vehicle, in this state, must register it immediately." (Utah
Administrative Rule R873-22l-M(lB).)
A
resident for the purpose of motor vehicle registration includes "any
individual, firm, partnership, joint venture, association, corporation, ... or
any group or combination, acting as a unit" who engages in a trade,
profession, or occupation ... in this state.
(Utah Administrative Rule R873-22l-M(lB)(14).) A resident is also any person who owns, leases, or rents a place
of business or occupies or permits to be occupied a place of business within
this state. (Utah Administrative Rule
R873-22l-M(lB)(13).)
"Sales
of vehicles of a type required to be registered under the motor vehicle laws of
this state which are made to bona fide nonresidents of this state and are not afterwards
registered or used in this state except as necessary to transport them to the
borders of this state" are exempt from sales tax. (Utah Code Ann. §59-12-104(9).)
DECISION AND ORDER
In
the present case, the issue to be decided by the Commission is whether or not
Petitioner was a bona fide nonresident of this state within the meaning of Utah
Code Ann. §59-12-104(9), and as defined by Utah Administrative Rule
R873-22l-M. Under Rule
R873-22l-M(lB)(13), the term "resident" includes any person who owns,
leases, or rents a place of business or occupies a place of business within the
state.
In
the present case, it is undisputed that Petitioner operated and occupied a
place of business within the state of Utah, and did so at the time of the
purchase of the vehicles in question.
Therefore, by the express terms of the rule, Petitioner is considered to
be a resident of Utah for purposes of determining the applicability of the
sales tax exemption.
The
Tax Commission, therefore, finds that Petitioner was not a bona fide
nonresident of Utah for purposes of the sales tax exemption on the purchases of
the vehicles in question and is liable for the payment of the sales tax due.
The
Commission turns to the issue of whether or not the imposition of the penalty
is appropriate.
Under
the facts of the present case, the Tax Commission finds that Petitioner was
aware that it was a resident of the state of Utah when it signed the
nonresident affidavit giving an XXXXX address.
It is inconsistent for Petitioner to allege it was buying the vehicles
for a third party and to then find Petitioner's name on the XXXXX registration
as the current owner. Therefore, the Tax Commission finds the penalty imposed
is appropriate.
Based
upon the foregoing, the Tax Commission affirms the determination of the
Auditing Division in its assessment of the sales tax deficiency, penalties and
interest against Petitioner. It is so
ordered.
DATED
this 22nd day of January, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner