BEFORE THE UTAH STATE TAX COMMISSION
: 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
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.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes