BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX,
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
AUDITING
DIVISION OF THE : Appeal No. 90-1550
UTAH STATE TAX COMMISSION, :
: Account
No. XXXXX
:
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Paul F. Iwasaki, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was
XXXXX. Present and representing the
Respondent was XXXXX, Assistant 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 tax.
2. The period in question is XXXXX.
3. On XXXXX, the Petitioner purchased a XXXXX
Porsche automobile from XXXXX, XXXXX, Utah.
No sales tax was paid on that transaction because the Petitioner
represented herself to be a resident of XXXXX.
4. The Petitioner is a resident of XXXXX and
spends most of her time in that state.
5. In addition to owning a residence and
property in Oregon, the Petitioner also maintains residences in XXXXX, XXXXX,
and XXXXX.
6. In Utah, the Petitioner owns a condominium
in XXXXX, Utah, and owned that condominium on the date in question. The Petitioner resides in that condominium
when she is in Utah. Petitioner spends
approximately two months a year in Utah, however, is here only two or three
days at a time.
7. At the time the Petitioner purchased the
automobile in question, she signed a nonresident affidavit on the basis that
she considered herself to be a resident of XXXXX.
8. In addition to the sales tax deficiency
assessed, the Auditing Division also assessed a XXXXX penalty alleging that the
Petitioner intentionally disregarded the law in not paying the appropriate
sales tax.
CONCLUSIONS OF LAW
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
thereafter registered to use in this state except as necessary to transport
them to the borders of the state are exempt from sales tax. (Utah Code Ann. §59-12-104(9).)
Any
person qualifying as a resident, who operates a vehicle, or allows the
operation of a vehicle, in this state must register it immediately. For purposes of vehicle registration, the
term "resident" means,...
Any
person, except a tourist temporarily within the state, or a student, covered
under the rule R873-22M-4, who owns, leases, or rents a residence or a place of
business within the state, or occupies or permits to be occupied, a Utah
residence or a place of business. Utah
State Tax Commission Administrative Rule R873-22l-M(B)(3).
DECISION AND ORDER
In
the present case, the issue to be decided by the Commission is whether or not
the Petitioner was a bona fide resident of this state within the meaning of
Utah Code Ann. §59-12-104(9), and as defined by Utah State Tax Commission
Administrative Rule R873-22l-M.
Utah
Code Ann. §59-12-104(9), exempts from sales tax "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 thereafter
registered or used in this state except as necessary to transport them to the
borders of this state."
In
determining the requirements of a "bona fide resident," one must look
to Utah State Tax Commission Administrative Rule R873-22l-M(B), which defines
"resident" for motor vehicle registration and nonresident status
purposes. There, the term
"resident" means:...(3) any person...who owns, leases, or rents a
residence or place of business within the state or occupies or permits to be
occupied a Utah residence or place of business.
Applying
the statute and rules to the present case, it is undisputed that the Petitioner
owns a residence within Utah and occupies that residence while in the
state. Although the Petitioner also
maintains other residences in other states, for purposes of determining the
applicability of the sales tax exemption, the Petitioner is a Utah resident
under the applicable statute and rule.
The
Tax Commission, therefore, finds that the Petitioner was not a bona fide
nonresident of Utah for purposes of the sales tax exemption on the purchase of
the automobile in question and is liable for the payment of the sales tax due.
Turning
next to the issue of whether or not the imposition of the XXXXX penalty was
appropriate, the Tax Commission finds that under the facts as presented, the
Petitioner did not act with intentional disregard of the law or rule which
would justify the imposition of the XXXXX penalty. From the evidence presented, it is found that the Petitioner had
a good faith and reasonable belief that she was a resident of the state of
XXXXX and was not a resident for sales tax purposes of the state of Utah.
The
Tax Commission does find, however, that the Petitioner acted negligently in
signing the affidavit and representing that she had read both sides of the
affidavit and answered all of the sections to the best of her knowledge and
belief. Had the Petitioner carefully
read the reverse side of the affidavit, she would have been alerted to the fact
that the term "resident" includes a person who owns a residence
within the state of Utah.
Based
upon the foregoing, the Tax Commission affirms the determination of the
Auditing Division in its assessment of a sales tax deficiency against the
Petitioner; however, the Tax Commission further finds that the appropriate
penalty to be imposed is not the XXXXX penalty, but rather the appropriate
penalty is the XXXXX negligence penalty as provided for by Utah Code Ann.
§59-1-401(3)(a). It is so ordered.
DATED
this 15th day of January, 1991.
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