BEFORE THE UTAH STATE TAX COMMISSION
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
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.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis