90-3206 - Sales








v. :




: Tax Type: Sales/Exemption

Respondent. :



This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Commissioner Joe B. Pacheco, Paul F. Iwasaki and Lisa L. Olpin, Hearing Officers, heard the matter for and in behalf of the Commission. Present and representing the Petitioner was attorney XXXXX. Present and representing the Respondent was XXXXX, Assistant Utah Attorney General.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:


1. Petitioner, a non-profit organization, is requesting sales tax exemption, claiming it is a charity institution.

2. Petitioner has been granted federal exemption under 501(c)(19) of the Internal Revenue Code. This code section grants tax exemption status to XXXXX organizations, including any XXXXX units.

3. Petitioner has reiterated its primary purpose on three separate occasions on three separate documents: a. Petitioner's Articles of Incorporation, which were filed on XXXXX, state in paragraph 3:

3. [The] [purpose of this corporation is to coordinate the activities of various XXXXX and XXXXX organizations all interested in the XXXXX of the XXXXX.

b. An unfiled, notarized document entitled "Articles of Amendments, Articles of Incorporation XXXXX", dated XXXXX changes paragraph 3 to read:

3. The purpose of this corporation is to coordinate the activities of various XXXXX and XXXXX organizations, which is to perpetuate the XXXXX of XXXXX and members of the XXXXX and to XXXXX their XXXXX and to promote programs for religious, charitable and educational purposes and to sponsor and participate in activities of a XXXXX nature.

c. On Petitioner's application for sales tax exemption, the specific purpose for the organization is:

[to proactively support and defend issues and activities that are valuable and beneficial to the XXXXX of the State of Utah and the XXXXX community.

4. Included in Petitioner's membership are a number of XXXXX-affiliated organizations.

5. Petitioner receives funds from member organizations and the public.

6. Currently, Petitioners' targeted goal is to help fund and cause the XXXXX to be completed.

7. The XXXXX is in charge of the development, maintenance, and operation of the XXXXX and XXXXX. It may receive contributions from XXXXX organizations to carry out its responsibilities. Utah Code Ann. 71-1-3.

8. Petitioner has supplied the XXXXX with sod and fencing.

9. A museum and other historical displays are planned for the park.

10. The XXXXX is restricted to the burial of XXXXX, members of the XXXXX and XXXXX and their spouses. Members of the XXXXX are buried at no cost, whereas spouses are charged a fee. To date 129 members of the XXXXX have been buried there.

11. Petitioner also runs a day care facility at the XXXXX.

12. Petitioner pays for the registering of lobbyists who, in turn, lobby on issues affecting XXXXX.

13. Petitioner does not have any operating expenses; its staff serves without compensation.

14. Paragraph 9 of the 1982 Articles of Incorporation states that upon dissolution of the corporation, all of the assets shall be disposed of to such "organization or organizations organized and operated exclusively for charitable, educational, religious, or scientific purposes."


"Sales made to or by religious or charitable institutions in the conduct of their regular religious or charitable functions and activities are entitled to sales and use tax exemption. (Utah Code Ann. 59-12-104(8) and Utah Administrative Procedures RuleR865-19S-43).

Charity has been judicially defined as follows:

The contribution or dedication of something of value ... to the common good, ...individual or group sacrifice for the welfare of the community.

Salt Lake County v. Tax Commission, 658 P.2d 1192, 1194 (Utah 1983), citing Salt Lake county v. Tax Commission Ex Rel. Greater Salt Lake Recreational Facilities, 596 P.2d 641 (Utah 1979).

Activities ... rendered for the general improvement and betterment of mankind which benefit the community as a whole or an unascertainable and indefinite portion thereof.

Salt Lake County v. Tax Commission, supra, at 1194, citing B.P.O.E. No. 85 v. Tax Commission, 536 P.2d 1214 (Utah 1975).

In Department of Revenue and Taxation v. Casper Legion Baseball Club, 767 P.2d 608, 611 (Wyo. 1989), the Wyoming Supreme Court cited Utah case law, specifically Youth Tennis Foundation v. Tax Commission, 554 P.2d 220 (Utah 1976), in determining that their Department of Taxation:

[s]hould focus on whether the charity primarily engages in activities providing an indefinite number of persons in the general public with benefits designed to aid them in an educational, moral, physical, or social manner. The Department should also consider whether the charity provides access to those benefits in an equal and nondiscriminatory way.

In deciding whether or not Petitioner should be classified and afforded the benefit of the exemption, it is appropriate to examine not only what it says, but more importantly, what it does. Youth Tennis Foundation v. Tax Commission, supra, at 222.

Further, "the fact that a person or entity is exempt from federal taxation under the Internal Revenue code is not determinative of a claim for an exemption under Utah law, though it may be a factor for consideration." XXXXX, supra, 598 P.2d at 1351.


In the current case before the Commission, Petitioner's stated purpose is to accomplish those activities that will benefit XXXXX of the State of Utah. To date, Petitioner has devoted its funds and efforts in support of the XXXXX and, to a lesser degree, a daycare center at the XXXXX.

The erection and maintenance of the XXXXX is a mandated goal of the State. The park benefits XXXXX as well as the community at large in that it provides a place of XXXXX and XXXXX for those who have XXXXX our XXXXX. There is tremendous educational and historical value to be had in the establishment and continuing maintenance of such a unique and XXXXX place.

In light of Petitioner's statements of purpose and in examining how the Petitioner's activities benefit society at large, the Tax Commission finds that Petitioner does qualify as a charity within the meaning of Utah Code Ann. 59-12-104(8), and therefore, is granted sales tax exemption status. It is so ordered.

DATED this 22 day of January, 1992.


R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner