BEFORE THE UTAH STATE TAX COMMISSION
) FINDINGS OF FACT,
Petitioner ) CONCLUSION OF LAW,
) AND FINAL DECISION
) Appeal No. 91‑0018
AUDITING DIVISION OF THE )
UTAH STATE TAX COMMISSION ) Account No. XXXXX
Respondent ) Tax Type: Sales & Use
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, Esq. 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:
FINDINGS OF FACT
1. The tax in question is sales tax.
2. The audit periods in question are XXXXX through XXXXX and XXXXX through XXXXX.
3. The Petitioner operates a motorcycle dealership which sells motorcycles and off‑highway vehicles (ATV's).
4. During the audit periods in question, the Petitioner sold off‑highway vehicles (ATV's) to bona fide non‑residents of Utah. Sales tax from those sales was collected and remitted by the Petitioner.
5. Off‑Highway vehicles were, in this case, off‑road motorcycles also known as three and four wheel all terrain vehicles which were not equipped with the necessary items such as head lights, turn signals, or sufficient emission control systems which are required on vehicles which are licensed for on highway use.
6. With respect to the audit period XXXXX through XXXXX, the Petitioner partially paid the deficiency on XXXXX. The Petitioner made a request for refund of sales tax paid under that deficiency in XXXXX.
7. With respect to the sales tax paid on off‑highway vehicles sold during the period XXXXX through XXXXX, the Petitioner filed a Petition for Redetermination on XXXXX.
8. With respect to the audit period XXXXX through XXXXX, the Petitioner and the Tax Commission entered into an agreement whereby the Petitioner agreed to waive the statute of limitations for that period provided that the audit was performed and a determination of tax due be made within 120 days after the date of the agreement which was XXXXX.
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 bonafide non‑residents 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 are exempt from sales tax. (Utah Code Ann. '59‑12‑104(9)).
Off‑highway vehicles sold by a dealer to a person who is not a resident of this state are exempt from the registration requirements of the Motor Vehicle Act. (Utah Code Ann. '41‑229(3)).
A claim for credit or refund of any tax penalty or interest paid more than once or erroneously collected or computed must be filed with the Commission within three years from the date of the overpayment. (Utah Code Ann. '59‑12‑110).
DECISION AND ORDER
In the present case, there are two issues which are presented to the Commission for determination:
1. Are the sales of off‑highway vehicles made by the Petitioner to bona fide non‑residents of the state subject to sales tax?; and
2. If so, is the Petitioner barred from receiving a refund for the audit period XXXXX through XXXXX because of the statute of limitations having run?
Section 59‑12‑104(9) Utah Code Ann. specifically exempts sales of vehicles of the type required to be registered under the motor vehicle laws of the state which are made to bona fide non residents of the state. The determining factor as to whether or not the sale of a motor vehicle is exempt, is whether or not that vehicle is of a type required to be registered under the motor vehicle laws of the state. (It has been stipulated by the parties that the sales in question were made to bona fide non‑residents of this state).
The Respondent argued that the sales tax exemption for vehicles sold to non‑residents of the state applies only to those types of vehicles which are required to be registered in Utah. The Respondent further argued that because off‑highway vehicles sold to non‑residents of the state are not required to be registered in this state, the sale of such vehicles fall outside the exemption.
The Tax Commission disagrees with the Respondent's interpretation of '59‑12‑104(9) and finds such an interpretation to be inconsistent with the tax exempt treatment accorded to purchases of vehicles intended for use on highways made by bona fide nonresidents of this state. Such vehicles, under Utah Code Ann. '411‑19(1)(f), are also vehicles which are not required to be registered in Utah under the motor vehicle laws of this state. Therefore, if the Respondent's interpretation were to hold true, those vehicles would also fall outside the exemption which was specifically enacted for them.
The Tax Commission finds because off‑highway vehicles, in general, are vehicles of a type required to be registered under the motor vehicle laws of this state, they are, therefore, exempt from sales tax when purchased by bona fide non‑residents of this state. (Utah Code Ann. '41‑22‑3).
The Commission next turns to the issue of whether or not the Petitioner is barred from claiming a refund for sales tax paid on the deficiency assessed for the audit period XXXXX through XXXXX.
Under the facts presented in this case, it is clear that the Petitioner did not make a request for refund of sales tax paid under that deficiency until XXXXX. It is also clear that the request was made more than three years after the date the audit was completed and the deficiency assessed, and more than three years after the date the Petitioner partially paid that deficiency which was XXXXX. Utah Code Ann. '59‑12‑110(2) states: [i]f any tax, penalty, or interest has been paid more than once or has been erroneously collected or computed, the Commission shall credit it on any amounts then due from that person to the state . . .. No such credit or refund is allowed unless a claim is filed with the Commission within three years from the date of overpayment.
From the above, it is clear that the Petitioner has failed to file its claim for a refund within three years from the date of overpayment, and therefore, is barred from being credited or refunded those amounts paid or collected erroneously.
Based upon the foregoing, the Tax Commission finds that off‑highway vehicles sold to bona fide non‑residents of this state are exempt from sales tax. The Commission also finds that the Petitioner is barred from being refunded or credited for sales tax paid under the deficiency assessed for the audit period XXXXX through XXXXX. The Auditing Division is ordered to adjust its audits in accordance with this order. It is so ordered.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
DATED this 9th day of December, 1991.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes
NOTICE: You have twenty (20) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. ''63‑45b‑13(1), 63‑46b-14(2)(a).