BEFORE THE UTAH
STATE TAX COMMISSION
____________________________
XXXXX :
Petitioner : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW
v. : AND FINAL DECISION
:
AUDITING
DIVISION OF THE : Appeal No. 91-0596
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 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 date in question is XXXXX.
3. On XXXXX the Petitioner purchased a
Chevrolet three quarter ton pickup truck from XXXXX. No sales tax was paid on that transaction because the Petitioner
represented himself to be a resident of XXXXX.
4.
The Petitioner is a resident of XXXXX
having moved there upon his retirement on XXXXX.
5. Prior to his retirement, the Petitioner had
lived in Utah since XXXXX.
6. Since XXXXX, and to the current date, the
Petitioner has owned a home in XXXXX Utah.
That home had been occupied by the Petitioner and his wife. Since the Petitioner's retirement and
subsequent move to XXXXX however, the Petitioner's wife continued to live in
that home until XXXXX when Petitioner returned to Utah to pick up his wife and
move her to XXXXX.
7. The Petitioner's home in XXXXX, Utah has
remained vacant since XXXXX of XXXXX.
The Petitioner has made no attempts to sell the home and has no current
plans to do so.
8. At the time the Petitioner purchased the
vehicle in question, he signed a non-resident affidavit. It was not known by the Petitioner at the
time of the hearing whether or not that affidavit contained a reverse side
which would have recited the residency requirements under Utah State Tax
Commission Administrative Rules. The
photocopy of the affidavit submitted into evidence by the Respondent contained
no such recitation of the reverse side.
The Petitioner was assessed a sales tax deficiency in the amount of
$$$$$ and a 15% penalty in the amount of $$$$$ by the Auditing Division.
CONCLUSIONS OF LAW
Sales
of vehicles of a type required to be registered under the motor vehicle laws of
the state which are made to bona fide non-residents of the 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 the purposes of vehicle registration,
the term "resident" means, ...any person, except a tourist
temporarily within the state, or student, covered under the rule R873-22M-4,
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. (Utah State Tax Commission -
Administrative Rule R873-22- IM(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 non-resident of the state within the meaning of
Utah Code Ann. §59-12-104(9), and as defined by Utah State Tax Commission
Administrative Rule R873-22M-1.
Utah
Code Ann. §59-12-104(9), exempts from sales tax, sales of vehicles required to
be registered under the motor vehicle laws of the state which are made to bona
fide non-residents of this state...
In
determining the requirements of a "bona fide non-resident" one must
look to the Utah State Tax Commission Administrative Rule R873-22l-M(B) which
defines "resident" for motor vehicle registration and non-resident
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 rule to the present case, it is undisputed that the Petitioner
owns at least one residence within Utah, that being his former home in XXXXX,
Utah. Therefore, by the express terms
of the rule, he is to be considered a resident of Utah for the purposes of
determining the applicability of the sales tax exemption.
The
Tax Commission, therefore, finds that the Petitioner was not a bona fide
non-resident of Utah for purposes of the sales tax exemption on the motor
vehicle in question and is liable for the payment of the sales tax due.
The
Commission does not find however that the Petitioner is liable for the 15%
penalty imposed by the Auditing Division.
In order to sustain such a penalty, there must be a showing that the
Petitioner acted with the intentional disregard of a law or rule.
In
the present case, there was no showing that the Petitioner was made aware of
the Administrative Rule defining the term "resident". Indeed, even the copy of the affidavit
submitted into evidence by the Respondent did not contain such notice. Therefore, the Tax Commission finds that in
the present case, the imposition of the 15% penalty is not appropriate.
Based
upon the foregoing, the Tax Commission affirms the determination of the
Auditing Division to the extent that it establishes a sales tax liability for
the vehicle in question. The Commission
reverses the Auditing Division's determination to the extent that any penalty
was imposed on the sale in question. It
is so ordered.
DATED
this 19th day of December, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner