BEFORE THE UTAH STATE TAX COMMISSION
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
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
Joe B. Pacheco S. Blaine Willes