BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
AUDITING DIVISION OF THE : Appeal No. 91-0919
UTAH STATE TAX COMMISSION :
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission based on stipulated facts submitted by the parties. Alan Hennebold, Administrative Law Judge, presided for and on behalf of the Commission.
Based upon the stipulated facts and the documentary record in this matter, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is sales tax, together with associated penalty and interest, arising from Petitioner's purchase of XXXXX in Utah.
2. The date in question is XXXXX.
3. The Petitioner is married to a XXXXX resident. However, she considers herself to be a resident of XXXXX. She was raised in XXXXX and her family continues to reside there. She and her husband own a residence in XXXXX, where she spends approximately XXXXX of her time. The remaining XXXXX of her time is spent in Utah. She also owns XXXXX and other XXXXX in XXXXX, where she is registered to vote, maintains a checking account and maintains vehicles registered in that state. The Petitioner is not employed in Utah. She does maintain another vehicle licensed, registered and located in Utah for her use while in Utah.
4. The Petitioner's husband is employed in Utah. As of the date in question, Petitioner's husband resided in a home in Utah that he owned with Petitioner. The home has now been sold. After its sale, Petitioner's husband resided in an XXXXX, then a XXXXX.
5. The Petitioner has previously maintained a Utah driver's license. She surrendered her Utah license sometime prior to XXXXX.
6. On XXXXX, Petitioner purchased a vehicle from an automobile dealership in XXXXX Utah, for $$$$$. The Petitioner intended to drive the vehicle back to XXXXX during XXXXX. She paid the applicable XXXXX use tax on the purchase of the vehicle to XXXXX. The vehicle has been virtually undriven since its purchase.
7. In connection with her purchase of the foregoing vehicle, the Petitioner completed and signed a "Non-Resident Affidavit" in which she stated she was a resident of XXXXX. She further stated that she had not been a resident of Utah or lived within Utah during the previous sixty days.
She did not complete the portion of the affidavit which requested a driver's license number. The affidavit did not contain the Commission's rules for determining resident status for sales tax purposes.
8. Based upon the foregoing Non-Resident Affidavit, no sales tax was collected from the Petitioner on the automobile purchase.
9. The Respondent, Audit Division, concluded that the foregoing transaction was subject to Utah sales tax because Petitioner was a resident of the State of Utah for sales tax purposes. It therefore assessed sales tax against Petitioner in the sum of $$$$$. It assessed a further penalty of 15% of the tax due, or $$$$$, on the grounds the Petitioner had executed her Non-Resident Affidavit in intentional disregard of Utah's Sales and Use Tax Act. It also assessed associated interest against Petitioner.
CONCLUSIONS OF LAW
Utah Code Section 59-12-104(9) exempts from sales tax the purchase of vehicles to bona fide non-residents of this state if such vehicles are not thereafter registered or used in Utah except as necessary to transport them out of Utah.
Rule R873-22l-M (Utah Administrative Code 1990-91) defines "resident" as, among other things, every person who owns, leases or rents a resident within Utah.
DECISION AND ORDER
In this case, the undisputed evidence establishes that the Petitioner has significant contacts with the State of Utah. She spends a substantial portion of her time in the state, was at the time in question a part owner of a residence in the state, and maintains an automobile in the state. She also possessed a Utah driver's license. The foregoing circumstances are sufficient under the provisions of Utah law and administrative rule set forth above to impose upon Petitioner the obligation to pay sales tax to Utah upon her purchase of the automobile in question. This is true even though Petitioner may consider herself a resident of XXXXX and have significant connections with that state. The Commission therefore affirms the Respondent's imposition of sales tax against Petitioner in this matter.
With respect to the imposition of penalty against Petitioner for her failure to pay sales tax, the Commission notes her reasonable belief that as a resident of XXXXX, she was not liable for Utah sales tax. The Commission also notes that the particular "Non-Resident Affidavit" which was presented to Petitioner when she purchased the vehicle in question did not contain the usual statement of the Commission's rules. Under such circumstances, the Commission concludes that good cause exists to waive the penalty which has been assessed against Petitioner. Interest is not waived, however.
In summary, the Tax Commission finds that the transaction in question is subject to Utah sales tax and therefore affirms the Respondent's assessment of sales tax in the amount of $$$$$. The Tax Commission finds reasonable cause to waive the penalty of $$$$$ previously imposed against Petitioner. Interest is not waived. It is so ordered.
DATED this 10th day of December, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes