BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
AUDITING DIVISION OF THE : Appeal No. 91-1369
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. Alan Hennebold. Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner by telephone 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 period in question is XXXXX.
3. Petitioner resides in XXXXX, Utah.
4. Petitioner's son, also named XXXXX, resides in XXXXX.
5. For reasons not material to this decision, Petitioner had an opportunity to purchase an XXXXX automobile in Utah at a substantial discount. Petitioner could not afford the car, but his son asked Petitioner to purchase it for him, with funds the son obtained from a loan in XXXXX. Petitioner traded in his own used car, purchased the new car, then immediately delivered it to his son in XXXXX. Petitioner's son registered the car in XXXXX and paid the applicable use tax there.
6. Petitioner returned to Utah with his son's used car, where he registered and paid use tax on the vehicle.
7. At the time Petitioner purchased the car in question, he completed a XXXXX, giving his son's address and other information, rather than his own. He provided his own social security number on the affidavit.
8. Petitioner believed that his purchase of the new car in Utah on behalf of his son was exempt from sales tax.
9. Upon discovery that Petitioner is a resident of Utah, Respondent assessed Petitioner with sales tax on the purchase price of the car in the amount of $$$$$ a penalty of 15% in the amount of $$$$$, and interest.
10. Petitioner filed a timely appeal of Respondent's assessment with the Commission.
CONCLUSIONS OF LAW
Utah Code Ann. §59-10-104(9) exempts from sales tax the purchase of vehicles by 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 residence within Utah.
DECISION AND ORDER
In this case, Petitioner is clearly a resident of Utah, while his son is just as clearly a resident of XXXXX. Consequently, if Petitioner was the purchaser of the vehicle in question, he must pay Utah sales tax on the net purchase price of the transaction. If Petitioner's son purchased the vehicle, no Utah tax is due.
In its review of the facts of this case, the Commission finds that the preponderance of the evidence shows Petitioner's son to have been the purchaser of the automobile. The transaction would not have occurred without the son's participation. The son provided the purchase money. The car was immediately transported to the son in XXXXX. The car was registered and taxed in XXXXX. Under such circumstances, the Commission concludes Petitioner served as his son's agent in purchasing the car, but was not himself the purchaser. Consequently, the purchase of the car in Utah was a tax exempt transaction.
Based upon the foregoing, the Commission grants Petitioner's Petition for Redetermination and sets aside Respondent's assessment of sales tax, penalty and interest in this matter. It is so ordered.
DATED this 28th day of October, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes