BEFORE THE UTAH STATE TAX
COMMISSION
________________________________
XXXXX :
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
AUDITING
DIVISION OF THE : Appeal No. 91-1371
UTAH STATE TAX COMMISSION, :
: Tax Type:
Sales & Use
Respondent. :
________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a prehearing conference on
XXXXX. With the consent of both parties
the prehearing conference was converted to a formal hearing. Paul F. Iwasaki, Presiding Officer, heard
the matter for and in 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 period in question is XXXXX.
3. The Petitioner is a resident of the State of
Utah. On the date in question, the
Petitioner resided in a home in XXXXX and was working at XXXXX where he
continues to work.
4. On XXXXX, the Petitioner purchased a XXXXX
from XXXXX located in XXXXX Utah. The
Petitioner told the dealership that the car was being purchased for use by his
ex-wife who lived in XXXXX and that the car would be titled and registered
there.
5. The Petitioner completed a non-resident
affidavit form listing himself and his ex-wife as the purchasers of the vehicle
and listed her address as their address.
6. The Petitioner testified that he was listed
as a co-owner of the vehicle because his ex-wife had not established sufficient
credit of her own with which to purchase the vehicle. He further testified that his ex-wife has been responsible for
making all payments on the vehicle. He
further testified that approximately two months after the purchase of the
vehicle, his exwife picked up the car and took it to XXXXX where she registered
it.
7. The Petitioner testified that it was his
belief that because the vehicle was being purchased for his ex-wife and because
it was to be registered in the state of XXXXX, that it qualified as a tax
exempt sale.
8. The Petitioner testified that he believed the
title of the vehicle to be in both his and his ex-wife's name.
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 R873-22l-M(lB)).
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 nonresident of the state within the meaning of
Utah Code Ann. §59-12104(9) and as defined by Utah State Tax Commission
Administrative Rule R873-22M-1. In
determining the requirements of a "bona fide non-resident" one must
look to the Utah State Tax Commission Administrative Rule R873-22l-M(lB) which
defines "resident" for motor vehicle registration and non-resident
status purposes. There 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....
Applying
the statute and rule to the present case, it is undisputed that the Petitioner
was living within the State of Utah and owned a residence within the State of
Utah on the date in question.
Therefore, by the express terms of the rule, he is to be considered a
resident of Utah for 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 purchase of
the vehicle in question and is liable for payment and sales tax due. The fact
that the vehicle was subsequently moved outside of the state of Utah and
registered outside of the state of Utah does not affect the outcome of this
decision.
Having
so decided, the Commission turns to the issue of whether or not the Petitioner
acted with the intent to evade the tax, thus requiring the imposition of a 50%
penalty.
Based
upon the testimony and evidence presented at the hearing, the Tax Commission
finds that the while these circumstances do not establish an intent on the part
of the Petitioner to evade the tax due, such facts do show that the Petitioner
acted negligently in signing the non-resident affidavit without carefully
reading the contents of that affidavit.
Had he done so, the Petitioner would have been put on notice that he did
not qualify for the exemption.
Therefore, the Tax Commission finds that a penalty in the amount of 10%
is appropriate.
Based
upon the foregoing, the Tax Commission affirms the Auditing Division's
assessment of a sales tax deficiency in the amount of $$$$$ however, modifies
the amount of penalty to be imposed to an amount of 10%. It is so ordered.
DATED
this 25th day of February, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner