91-1482 - Income





Petitioners, : CONCLUSIONS OF LAW,


v. :



: Account No. XXXXX

Respondent. :



This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Lisa L. Olpin, Administrative Law Judge, heard the matter on behalf of the Commission. XXXXX, Petitioner's accountant, appeared on behalf of Petitioner. XXXXX, Assistant Utah Attorney General, appeared on behalf of Respondent.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:


1. The tax in question is individual income tax.

2. The period in question is the year XXXXX.

3. Petitioners filed their XXXXX married filing joint federal return from a Utah address.

4. On that return, Petitioners claimed that XXXXX income earned in XXXXX through employment with XXXXX in the amount of $$$$$ was not taxable to Utah.

5. The Auditing Division contends that XXXXX XXXXX income is taxable to Utah. Petitioners were assessed a 10% negligence penalty in addition to the income tax and interest.

6. XXXXX worked exclusively in XXXXX in XXXXX.

7. XXXXX has a valid Utah driver's license that was issued XXXXX with an expiration date of XXXXX.

8. XXXXX had one vehicle registered in Utah in XXXXX.

9. Petitioners have two children claimed as dependents on their XXXXX return who appear to be school age and attending school in XXXXX.

10. XXXXX XXXXX W-2 form from XXXXX was issued to a XXXXX, Utah address.

11. XXXXX has used a XXXXX, Utah address for several years in filing his Utah individual income tax returns, including XXXXX.

12. XXXXX XXXXX W-2 form from XXXXX included $$$$$ in subsistence allowance.

13. XXXXX paid property taxes on his home in XXXXX in XXXXX as verified with the XXXXX Assessor's Office.

14. XXXXX provided over XXXXX of the support of his family in XXXXX as evidenced in his return.

15. XXXXX maintains a permanent place of abode in Utah and visited his family on some weekends and holidays in XXXXX.

16. XXXXX was in Utah less than 60 days in XXXXX.

17. XXXXX, an accountant, advised Petitioner to exclude XXXXX income earned in XXXXX from Utah income tax.

17. XXXXX claimed that the XXXXX Utah State Tax Commission's Booklet L containing individual income tax forms and instructions is ambiguous in its definition of the term resident. At the very least, XXXXX claims that the Tax Commission should waive the negligence penalty.


Utah imposes an individual income tax on "resident individuals" pursuant to Utah Code Ann. 59-10-103, which provides:

(j) "Resident individual" means:

(i) an individual who is domiciled in this state for any period of time during the taxable year, but only for the duration of such period; or

(ii) an individual who is not domiciled in this state but maintains a permanent place of abode in this state and spends n the aggregate XXXXX or more days of the taxable year in this state.

The Commission has promulgated Administrative RuleR865-9I-2(D), which provides:

"Domicile" means the place where an individual has a true, fixed, permanent home and principal establishment, and to which place he has (whenever he is absent) the intention of returning. It is the place in which a person has voluntarily fixed the habitation of himself and family, not for a mere special or temporary purpose, but with the present intention of making a permanent home. After domicile has been established, two things are necessary to create a new domicile: first, an abandonment of the old domicile; and second, the intention and establishment of a new domicile. The mere intention to abandon a domicile once established is not of itself sufficient to create a new domicile; for before a person can be said to have changed his domicile, a new domicile must be shown.

The XXXXX Booklet L, previously referred to, states:

A Utah resident is an individual who:

a. is domiciled for the entire year in Utah, or,

b. even though temporarily domiciled outside Utah, maintains a permanent place of abode within the state and spends a total of 183 days or more of the taxable year within Utah.


The Tax Commission finds that the definitions of resident and domicile found both in the Utah Code and Booklet L are not ambiguous or contrary to one another.

In the present case, Petitioner summarily concluded that XXXXX was not domiciled for the entire year in Utah and moved on to the next clause pertaining to temporary domicile.

Upon a reading of the definition of domicile, Petitioners should have realized that XXXXX was in fact domiciled in Utah even though he worked in XXXXX. Utah is the place where XXXXX has a "true, fixed permanent home and principal establishment, and to which place he has, whenever he is absent, the intention of returning."

As to the negligence penalty, Petitioner acted in reliance on the accountant's advice in this matter.

Based upon the foregoing, the Tax Commission finds that XXXXX income earned in XXXXX during the year XXXXX is taxable to Utah. The penalty is waived. Interest remains as assessed. It is so ordered.

DATED this 20th day of August, 1992.


R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner