BEFORE THE UTAH STATE TAX
COMMISSION
______________________________
XXXXX : FINDINGS OF FACT,
Petitioners, : CONCLUSIONS OF LAW,
: AND FINAL
DECISION
v. :
AUDITING
DIVISION OF THE : Appeal No. 91-1482
UTAH STATE TAX COMMISSION, :
: Account
No. XXXXX
Respondent. :
_______________________________
STATEMENT OF CASE
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:
FINDINGS OF FACT
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.
CONCLUSIONS OF LAW
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.
DECISION AND ORDER
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.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner