BEFORE THE UTAH STATE TAX
COMMISSION
_________________________________
XXXXX : FINDINGS OF FACT,
Petitioners, : CONCLUSIONS OF LAW,
: AND FINAL
DECISION
v. :
AUDITING
DIVISION OF THE : Appeal No. 91-1545
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
$$$$$ was not taxable to Utah.
5. The Auditing Division contends that XXXXX
income is taxable to Utah. Petitioners
were assessed a 10% negligence penalty in addition to the income tax and
interest.
6. XXXXX worked exclusively in XXXXX in XXXXX.
7. XXXXX has a valid Utah driver's license that
was issued XXXXX with an expiration date of XXXXX.
8. XXXXX had four vehicles registered in Utah
in XXXXX.
9. Petitioners have two children claimed as
dependents on their XXXXX return who appear to be school age and attending
school in XXXXX.
10. XXXXX XXXXX W-2 form from XXXXX was issued
to a XXXXX, Utah address.
11. XXXXX has used a XXXXX, Utah address for
several years in filing his Utah individual income tax returns, including
XXXXX.
12. XXXXX XXXXX W-2 form from XXXXX included
$$$$$ 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 90 percent 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 100 days in
XXXXX.
17. XXXXX, an accountant, advised Petitioner to
exclude XXXXX income earned in XXXXX from Utah income tax.
18. 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 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 in the aggregate 183 or more days of
the taxable year in this state.
The
Commission has promulgated Administrative Rule R865-9I-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, Petitioners 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, Petitioners 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 20 day of August, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner