BEFORE THE UTAH STATE TAX COMMISSION
: FINDINGS OF FACT,
Petitioners, : CONCLUSIONS OF LAW,
: AND FINAL DECISION
AUDITING DIVISION OF THE : Appeal No. 91-1546
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. Lisa L. Olpin, Administrative Law Judge, presided. 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 and XXXXX in the amount of $$$$$ was not taxable to Utah.
5. The Auditing Division contends that XXXXX XXXXX income is taxable to Utah. Petitioners were assessed a 10% negligence penalty in addition to the income tax and interest.
6. XXXXX worked mostly in XXXXX in XXXXX.
7. XXXXX rented lodging in XXXXX, XXXXX from XXXXX through XXXXX.
8. XXXXX filed a married filing joint return with his wife from a Utah address for several years prior to XXXXX claiming Utah as his residence and paying Utah taxes on all income earned.
9. XXXXX has a valid Utah driver's license that was issued XXXXX with an expiration date of XXXXX.
10. XXXXX had XXXXX vehicles registered in Utah during XXXXX.
11. XXXXX has XXXXX claimed as dependents on his XXXXX return who appear to be school age and attending school in XXXXX.
12. Petitioner's XXXXX W-2 forms issued from XXXXX and XXXXX were sent to Petitioner's XXXXX, Utah address.
13. Petitioner's XXXXX W-2 from XXXXX had $$$$$ withheld in Utah income tax.
14. Petitioner was registered to vote in XXXXX in XXXXX.
15. Petitioner paid property taxes on his home in XXXXX in XXXXX as verified with the XXXXX Assessor's office.
16. As shown in Petitioner's XXXXX Utah individual income tax return, Petitioner provided over XXXXX percent of the support for his family.
17. Petitioner maintains a permanent place of abode in Utah and visited his family on some weekends and holidays.
18. XXXXX was in Utah less than XXXXX days in XXXXX.
19. XXXXX, an accountant, advised Petitioner to exclude XXXXX income earned in XXXXX from Utah income tax.
20. 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, Petitioner should have realized that XXXXX was in fact domiciled in Utah even though he worked in XXXXX and rented lodging there. 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 20 day of August, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes