92-1251 - Sales



XXXXX                                                                                  )


            Petitioner,                                                         )           FINDINGS OF FACT,

                                                                                    :           CONCLUSIONS OF LAW,

v.                                                                                 )           AND FINAL DECISION


AUDITING DIVISION OF THE                                )           Appeal No. 92-1251

UTAH STATE TAX COMMISSION,                        :

                                                                                    )           Account No. XXXXX




            This matter came before the Utah State Tax Commission for a formal hearing on XXXXX.  Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf of the Commission.  Present and representing the Petitioner was XXXXX.  Present and representing the Respondent was Susan Barnum, Assistant Attorney General.

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


            1.  The tax in question is sales tax.

            2.  The period in question is XXXXX.

            3.  The Petitioner is a wholly owned subsidiary of XXXXX which, in turn, is a wholly owned subsidiary of XXXXX.

            4.  XXXXX is a XXXXX corporation which also has an administrative office in XXXXX, Utah.  XXXXX, Inc. is a XXXXX corporation.  XXXXX, Inc. is an XXXXX corporation and has no offices in Utah.

            5.  On XXXXX, an individual, who during the winter months is an employee of XXXXX and in the summer months an employee of XXXXX, purchased a XXXXX truck from XXXXX, XXXXX, XXXXX located in XXXXX, Utah.  The purchase price was $$$$$.
            No sales tax was paid or collected because the sale was treated as a sale to a bona fide non-resident.

            6.  On the Motor Vehicle Contract of Sale, the purchaser is listed as XXXXX.  On the Non-Resident Affidavit form the purchaser is also listed as XXXXX.

            7.  Payment for the vehicle was made by a check drawn on the account of XXXXX.  The check also states that the purchase was on behalf of XXXXX.

            8.  The Petitioner's witness testified that the purchase of the vehicle was made by XXXXX for use by XXXXX in XXXXX.  He further testified that the vehicle was immediately transported to XXXXX where it was titled and registered in the name of XXXXX.

            9.  The Petitioner's witness testified that XXXXX is the funding entity for XXXXX and XXXXX thus explaining the method of payment of the motor vehicle.

            10.  As a result of the above described transaction, the Auditing Division determined that the vehicle was not exempt from the imposition of sales tax and assessed a sales tax deficiency in the amount of $$$$$, penalty in the amount of $$$$$, and interest applied at the statutorily prescribe rate.


            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)).


            In the present case, the Tax Commission finds that, notwithstanding the method of payment of the truck in question and under the facts and circumstances of this case, the sale of the truck was made to XXXXX which is an XXXXX corporation with no place of business within the state of Utah.

            Based upon the foregoing, it is the order of the Utah State Tax Commission that the determination of the Auditing Division is reversed.  It is so ordered.

            DATED this 30th day of June, 1993.


R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco                                                            S. Blaine Willes

Commissioner   Commissioner