92-1457 - Sales

BEFORE THE UTAH STATE TAX COMMISSION

________________________________

XXXXX, )

Petitioner, : FINDINGS OF FACT,

) CONCLUSIONS OF LAW,

v. : AND FINAL DECISION

)

AUDITING DIVISION OF THE : Appeal No. 92-1457

UTAH STATE TAX COMMISSION, )

Respondent. : Account No. XXXXX

_________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission. Petitioner represented himself by telephone. Present and representing Respondent was XXXXX, Assistant Utah Attorney General.

Prior to the start of testimony, Petitioner objected to the involvement of an Administrative Law Judge who is employed by the State Tax Commission on grounds of impartiality. His objection was denied.

Petitioner also objected to Respondent's packet of exhibits timely submitted to the Tax Commission on XXXXX, because Petitioner did not receive his packet by mail until XXXXX. The hearing notice instructed the parties to submit any documents to be introduced into evidence by XXXXX. Petitioner, however, did not want to continue the case for any reason and did not claim an inability to adequately prepare for the formal hearing now at hand due to the late arrival of Respondent's documents. His objection was denied.

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 sales and use tax.

2. The date in question is XXXXX.

3. Petitioner purchased a XXXXX Chevrolet XXXXX from XXXXX Chevrolet on XXXXX. In so doing, Petitioner signed a non-resident affidavit, indicating he was a resident of Florida. The back of the non-resident affidavit listed the relevant Utah Administrative Rule (R873-OlV-1) defining "resident" for sales and use tax purposes. Petitioner also signed this second page.

4. The Auditing Division later determined Petitioner was a Utah resident pursuant to the rule and assessed Petitioner sales tax, a 15% intentional disregard of a law or rule penalty plus interest.

5. Petitioner claims he was a XXXXX resident at the time of the purchase.

6. Petitioner testified that in late XXXXX he relocated his family to XXXXX from Utah. His XXXXX state of Utah part-year resident income tax return shows he reported he was a Utah resident from XXXXX through XXXXX. Petitioner filed a nonresident tax return in XXXXX.

7. On the date in question, Petitioner had two trusts in Utah, one for property at XXXXX and a second for an office building in XXXXX that houses XXXXX XXXXX XXXXX.

8. Petitioner testified that he had rental incomes from the XXXXX building in XXXXX.

9. At a time prior to the date in question, Petitioner had a XXXXX XXXXX at the XXXXX XXXXX XXXXX. As of the date in question and since that time, Petitioner returns on rare occasion to the XXXXX practice on a consulting basis if his help is requested by a friend or fellow XXXXX and Petitioner finds the case appealing. Petitioner did not maintain a XXXXX practice per se on the date in question.

10. As for the XXXXX properties, one of the lots is vacant land and the other is a residence where Petitioner's son lives. His son is a beneficiary of the irrevocable trust.

11. Petitioner maintains a Salt Lake phone number and an employee who handles business affairs of the XXXXX practice building and any messages for Petitioner.

12. At the time Petitioner purchased the XXXXX at the XXXXX car dealership, he also purchased a Honda. He registered the XXXXX in Utah and paid full taxes as the Honda is kept in Utah. Petitioner did not do the same with the corvette as it was driven to XXXXX the day after purchase and eventually taken to Florida where it was registered.

13. Also, Petitioner owns a XXXXX vehicle which is registered and stored in Utah. He uses the vehicle whenever he vacations in the state.

14. Petitioner testified that the only reason he bought the corvette in Utah was because of the good price he was offered by a friend at the dealership.

15. Petitioner is a XXXXX who maintains a XXXXX faculty appointment at the XXXXX XXXXX School. He teaches at the school on rare occasion.

16. Petitioner teaches at universities across the nation and performs contract work for the Department of XXXXX which takes him out of the country on a frequent basis.

17. Petitioner does not recall if he read the information provided on the back of the non-resident affidavit when he bought the car. He further stated that he would have had no reason to read the paragraphs as he understood himself to be a Florida resident.

18. Petitioner has a Florida driver's license issued in XXXXX.

CONCLUSIONS OF LAW

Relevant Utah Law states:

For the purposes of vehicle, registration, the term "resident" means, but is not limited to, the following:

3. Any person, except a tourist temporarily within this state, or a student, covered under rule R873-22M-4, who owns, leases, or rents a residence or a place of business within this state, or occupies or permits to be occupied a Utah residence or place of business;

4. Any person engaging in a trade, profession, or occupation or accepting gainful employment in this state;

C. Any person qualifying as a resident under the above definitions, does not qualify as a nonresident for purposes of the exemption from sales tax under Utah Code Ann. Section 59-12104. (Utah Admin. Code. R873-22l-M(2)(B)(C).) The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. 59-1-401(8).)

DECISION AND ORDER

The Tax Commission determines that Petitioner qualifies as a Utah resident for sales and use tax purposes as specified in the above-referenced code section.

The 15 percent penalty for intentional disregard of a law or rule is reduced to a single 10 percent negligence penalty. Interest is not waived. It is so ordered.

DATED this 7TH day of May, 1993.

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