BEFORE THE UTAH STATE TAX
COMMISSION
_________________________________
XXXXX &
XXXXX, )
:
Petitioners, ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. ) AND FINAL DECISION
:
AUDITING
DIVISION OF THE ) Appeal No. 92-1464
UTAH STATE TAX
COMMISSION, :
) Account
No. XXXXX
Respondent. :
________________________________
STATEMENT OF CASE
A
formal hearing was held in this matter before the Utah State Tax Commission on
XXXXX. Lisa L. Olpin, Administrative
Law Judge, presided. Petitioner
represented himself by telephone.
XXXXX, Assistant Utah Attorney General, represented Respondent by
telephone.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
makes its:
FINDINGS OF FACT
1. The tax in question is personal income tax.
2. The year in question is XXXXX.
3. Petitioner moved from Wyoming to Utah in
XXXXX.
4. While residing in XXXXX, Mr. XXXXX was a
union member employed with XXXXX in a management position.
5. In XXXXX, Mr. XXXXX resigned from his
management position and took a leave of absence from XXXXX.
6. At this time, Mr. XXXXX also offered his
employer the option to buy out his seniority status with the union.
7. In late fall XXXXX, XXXXX agreed to buy out
Mr. XXXXX's seniority.
8. As a result, XXXXX began processing the
$$$$$ severance check.
9. Due to time delays in processing the check,
Petitioners received the money sometime in the first quarter XXXXX while
residing in XXXXX.
10. Petitioners claimed the $$$$$ severance
check amount on their XXXXX federal income tax return.
11. They did not claim this amount on their Utah
XXXXX state income tax return.
12. The Auditing Division added the $$$$$ to
Petitioner's XXXXX state taxable income.
A ten percent penalty plus interest was also assessed.
13. Petitioners claim that the severance amount
is not taxable to XXXXX as it was earned while working in XXXXX. Through no fault of their own, the severance
check was not ready until after Petitioners had left XXXXX.
14. Petitioners contend they will suffer a
double tax detriment as described in Utah Code Ann.59-10-115(4) if they are
required to include the disputed amount in their state taxable income.
CONCLUSIONS OF LAW
Relevant
Utah tax statute §59-10-112 reads:
"State
taxable income" in the case of a resident individual means his federal
taxable income (as defined by Section 59-10-111) with modifications,
subtractions, and adjustments provided in Section 59-10-114. Federal taxable income means taxable income
as currently defined in Section 63 of the Internal Revenue Code of 1986.
DECISION AND ORDER
In
this matter, Petitioners basically claim that Utah has unethically placed
itself in a windfall position to benefit from wages earned by a then nonresident
from a non-Utah source.
Petitioners
are correct in asserting that if they had received the severance check while
still residing in Wyoming, this amount would not be deemed taxable income to
Utah.
The
fact remains, however, that Petitioners were residents of Utah at the time they
received the severance check. This
money then becomes taxable to the state of Utah.
There
is no double tax detriment as the disputed amount was never taxed in XXXXX.
Based
upon the foregoing, the Tax Commission finds that the $$$$$ severance amount is
taxable income for the year in which Petitioners received it. (XXXXX).
The
ten percent penalty is waived. The
interest is not. It is so ordered.
DATED
this 18th day of February, 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