BEFORE THE UTAH STATE TAX COMMISSION
Petitioners, : FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
AUDITING DIVISION OF THE : Appeal No. 92-1534
UTAH STATE TAX COMMISSION, :
: Account No. XXXXX
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. Petitioners were present and represented themselves. XXXXX, Utah Attorney General, was present and represented Respondent.
Based upon the evidence and testimony presented, the Tax Commission makes its:
FINDINGS OF FACT
l. The tax in question is personal income tax.
2. The years in question are XXXXX and XXXXX.
3. Petitioners moved to Utah in XXXXX from California and built a home here in XXXXX.
4. During XXXXX, XXXXX lost his job and his family experienced great financial difficulty.
5. In XXXXX, XXXXX left Utah for a job he had landed as a brick mason in XXXXX. XXXXX partially supported his family with his Nevada wages during the period in question.
6. At this time, Petitioners were having marital problems and felt that the separation may be beneficial to their marriage.
7. Divorce was still a possibility.
8. XXXXX remained in the couple's Utah home with their child while XXXXX rented an apartment in XXXXX. XXXXX stated that she would have followed her husband to Nevada if he had been financially sound. XXXXX had instructed his wife to try to sell the home after he left.
9. XXXXX worked in Utah during the years in question. It is not disputed that she was a Utah resident.
10. Petitioners licensed their vehicles in Utah while XXXXX was living in Nevada. XXXXX explained that registration and insurance is cheaper in Utah.
11. Also, XXXXX maintained a Utah driver's license while in Nevada.
12. For the years in question, Petitioners filed joint federal income tax returns using the Utah address. XXXXX explained that the use of the Utah address was an error by tax preparer XXXXX.
13. In XXXXX, XXXXX and their daughter joined XXXXX in Nevada where they currently own a home.
14. Petitioners still own their Utah house and are renting it out.
15. Also, in XXXXX, XXXXX obtained a Nevada driver's license.
16. The Auditing Division contends that XXXXX's income earned while in Nevada in XXXXX and XXXXX is taxable to Utah as he was still domiciled in Utah.
17. Petitioners, in turn, argue that XXXXX left the state in XXXXX with the intent to establish a domicile in Nevada so as to allow his family to join him later. XXXXX contends that because he did not purchase a home right away in XXXXX, the Auditing Division mistakenly determined that he did not change his domicile.
18. The Auditing Division assessed Petitioners a ten percent negligence penalty plus interest for not reporting the taxable income to Utah.
CONCLUSIONS OF LAW
According to Utah Code Section 59-10-103(j), a resident individual is a person who is domiciled in this state for any period of time during the taxable year, but only for the duration of such period; or a person 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.
"Domicile" is defined at Section R865-9I-2(D) as follows:
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.
DECISION AND ORDER
In this case, it appears that first and foremost, XXXXX went to XXXXX to earn enough money to support his family still located in Utah. If XXXXX's job worked out and enough money could be saved, then the family would move its domicile from Utah to Nevada. Based upon the evidence and testimony presented, the Tax Commission finds that Petitioners moved their domicile to Utah in XXXXX when they determined it was financially sensible to do so. Up until that time, however, whether or not Petitioners would ever change its permanent residence is not known to any degree of certainty.
The penalty in this case is waived. Interest is not. It is so ordered.
DATED this 18 day of February, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Willes