BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX, ) AND FINAL DECISION
) Appeal No. 92-1774
: 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. XXXXX, Assistant Utah Attorney General, appeared on behalf of the Auditing Division. 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. Petitioner, a XXXXX resident, purchased a boat in XXXXX in Salt Lake City, Utah. Petitioner paid over $$$$$ after credit for his trade-in.
3. At the time of purchase, Petitioner signed a non-resident affidavit, stating that he was a XXXXX resident. As a result, Petitioner was not charged sales and use tax.
4. Petitioner asked the seller to deliver the boat to XXXXX, Utah where Petitioner would then take possession. The seller agreed to do this as the boat would be enroute through XXXXX on its way to Salt Lake.
5. Petitioner did take delivery of the boat at XXXXX, Utah.
6. The boat is stored and maintained in Utah as it has been since the purchase.
7. Petitioner testified he registered the boat in XXXXX.
8. The Utah State Tax Commission notified Petitioner in XXXXX that he owed taxes on the purchase of the boat since the boat is moored in Utah. Interest calculated from the date of purchase was also assessed.
9. Petitioner requests a waiver of the interest in that the Tax Commission did not notify him of his obligation to pay taxes at the time of sale or within any reasonable amount of time therefrom.
10. The non-resident affidavit does not include any information that would have apprised Petitioner that boat purchases are taxable if the boat will be used more than fourteen days per year in Utah. "Use" includes mooring, slipping and dry storage.
11. Petitioner states in a letter to the Tax Commission dated XXXXX, XXXXX that he "more or less expected to get a statement from Utah soon after I bought the boat, but as the months rolled by I guess I forgot about it."
12. Petitioner said he wasn't sure how the tax, in this case, would be computed, i.e., on the purchase amount, the trade-in value, etc.
CONCLUSIONS OF LAW
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).)
For boats and outboard motors, infrequent, occasional, nonbusiness use in Utah not exceeding fourteen days in any calendar year, will not invalidate the sales and use tax exemption. Use for more than fourteen days requires registration of a non-resident's boat under the State Boating Act and, therefore, invalidates the exemption. "Use" includes mooring, slipping and dry storage as well as actual operation. Utah Administrative Rule R873-22l-M(C)(2).
According to Utah law, sales of boats of a type required to be registered under Title 73, Chapter 18, State Boating Act, boat trailers, and outboard motors which are made to bona fide nonresidents of this state and are not thereafter registered or used in this state except as necessary to transport them to the borders of this state are exempt from sales and use tax. Utah Code Ann. §59-12-104(32).
DECISION AND ORDER
In this case, it appears that Petitioner had not paid sales and use tax in either Utah or XXXXX prior to the time the Utah State Tax Commission demanded payment. Petitioner managed to slip between the cracks when he purchased the boat as a nonresident of Utah, but then did not take it to XXXXX. As a resident of XXXXX, it is likely he did not pay the sales and use tax because he stored the boat in Utah.
In any case, Petitioner knew he owed the tax to either XXXXX or Utah. In order to avoid large interest assessments and possible penalties, Petitioner should have obtained guidance from Utah or Wyoming rather than wait for either state to find him.
The interest is not waived. It is so ordered.
DATED this 25th day of February, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes