Signed 2/29/96





Petitioner, : ORDER


v. : Appeal No. 94-0198





Respondent. : Tax Type: Audit



This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. ß59-1-502.5, on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX, from the law firm of XXXXX. Present and representing Respondent were XXXXX, Assistant Attorney General, together with XXXXX, XXXXX and XXXXX from the Auditing Division.

Respondent has determined that Petitioner was required to file an individual income tax return in the state of Utah for the years XXXXX and XXXXX, and has accordingly made an assessment of taxes, penalty and interest against Petitioner for those two years. It is the position of Petitioner that he was not a resident of the state of Utah and was not domiciled in the state of Utah, and was therefore not required to file tax returns or pay taxes to the state of Utah for those years.

Petitioner was born and raised in the state of Washington, and came to Utah in XXXXX when he married his former wife, XXXXX, who already had a son and daughter living with her here in Utah.

Petitioner originally lived in XXXXX, Utah, but later moved to XXXXX, Utah, where he lived from late XXXXX through XXXXX. During that time, he filed Federal and state of Utah income tax returns through XXXXX.

Petitioner and XXXXX experienced marital difficulties and in XXXXX XXXXX contacted an attorney and obtained an Order requiring Petitioner to move from his house in XXXXX, Utah. Petitioner and XXXXX were not divorced at that time, although Petitioner represents that they entered into an "oral divorce". Petitioner represents that the terms of that oral divorce were that XXXXX could have the house in XXXXX, but that Petitioner would work and pay support for XXXXX and the children. Petitioner took one of their sons with him and moved to the state of California in XXXXX. Petitioner obtained work and registered to vote and did vote as a resident in California. Petitioner represents that since XXXXX he has never returned to Utah to live.

Petitioner represents that together with the home, XXXXX was to have custody of the children, subject to reasonable rights of visitation. Petitioner agreed to pay to XXXXX for the support of XXXXX and the children all of the money which he earned except for a certain amount which he would keep for his own living expenses, and he agreed to pay that amount until any divorce was final. Petitioner also agreed that all payments and accounting would be sent directly to XXXXX whenever possible so she could verify the earnings and the amounts received. That included an agreement to have his W-2 forms provided to her so that she could have a tax return prepared and any refund would be sent to her.

XXXXX and the minor children lived in the home that was agreed to be XXXXXís at XXXXX, Utah. XXXXX retained all of the utilities, including the prior phone listing in the name in which they had been previously registered prior to the separation. XXXXX continued to pay the utilities, including the phone bill, with the money which was sent to her by Petitioner.

Petitioner resided in California from XXXXX until XXXXX when he moved to XXXXX, Wyoming. Upon his move to XXXXX, Wyoming, Petitioner obtained a Wyoming driverís license and surrendered his Utah driverís license to the Wyoming authorities. Petitioner maintains that he has not had a Utah driverís license since XXXXX. However, Respondent submitted a computer document which would indicate that a new driverís license was issued in XXXXX and it shows the address of Petitioner is XXXXX, Utah. Nevertheless, the Driverís License Division does not have an application for renewal signed by XXXXX, and it does not have anything which he signed following his alleged move to California and then to Wyoming.

Petitioner registered all of his cars in the state of Wyoming or later in the state of Washington, but his wife had a vehicle which was registered in the state of Utah during the years in question.

Petitioner maintains that he has never voted in the state of Utah after XXXXX, but has voted in either California, Wyoming, or Washington, and he further claims that he has never worked in Utah and has never lived in Utah after XXXXX. Vehicles were registered for Petitioner in Wyoming in XXXXX, XXXXX, and XXXXX.

Petitionerís visitation with his children in XXXXX occurred in Wyoming, and not Utah.

Petitioner filed his XXXXX individual income tax return in the state of Utah, but did not file a XXXXX, XXXXX, XXXXX or later tax return in the state of Utah. However, in XXXXX, XXXXX of the Utah State Tax Commission inquired of Petitioner and requested that he file a XXXXX tax return. Petitioner represents that he ultimately filed and paid a XXXXX tax return because he alleges that XXXXX ďtrickedĒ him into filing a return by representing that if he would do so that all tax matters with the state of Utah would be final and taken care of.

In XXXXX, when XXXXX was attempting to resolve the alleged tax deficiencies for XXXXX and XXXXX, Petitioner did return to Utah to meet with XXXXX at the Tax Commission. While he was in Utah, Petitioner explored the possibilities of a reconciliation with XXXXX, and also investigated possible employment here. Petitioner ultimately did not reconcile with XXXXX, and did not obtain employment within the state of Utah, but instead returned to Wyoming. While he was here in Utah, he did receive a speeding ticket near XXXXX, Utah. His representation was that he had been to see his children in XXXXX after leaving XXXXX in XXXXX, and that he was then going to Nevada to seek employment. He represents that at the time the Highway Patrol Trooper threatened to put in him jail for having a Wyoming driverís license and Wyoming license plate, but upon checking and determining that he did in fact reside in Wyoming, Petitioner alleges that the trooper then let him go with only the speeding ticket.

In XXXXX, Petitioner applied for unemployment from the state of Wyoming. The payments therefore were sent directly to XXXXX in Utah for the support of XXXXX and the children as Petitioner had agreed to.

On about XXXXX, Petitioner left the state of Wyoming and returned to his native state of Washington. In Washington, Petitioner obtained a driverís license and licensed his motor vehicle. He did not return to Utah in between his move from Wyoming to Washington. In XXXXX and XXXXX, Federal tax returns were filed by Petitioner from Petitionerís address in Washington. The parties filed joint income tax returns, because they were not yet divorced. The tax returns did not show a Utah address.

On XXXXX, XXXXX filed an application for extension to file a XXXXX Utah return, but the address was shown as XXXXX. Petitioner represented that the application for extension was filed as a protective measure because they were not sure what the obligation may be to file a Utah return, especially in view of the fact that the divorce had not yet been finalized. In fact, they had tried to reconcile in Washington, but it ultimately did not work out.

W-2 forms and 1099 forms for dividends were mailed to the XXXXX address which the parties had agreed to do so that XXXXX would know the amount of income which had been earned and would know whether Petitioner was living up to the agreement which he had made.

Petitioner applied for and received unemployment compensation from the state of Wyoming in XXXXX, and from the state of Washington in XXXXX. He never received unemployment compensation from the state of Utah.

When Petitioner moved from Wyoming to Washington, he obtained a Washington driverís license and the Washington driverís license authorities then punched a hole in his Wyoming driverís license and canceled it.

After Petitioner moved to the state of Washington, XXXXX moved to the state of Washington for an attempted reconciliation. XXXXX sold the home of the parties in XXXXX and she retained all of the proceeds from the sale of the home in accordance with the verbal separation agreement which had been made. Petitioner represented that he did not get any of the proceeds from the sale of the XXXXX home.

The attempted reconciliation in the state of Washington failed, and the parties were ultimately divorced in the state of Washington in XXXXX. XXXXX filed the Federal tax returns for XXXXX and XXXXX for the parties, and she showed the Utah address on the Federal returns so that the refund would be sent to her.

A tax is imposed on the state taxable income of every resident individual for each taxable year. (Utah Code Ann. ß59-10-104).

A "resident individual" is either:

a. an individual who is domiciled in this state for any period of time during the taxable year; or

b. an individual 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. (Utah Code Ann. ß59-10-103(l)(j).)

For purposes of determining whether an individual is domiciled in this state, "domicile" shall mean:

a. the place where an individual has a true, fixed, permanent home and principal establishment, and to which place he or she has (whenever he or she is absent) the intention of returning. It is the place in which a person has voluntarily fixed the habitation of himself or herself and family, not for a mere special or temporary purpose, but with the present intention of making a permanent home. (RuleR865-9I-2, Utah Administrative Code).

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 or her domicile, a new domicile must be shown. (RuleR865-9I-2, Utah Administrative Code).

A part year resident is an individual who changes his or her status during the tax year from a resident to a nonresident or from a nonresident to a resident. (RuleR865-9I-2, Utah Administrative Code).


It is clear that Petitioner has had very little contact with the state of Utah since the middle of XXXXX. In fact, the only tie which he has had to the state is that his wife and children were here, and they continued to own a home which continued to have the name of Petitioner on it, and the respective utilities thereto remained in the name of Petitioner. However, it is also clear that he resided outside of the state for the entire time period at issue in this hearing, XXXXX and XXXXX, and that even though he and XXXXX were not yet divorced, that their marriage was effectively determinated, and ultimately did terminate, and that Petitioner had terminated his domicile here and had established a domicile elsewhere.

Based upon the foregoing, it is the Order of the Utah State Tax Commission that the determination of the Auditing Division is hereby set aside, and Petitioner is determined to have not been a resident or domicile of the state of Utah for the years in question, and was not required to file a Utah State individual income tax return for XXXXX and XXXXX. It is so ordered.

This Decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:

Utah State Tax Commission

Appeals Division

210 North 1950 West

Salt Lake City, Utah 84134

Failure to request a Formal Hearing will preclude any further administrative action or appeal rights in this matter.

DATED this 29 day of February, 1996.


W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner