96-0253

Income

Signed 7/11/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioners, : ORDER

:

v. : Appeal No. 95-1247 & 96-0253

:

AUDITING DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Income

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. §59-1-502.5, on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioners were XXXXX and XXXXX. Present and representing Respondent were XXXXX, Assistant Attorney General, together with XXXXX and XXXXX of the Auditing Division.

Petitioner did not file a Utah individual income tax return for the years XXXXX. Based upon information received from the Internal Revenue Service, the Auditing Division determined that Petitioner should have filed a Utah individual income tax return for those years, and made an assessment for the amount of tax due based upon the information received from the Internal Revenue Service.

Petitioner disputes that he is a resident of the state of Utah or is required to file a state income tax return in this state.

Petitioners XXXXX are husband and wife, and XXXXX resides at a home which the parties own in XXXXX, Utah. The home contains approximately 1,700 square feet. The parties are not divorced, not legally separated, and have a continuing marital relationship.

The parties have two children, who, at the time of the hearing, are ages 26 and 29. Those children were raised in the state of Utah and attended school within the state of Utah, and both children still reside in Utah. The older daughter of the parties lives at the home of the parties in XXXXX, Utah.

Petitioner is an airplane pilot and flies freight planes based upon contract. The work of XXXXX is usually for contracts of shorter duration, and generally those positions do not constitute permanent employment, but he flies for a period until the contract expires, and then he may change locations.

During XXXXX, Petitioner was based in XXXXX, and lived in XXXXX until XXXXX. In XXXXX, Petitioner was transferred to the XXXXX and claims to have lived in XXXXX until XXXXX.

In XXXXX, Petitioner went to XXXXX for approximately one (1) month for training.

In XXXXX, Petitioner was stationed at XXXXX for the remainder of XXXXX, and remained their until XXXXX.

In XXXXX, Petitioner moved to XXXXX and went to work for XXXXX.

In XXXXX, Petitioner went to XXXXX, and claims to be living in XXXXX as of the time of the hearing, although there was one other stop in between where he moved, but such move was outside of the audit period.

When Petitioner claims to have lived in XXXXX, he lived on XXXXX, but could not remember the address. When Petitioner alleges to have lived in XXXXX, he could not remember the address for the location of his apartment. When Petitioner alleges to have lived in XXXXX, he stayed at a hotel, and could not remember the address. When Petitioner claims to have lived in XXXXX, he lived in a condominium, but he could not remember the address. When Petitioner lived in XXXXX, he lived at the XXXXX on XXXXX, but does not remember the specific address.

When Petitioner was stationed in XXXXX, he would return to XXXXX, Utah to be with his wife approximately every ten (10) days to two weeks. When Petitioner was stationed in XXXXX, Texas, he returned to XXXXX, Utah periodically, although on a less frequent basis than when he was stationed in XXXXX, because it was further to fly and more difficult travel. When Petitioner was stationed in XXXXX, he returned to Utah approximately every ten (10)days, XXXXX, he returned to Utah approximately once per month. When Petitioner was stationed in XXXXX, he would return to Utah approximately once every week.

Petitioner has a bank account at XXXXX in XXXXX, and he also has a joint bank account with his wife in the state of Utah.

Petitioner's doctor is located in XXXXX, and Petitioner obtains his semi-annual physical examination for the Federal Aviation Administration from a doctor in XXXXX, Utah. The dentist of Petitioner is located in XXXXX, Utah.

Petitioner has the bills for his activities sent to Utah if they are related to his house and his wife's living in Utah, and he has some bills sent to him in XXXXX.

Petitioner has a telephone listing in the state of Utah.

Petitioner has a XXXXX, and does not have a driver's license from any other state.

Petitioner makes contributions to a church located in Utah, and does not make contributions to any state located outside the state of Utah.

Petitioner owns only one vehicle, and that vehicle is registered within the state of Utah.

The parties have stipulated that Petitioner, XXXXX, is not in the state of Utah 183 days per year or more, and was not in the state of Utah for such a period of time during any of the three (3) years at issue in this proceeding. However, Respondent has pursued this matter as a domicile case, and not as one requiring physical presence in the state for 183 days or more per year.

APPLICABLE LAW

A tax is imposed upon the state taxable income of every resident individual for each taxable year. (Utah Code Ann. §59-10-104).

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. §59-10-103(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 principle 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 non-resident or from a non-resident to a resident. (RuleR865-9I-2, Utah Administrative Code).

A determination of residency or domicile is based upon the facts determined for each case. Those facts and a person's actions, are more demonstrative of a person's residence or domicile than are any outward declarations, oral or written.

DECISION AND ORDER

While it has been agreed that Petitioner is outside of the state for a majority of the year, it is also very clear that the domicile of Petitioner for income tax purposes is within the state of Utah. Petitioner has voluntarily fixed the habitation of himself and his family within the state of Utah, not for a mere special or temporary purpose, but with the present intention of making Utah his permanent home. Utah is the place to which Petitioner clearly has the intention of returning whenever he is absent therefrom. Petitioner's business activities are clearly conducted primarily from the state of Utah, with his banking, doctor, dentist and other matters being taken care of from the state of Utah. Further, Petitioner has availed himself of the benefits of Utah State Government by obtaining a Utah Driver's License, and there is no evidence that he has ever had a driver's licence in any other state. He clearly has not changed driver's licences each of the times he has changed his workstation. The issue of domicile is determined more by the personal life which he elects that the work life which is determined for him.

Based upon the foregoing, it is the order of the Utah State Tax Commission that Petitioner, XXXXX, is domiciled within the state of Utah for income tax purposes, and was required to file a Utah individual income tax return for the years in question. The audit assessment made by Respondent against Petitioner should be, and hereby is, sustained.

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 11 day of July, 1996.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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