96-2187

Income

Signed 6/6/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

:

Petitioner, : FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. : AND FINAL DECISION

:

AUDITING DIVISION OF THE : Appeal No. 96-2187

UTAH STATE TAX COMMISSION, :

: Account No.#####

Respondent. : Tax Type: Income

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a Formal Hearing on May 6, 1997. Gail S. Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was PETITIONER and PETITIONER. Present and representing Respondent was Brent Taylor and Frank Hales 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 income tax.

2. The periods in question are 1994 & 1995.

3. Respondent has made a determination that the income of Petitioner is taxable by the State of Utah for the periods involved.

4. Petitioner claims that such income for the relevant periods is not taxable to the State of Utah because PETITIONER was not domiciled in Utah during the periods at issue.

5. Since 1986, PETITIONER and PETITIONER had owned a home in joint tenancy in Utah and had filed married joint returns.

6. In 1994 and 1995 the Petitioners continued to file married joint returns for the Federal Income Tax, but filed married separate returns using special instructions with the State of Utah, excluding income that was earned in XXXXX where PETITIONER had commenced employment.

7. In 1994, PETITIONER had taken a job in XXXXX with intent for it to be a permanent position. The plan was for her husband to join her upon his retirement from his employment in Utah. PETITIONER purchased a mobile home in XXXXX in her name only. She established a separate checking account in XXXXX which she used for 1994 and 1995. She purchased a car in XXXXX which she licensed in XXXXX. She did not register to vote; there were no elections during the periods in issue which required her to register. Petitioner paid taxes in XXXXX. All medical care Petitioner received during the periods at issue were from XXXXX. All of her bank transactions were with XXXXX banks.

8. As it turned out, after the relevant period, the position which PETITIONER had moved to XXXXX for was eliminated, and, as a result, she returned to Utah.

APPLICABLE LAW

A tax is imposed on 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 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. (Rule R865-9I-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. (Rule R865-9I-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. (Rule R865-9I-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 and domicile than are any outward declarations, oral or written.

DECISION AND ORDER

The Tax Commission finds that the conduct of PETITIONER not only showed an intention to abandon Utah as a domicile in 1994, but showed an establishment of XXXXX as the new domicile for 1994 and 1995. The fact that subsequently her position was eliminated and she lost her job in XXXXX does not alter that conclusion.

Based upon the foregoing, it is the order of the Utah State Tax Commission that Petitioner was entitled to use special instructions and to file married separate returns, excluding income that was earned in XXXXX. It is so ordered.

DATED this 6 day of JUNE, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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