98-0712

Income Tax

Signed 6/15/99

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

: ORDER

Petitioners, :

: Appeal No. 98-0712

v. : Account No. #####

:

AUDITING DIVISION OF THE : Tax Type: Income Tax

UTAH STATE TAX COMMISSION, :

STATE OF UTAH, : Judge: Davis

:

Respondent. :

_____________________________________

Presiding:

G. Blaine Davis, Administrative Law Judge

Appearances:

For Petitioner:

For Respondent: Ms. Michelle Bush, Assistant Attorney General

Mr. Frank Hales and Mr. Brent Taylor, from the Auditing Division

STATEMENT OF THE 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 May 6, 1999.

The issue in this proceeding is whether PETITIONER was domiciled in the State of Utah during 1993, 1994, 1995, and 1996 for purposes of being required to file a Utah resident income tax return.

PETITIONER spent a number of years in the United States Military, and has retired from the Military.

In 1992, PETITIONERS were married in the State of Utah. In February, 1993, PETITIONER obtained employment at the COMPANY STATE, which was full time employment. PETITIONER went to CITY STATE, and rented an apartment there, but PETITIONER'S WIF remained in a Salt Lake City apartment because she had a good job here and could not find comparable employment in CITY. PETITIONER would return to Salt Lake City between one and two weekends per month, and PETITIONER'S WIFE would go to STATE sometimes as much as one weekend per month. Their separation was for employment purposes only, and it was not because of any marital difficulty.

During the time PETITIONER was employed in STATE, he continued to search for comparable employment within the State of Utah. PETITIONER'S WIFE also searched for employment within the State of STATE.

During the time PETITIONER was in STATE, he registered to vote in STATE, obtained a STATE driver's license, registered a motor vehicle in STATE, obtained a STATE resident fishing license, and joined a toastmaster's club in STATE.

During that time PETITIONER'S WIFE had a Utah bank account, and his Military retirement check was deposited by way of direct deposit into his Utah bank account. He also filed joint federal income tax returns showing Utah as his address, and his W-2 forms were mailed to his Utah address, so that was the address on file with his employer. He had one vehicle registered in Utah, which was primarily used by his wife, PETITIONER'S WIFE.

In 1996, PETITIONER returned to Utah, and he and PETITIONER'S WIFE live together in a home they have purchased in CITY, Utah.

PETITIONER filed resident income tax returns in Utah for at least 1991 and 1992, prior to accepting employment in STATE, and since returning to Utah he has filed resident income tax returns in Utah.

APPLICABLE LAW

A resident individual means an individual who is either domiciled in this state for any period of time during the taxable year, or 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(1)(j).

"Domicile" 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. Utah Administrative Code, R865-9I-2.D.

DECISION

In this case, it is uncontested that PETITIONER was employed in the State of STATE during most of 1993, all of 1994 and 1995, and the first two months of 1996. During that time, he rented an apartment, had a STATE drivers license, registered his motor vehicle in the state, and had a STATE fishing license. It is clear that he did not spend 183 days in the State of Utah.

However, the test for determining domicile is where he had his true, fixed, permanent home and principal establishment, and to which he had the intention of returning.

It is clear that PETITIONER was domiciled in the state of Utah prior to going to Wyoming, he and his wife were married in this state, his wife remained in this state, and he made frequent weekend trips to this state to see his wife. He had his important mail, including his bank statement, his W-2 forms and his tax returns mailed to the State of Utah and not to the State of STATE. At the conclusion of his employment in STATE, in February 1996, he again returned to the State of Utah, where he and his wife purchased a home in which they now reside.

In reviewing the definition of Domicile established by the Rule, physical presence and employment in a state are factors to be considered in determining domicile, but they are not controlling factors.

PETITIONER was a resident of Utah prior to his marriage, he was married in Utah, and his wife remained in Utah while he was employed in STATE. Those factors would not prevent him from becoming domicile in STATE if he clearly abandoned Utah as his domicile and clearly established a domicile in STATE. However, no evidence was presented to support a finding that he abandoned his domicile in Utah, and very little evidence was presented which would support a finding that he established a domicile in STATE.

Where PETITIONER was clearly domiciled in Utah prior to accepting employment in STATE, retained numerous ties to the State of Utah while he was employed in STATE, and then returned to Utah when his STATE employment terminated, it appears clear that Utah was his state of domicile. His physical presence and employment in STATE do not appear to have been done with a present intention of making a permanent home in STATE, but were for a mere special or temporary purpose, i.e., earning a living. Nevertheless, the evidence indicates he had fixed Utah as his true, fixed, permanent home and principal establishment to which he always had the intention of returning.

In view of the evidence presented, the Commission determines that Petitioner never terminated his domicile in the State of Utah, and Utah continued to be the state to which he always intended to return. Therefore, the Commission finds that his presence in STATE was for a special or temporary purpose, and he retained the intention of returning to Utah and maintained Utah as his domicile.

DECISION AND ORDER

Based upon the foregoing, the Commission determines that PETITIONER continued to be domiciled in Utah during the time he was working in Wyoming in 1993 thru 1996. Accordingly, the decision of the Auditing Division that PETITIONER was domiciled in Utah during the periods in question is affirmed, and the Petition for Redetermination is denied.

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 appeal rights in this matter.

DATED this 15TH day of June, 1999.

____________________________________

G. Blaine Davis

Administrative Law Judge

BY ORDER OF THE UTAH STATE TAX COMMISSION.

The Commission has reviewed this case and the undersigned concur in this decision.

DATED this 16th day of June, 1999.

Richard B. McKeown Pam Hendrickson

Chairman Commissioner

R. Bruce Johnson Palmer DePaulis

Commissioner Commissioner

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