September
6, 1991 Response from Tax Commission
June
21, 1991 Letter from XXXXX of
XXXXX
XXXXX
Request
for Advisory Opinion
Dear
Mr. XXXXX:
I
am responding to your letter of June 21, 1991 to XXXXX, Assistant Attorney
General.
It
is against policy to issue an advisory opinion for a taxpayer on issues that are
presently under appeal to the Tax Commission. To do so would be to render a
decision reserved for the Commission.
Your
request for an advisory opinion is denied.
Joe
B. Pacheco
Commissioner
HAND
DELIVERED
Utah
State Tax Commission
XXXXX
Re:
Request for Advisory Opinion Regarding Exemption from Sales and Use Taxes for
Non-Resident Purchasers of Motor Vehicles
Dear
Ms. XXXXX:
The
law firm of XXXXX represents XXXXX ("XXXXX") which is a bottler of
soft drink products. XXXXX by this letter
respectfully requests a written advisory opinion from the Utah State Tax
Commission ("Commission") regarding whether motor vehicles purchased
within Utah that are then immediately thereafter transferred outside the state
are exempt from Utah sales and use taxes under the scenario described below.
XXXXX
is a XXXXX corporation whose principal place of business is in Utah. XXXXX has various free standing affiliates
and wholly-owned subsidiaries doing business in a myriad of states.
Specifically, XXXXX has wholly-owned corporate subsidiaries that are organized
under the laws of and doing business in Idaho, Nevada, Wyoming, South Dakota,
Arizona, Washington and Oregon. To take advantage of quantity buying, the
subsidiaries purchase- -through their agent, XXXXX--motor vehicles
("Vehicles") from Utah vendors. Any Vehicle so purchased by a
subsidiary is immediately transferred to the state in which the subsidiary does
business after some minor cosmetic changes have been made to the Vehicle. Such a
Vehicle is licensed with the appropriate state authorities after such a
transfer. For cost saving reasons and administrative convenience, accounting
for all subsidiaries and affiliates is centralized in XXXXX's accounting office
located in Salt Lake City, Utah and each Vehicle is listed in XXXXX's general
ledger. That ledger indicates the subsidiary's or affiliate's ownership of the
Vehicles.
The
subsidiaries by XXXXX respectfully request an advisory opinion letter from the
Commission that--under the above-described circumstances--purchases of Vehicles
by the subsidiaries through XXXXX qualify for exemption from Utah sales and use
taxes under Utah Code Ann., Section 59-12-104(9). That section exempts from
sales and use taxes, "sales of vehicles of the type required to be
registered under the motor vehicle laws of this State which are made to bona
fide non residents of the State and are not thereafter registered or used in
the State except as necessary to transport them to the borders of the State. .
. ." Id.
A
prompt response will be appreciated so that XXXXX may govern its affairs
accordingly.
XXXXX