February
7, 1992 Response from Tax
Commission
August
9, 1991 Letter from Mayor
XXXXX of XXXXX City
Mayor
XXXXX
Re:
Place of Sale - Local Sales Tax
Dear
Mayor XXXXX:
This
letter is in response to your request for a Tax Commission ruling on which
municipality is entitled to receive the local sales tax if a business is
physically located within two adjoining municipalities.
The
Tax Commission policy is to refer such requests to the division most qualified
to analyze the request and make recommendations concerning it. As such, your
request was referred to the Tax Commission's Auditing Division for their
analysis and recommendations. The division's recommendations are as follows:
1. Utah Code Section 59-12-207 states that if
a retailer has more than one place of business, the place or places at which
the retail sales are consummated are entitled to the local sales tax. The law
also directs the Tax Commission to adopt an administrative rule to better
clarify the statute.
2.
Administrative Rule R865-12-5L says "If a seller has more than one place
of business in Utah, and if two or more of such locations participate in the
sale, the sale occurs at the place of business where the tangible personal
property is located or the place from which it is shipped or delivered."
In other words, the point where inventory is stored.
3.
If an auto dealership occupies property within two adjoining municipalities,
and the vehicles are stored and demonstrated from only one of the cities, that
city is entitled to the local sales tax. If they are stored and delivered from
both cities, both cities are entitled to a share of the local tax. In this
case, a sales tax return form TC71M and an attached schedule A, showing two
separate locations should be filed.
4.
Copies of the statute and rules referred to are attached.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and a copy of the Utah Taxpayer's Bill of Rights are
attached.
For
the Commission,
Joe
B. Pacheco
Commissioner
Utah
State Tax Commission
Attn:
Roger Tew
160
East 300 South
SLC,
UT 84111
Dear
Commissioner:
I
would appreciate your assistance in helping XXXXX City officials and staff
resolve a question about point-of-sale sales tax determination. The question
pertains to the following possibility.
An
auto dealership is considering locating in XXXXX City. One of the proposed
locations would provide for a licensed business location in XXXXX City but a
vehicle display area may be provided on adjoining property in an adjoining
municipality. Our question pertains to the decision about which municipality
would receive the point-of-sale sales tax reimbursement from the state.
I
understand the difficulty in responding to proposed or hypothetical situations
but please understand that we would like to avoid any future surprises. Your
opinion on this question may affect decisions we make as a municipality in
regards to proposed business development.
Will
you, please provide us with any rules, regulations or policies currently in
effect pertaining to the criteria used in determining point-of-sale and appeals
of point-of-sale decisions. If there are any individuals on your staff which
may be helpful for us talk to, please provide their name and phone number.
Thank
you in advance for your help.
Sincerely,
XXXXX
Mayor