Response April 23,
1993
Request
Dear XXXXX:
I am writing to you as
a follow up to our telephone conversation today on whether sales of art work
would be considered as isolated and occasional sales and not taxable, as
defined in Utah Code Annotated section 59-12-104 and R865-19-38S. You gave me
your oral opinion that they would not be taxable and stated that you could give
me a written advisory opinion if I made written request.
The facts involved are these:
1. My father was an artist and died XXXXX.
2. I was appointed by the court as estate
personal representative.
3. The heirs decided that they wanted to divide
the art works among themselves rather than sell the art and divide the cash and
had the will amended to allow this.
4. In XXXXX, art works were sold by the estate
for $$$$$.
5. In XXXXX art works were sold for $$$$$ by
the estate to the XXXXX Museum of Art, which has a tax exempt status as to
sales tax.
6. In XXXXX another sale of art works was made
to the XXXXX Museum for $$$$$, also sales tax exempt.
7. At the time of the sales I received an
opinion from a lady at the Utah sales Tax Commission that the sales would be
considered as isolated, occasional sales and not taxable, so I did not pay a
tax on the $$$$$ sale. The opinion
given was an oral opinion.
8. These three sales were the only sales of art
works made in a 34 month period, which adds up to about one sale per year.
9. In XXXXX I plan to
sell one more painting in winding up the estate for a price of $$$$$.
10. In XXXXX and XXXXX
I have sold furniture, tools and household possessions at several garage-estate
sales and have paid sales tax on these sales.
Could you please give me an opinion on the tax status of the $$$$$ sale
of art works, the XXXXX sale that is contemplated as soon as possible? Thank you.
Sincerely,
XXXXX
XXXXX
Re: Advisory Opinion - Sales Tax Applicability
to Sale of Art Works from XXXXX
Dear XXXXX:
Your request (copy attached)
for an advisory opinion as to whether sales tax applies to certain sales of
artwork from your father's estate was referred to the Auditing Division for
their analysis.
The division's staff
recommendations are as follows:
1. Subsequent to your letter of XXXXX we have
determined that the XXXXX sale for $$$$$ was a sale for resale and was,
therefore, exempt from the tax.
2. The sales for $$$$$ in XXXXX and for $$$$$
in XXXXX were exempt sales to the XXXXX Museum of Art.
3. A review of your letter, telephone
conversations, and other information in Tax Commission files results in the
following information.
a. XXXXX was a
professional artist in the business of producing and selling, at retail, art
works of his creation.
b. XXXXX was for a period
of time a holder of a Utah Sales Tax License.
4. We must conclude
that the art works which are the subject of this opinion were items of
inventory for resale by XXXXX.
5. The sales by the
estate are an extension of sales made by the artist and do not, therefore,
qualify under isolated and occasional sales provisions as being sales by
persons not engaged in business.
6. The sale
contemplated presently -- it has not occurred as of the writing of this letter
-- must be considered a taxable sale if sold to a taxable customer.
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 Bill of Rights are attached.
In contacting the Tax
Commission, if special accommodations are needed in accordance with the
Americans with Disabilities Act, please call (801) 530-6920, (801) 530-6077 or
TDD (801) 530-6269, allowing three working days notice.
For The Commission,
Joe B. Pacheco
Commissioner