94-017
June 15, 1994 Advisory Opinion Request
August 29, 1994 Response from the Tax Commission
September 16, 1994 Request for Clarification
September 23, 1994 Response from the Tax Commission
XXXXX
Utah State Tax
Commission
Heber M. Wells Bldg
160 E. 3rd Street
Salt Lake City, UT
84134
Dear Roger:
Confusion obviously
abounds within the manufactured housing industry concerning our obligations
under Utah's recycling tax laws. In reading the statute, it refers to the
collection of the tax upon retail sale of a tire (or a vehicle with tires) to a
consumer residing in Utah. Since we do
not include those tires used to transport the homes in our sales to retail
customers, it has been our position that this tax does not apply to
manufactured homes.
An out of state
manufacturer (they are all out of state) ships a new home to a dealer who then
sells it to a consumer. The tires,
wheels and axles are removed and recycled back to the manufacturer. In his purchase of a manufactured home, the
consumer does not buy the wheels, tires, etc.
If a home is ever moved again, consumers normally rent the
transportation system from a licensed transporter who retains ownership after
the move is completed.
Since the purchase of
the home from the factory by a dealer is a wholesale transaction, and no retail
sale of the tires occurs, it is our contention that the recycling tax does not
apply.
We need a tax
commission opinion on this matter so I can properly advise our members on this
important question. I await your reply.
Sincerely,
XXXXX
Executive Director
Re: Advisory Opinion-Application of Waste Tire
Recycling Act to Tires Used for Transport of Manufactured Homes
Dear XXXXX:
Your request for an
advisory opinion as to the application of the waste tire recycling fee to sales
or purchases of tires used in transporting manufactured homes was referred to
the Auditing Division for their analysis.
The division's staff
recommendations are as follows:
1.
In order for the waste tire recycling fee to apply, there must be a
sale/purchase of the tires in Utah or for use in Utah. If there is no sale or purchase, the fee
cannot be imposed.
2.
It is not, however, necessary that the sale transaction be to the final
owner of the manufactured home. For example, if a manufacturer sells the tires
to the Utah dealer (who does not resell the tires but uses them to transport
the manufactured home), that sale of the tires is subject to the waste tire
recycling fee. If the manufacturer is
outside of Utah and does not collect the fee, the dealer has direct
responsibility to the Tax commission for the fee. Tires which are first put into use outside of Utah are exempt
from the fee.
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.
Respectfully,
Alice Shearer
Commissioner
Re: Advisory Opinion - Application of Waste Tire
Recycling Act to Tires Used for Transport of Manufactured Homes
Dear Commissioner
Shearer:
This office represents
the XXXXX. I have been forwarded a copy
of the letter from XXXXX, Executive Director or the XXXXX, to XXXXX, dated
XXXXX, as well as a copy of your reply, dated XXXXX. I wish to receive a clarification of the Commission's position
after the Commission has considered the following two matters:
1.
The tires on manufactured homes are not first put into use in Utah. Rather, they are first put into use in other
states. Furthermore, the tires are most
often used tires rather than new tires.
2.
The tires do not remain in Utah.
Rather, the tires, wheels and axles are removed and sent back to the
manufacturer.
Since the purpose of
the Waste Tire Recycling Act is to provide funds for recycling in Utah, in
light of the fact that the tires are not disposed of in Utah, but rather are
recycled back to the manufacturer, it would appear that the Act should not
apply to such situations.
I would appreciate it
if you would review the advisory opinion in light of the information set forth
above. Thank you for your cooperation.
Very truly yours,
XXXXX
Dear XXXXX
In response to your
letter of XXXXX, please refer to the advisory opinion dated XXXXX, UCA Title 26, Chapter 32a, and Tax
Commission Rule R865-19S-93 (enclosed).
The advisory opinion
is particularly pertinent to your questions.
In 2. the final sentence reads: “Tires which are first put into use
outside of Utah are exempt from the fee.”
As you explained, these tires are part of the undercarriage used to
relocate the manufactured home from the factory to a homesite. The homes are not manufactured in Utah so
the tires are first put into use outside the state. Even if the homeowner purchased the tires and undercarriage, you
would not be required to collect the fee under Section 26-32a-104(a)(b), “The
recycling fee does not apply to recapped or resold used tires.”
Only if a new tire is
purchased in Utah, perhaps as a replacement for one from out of state, would
the purchaser (consumer) pay the fee to the Utah retailer.
The scenarios you
describe are not transactions that trigger payment of a recycling fee. If the facts change, so could this advice.
Respectfully,
Alice Shearer
Commissioner