95-034
Response
July 28, 1995
Request
Utah
State Tax Commission
Attn:
XXXXX
210
North 1950 West
Salt
Lake City, UT 84134
Dear
Representative,
The
purpose of this letter is to request a ruling from the Utah Department of
Revenue concerning the taxability of supply and other non-resale items
purchased for our own consumption.
These items are purchased and warehoused in our own distribution centers
located outside of Utah. As a retailer
of automotive parts and accessories in 25 states, it is imperative that we
clarify the use tax implications concerning shipments of these items from the
distribution centers to our retail outlets in your state. Our questions are as follows:
1. If our distribution center is located in a state which
mandates that sales tax be paid when title passes, does Utah assess additional
use tax when these items are shipped from this distribution center to retail
outlets located in your state? If so,
please explain how we can avoid double taxation (i.e., are we only assessed on
the difference in rates?).
2. If our distribution center is not located in a state such as
that referred to in question #1 above, but XXXXX elects to remit sales tax,
does Utah assess additional use tax when these items are shipped from this
distribution center to retail outlets located in your state? If so, please explain how we can avoid
double taxation (i.e., are we only assessed on the difference in rates?).
It
would be beneficial to XXXXX if you would respond in writing on these sales tax
issues regarding the taxability of non-resale items for our consumption as it
is our intent to comply fully with the law while attempting to keep our
distribution operation simplified.
Your
prompt attention to this matter is appreciated. Please call me if you have any questions at XXXXX.
Respectfully,
XXXXX
XXXXX
RE:
Advisory Opinion - Application of Use Tax to Items Consumed by XXXXX Stores in
Utah
Dear
XXXXX,
You
requested an advisory opinion regarding the use tax liability on tangible
personal property brought into Utah for XXXXX’s consumption in local
outlets. We find as follows:
A
use tax imposed when tangible personal property which is purchased outside of
Utah is brought into the state for use, storage or other consumption. However, any person who is liable for Utah
use tax is entitled to a credit for sales or use tax legally imposed on the
same property in another state. If the
sales or use tax paid to another state is less than the amount of use tax due
to Utah, the difference must be remitted to Utah. No adjustment is allowed if the tax paid to the other state is
greater than the tax imposed by Utah.
If
XXXXX remits sales tax to a state which has no legally imposed it, then ships
the property into Utah, Utah use tax is due to no credit is allowed for sales
tax paid to the other state. In that
case, XXXXX must request the refund from the other state.
This
opinion is based only on the facts presented in your letter. If additional facts arise which present new
questions, please feel free to request another advisory opinion.
For
the Commission,
Commissioner