Division of Administrative Hearings, Florida
Latest Update: Dec. 01, 1981
Having Noted that attorneys for the parties filed Exceptions to the Recommended Order, the Executive Director has reviewed the transcript of the hearing with regard to the exceptions and finds specifically that the Hearing Officer erred in some of his statements in the preamble of the Order, the Findings of Fact and the Conclusions of Law as hereinafter set forth. The Hearing Officer made statements that the capital gains upon which the tax accrued were realized on the sale of the assets of the Corporate Petitioners. The transcript of the hearing at pages 12-14 clearly establishes that the disposition which gave rise to the capital gains was the distribution of the Corporations' assets upon the liquidation of the Corporations following a sale of the Corporations' stock; not a sale of corporate assets. Based upon the foregoing factual finding the Executive Director enters the following order as final agency action in this case. The Pen Haven Sanitation Company and West Florida Utilities, Inc., were sold in 1977 to the Board of County Commissioners of Escambia County. The Board of County Commissioners elected to dissolve these corporations and distribute their assets to itself. Thereafter the corporations were required to file final corporate income tax returns reflecting capital gains on the disposition of the assets of the corporations. A gains was reported on these assets equal to the fair market value or salvage value, less the adjusted basis of the assets. This gain was reported on the taxpayer's federal tax return and on the Florida corporate income tax return which was filed for the 1977 tax year.A Final Order should be issued denying the Petitioners corporate tax refunds where subject income was realized by Petitioners after the effective date of Florida's jurisdiction to tax corporate income.
