STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CARL GLASS d/b/a OSCEOLA FORGE, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1349

) DEPARTMENT OF REVENUE, STATE OF ) FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for final hearing on May 10, 1979. The Petitioner represented himself. The Department of Revenue was represented by William D. Townsend, Esquire.

This is an action wherein the Department of Revenue, pursuant to Chapter 212, Florida Statutes (1978), seeks to assess sales tax against the rental of certain portable advertising signs, the purchase of an injection molding machine and "other purchases," along with a penalty and interest.

Having considered all testimony, evidence and argument of counsel, the Hearing Officer finds as follows:

FINDINGS OF FACT

1. The Petitioner at a time pertinent to this proceeding purchased an injection molding machine in Cincinnati, Ohio, and moved that machine to Florida. No sales tax was paid on that machine in Ohio. Schedule B of Respondent's Exhibit 1, a Revised Notice of Proposed Assessment dated June 22, 1978, shows a tax, penalty and interest owed with regard to the injection molding machine of $862.50.

   
   

2. The proposed tax, penalty and interest set forth in Schedules A of Respondent's Exhibits 1 and 2 relate to the rental of portable advertising signs at times pertinent to this proceeding. The evidence establishes that during the time pertinent to this proceeding the Petitioner, Carl Glass d/b/a Osceola Forge, was in the business of renting portable trailer advertising signs. For this he charged a $150.00 flat fee. His fee included labor, transportation to the site, setup, and leveling. The fee also included general maintenance to keep the sign in operating condition during the period of rental, including the replacement of lights, flashers and other ancillary equipment. The fee further included obtaining necessary permits. Also included in the fee were two changes of the logo on the sign each month, including the letters. All of these services together required an operator to take the sign to the site, set it up, maintain it periodically as needed, and to change the logo twice a month. The renter did not have any responsibility with regard to the sign. The renter did not take physical control of the sign. Control of the sign remained with Petitioner.

3. In Schedule B of Respondent's Exhibit 2 there is a tax, penalty and interest totaling $143.76. This tax, penalty and interest is for "other purchases" made by Petitioner. There is no evidence to establish what these "other purchases" were or that a sales tax was not paid or that they were items subject to a sale or use tax.

   
   

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction of this cause.

   
   

5. That the tax, penalty and interest due on the purchase of the injection molding machine is uncontested. The tax, penalty and interest due with regard to that purchase is $862.50. Pursuant to Chapter 212, Florida Statutes (1978), the tax, penalty and interest is appropriate.

   
   

6. With regard to the proposed assessed tax, penalty and interest of

   $143.76 set forth in Schedule B of Respondent's Exhibit 2, there is no evidence to establish what this sales and use tax is assessed against and therefore the assessment must fail.

   
   

7. Pursuant to Chapter 212, Florida Statutes (1978)

   and Section 12A-1.71, Florida Administrative Code (1979), a Florida sales tax, then at 4 percent, applied to the gross proceeds derived from the lease or rental of tangible personal property where the lease or rental of such property is an established business. In this case Petitioner had an established business of renting tangible personal property in the nature of portable trailer advertising signs. However, subsection 12A- 1.71(8)(a), Florida Administrative Code (1979), states that "When the owner of equipment furnishes the operator and all operating supplies, and contracts for their use to perform certain work under his direction and according to his customer's specifications, and the customer does not take possession or have any direction or control over the physical operation, the contract constitutes a service transaction and not the rental of tangible personal property, and the charge therefore is exempt."

   
   

8. The rental of the portable trailer signs as done by the Petitioner herein and set forth in the findings of fact above meets the requirements of this exemption. The Petitioner furnished an operator to take the trailer sign to the site, set it up, maintain the advertising logo, change the advertising logo, and maintain the sign. The owner exercised no direction or control over the physical operation of the sign nor took possession of the sign. Therefore, the total proposed assessment of tax, penalty and interest in Schedules A of Respondent's Exhibits 1 and 2, totaling $541.83 is not a proper assessment.

   
   

9. No evidence was presented to show fraudulent intent on the part of the taxpayer.

RECOMMENDED ORDER

Therefore, it is hereby RECOMMENDED that:

The Petitioner be assessed a tax, penalty and interest of $862.50 for sales tax on purchase of the injection molding machine.

ENTERED this 17th day of February, 1984, in Tallahassee, Florida.

CHRIS H. BENTLEY

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904)488-9675

FILED with the Clerk of the Division of Administrative Hearings this 17th day of February, 1984.

COPIES FURNISHED:

Mr. Carl Glass Osceola Forge

2749 North Orange Blossom Trail Kissimmee, Florida 32741

William D. Townsend Assistant Attorney General The Capitol - Rm LL04 Tallahassee, Florida 32301

John Browdy, III

Assistant Attorney General Department of Legal Affairs The Capitol - LL04 Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF REVENUE

CARL GLASS d/b/a OSCEOLA FORGE,

Petitioner,

vs. CASE NO. 78-1349

DEPARTMENT OF REVENUE, STATE OF FLORIDA,

Respondent.

/

FINAL ORDER OF THE DEPARTMENT OF REVENUE

THIS CAUSE came before Randy Miller as Executive Director of the Department of Revenue, pursuant to the authority delegated to him by Rules 12-3.02 - 3.05, Florida Administrative Code. Notice of the Hearing was given to the Petitioner and the attorney for the Respondent. At the hearing before the Executive Director, the Findings of Fact, Conclusions of Law and Recommended Order dated February 17, 1984, entered by Chris H. Bentley, Hearing Officer, was considered and the Final Order of the Department of Revenue was entered as follows:

This cause came on for final hearing on May 10, 1979. The Petitioner represented himself. The Department of Revenue was represented by William D. Townsend, Esquire.

This is an action wherein the Department of Revenue, pursuant to Chapter 212, Florida Statutes (1978), seeks to assess sales tax against the rental of certain portable advertising signs, the purchase of an injection molding machine and "other purchases," along with a penalty and interest.

Having considered all testimony, evidence and argument of counsel, the Hearing Officer finds as follows:

FINDINGS OF FACT

1. The Petitioner at a time pertinent to this proceeding purchased an injection molding machine in Cincinnati, Ohio, and moved that machine to Florida. No sales tax was paid on that machine in Ohio. Schedule B of Respondent's Exhibit 1, a Revised Notice of Proposed Assessment dated June 22, 1978, shows a tax, penalty and interest owed with regard to the injection molding machine of $862.50.

   
   

2. The proposed tax, penalty and interest set forth in Schedules A of Respondent's Exhibits 1 and 2 relate to the rental of portable advertising signs at times pertinent to this proceeding. The evidence establishes that during the time pertinent to this proceeding the Petitioner, Carl Glass d/b/a Osceola Forge, was in the business of renting Portable trailer advertising signs. For this he charged a $150.00 flat fee. His fee included labor, transportation to the site, setup, and leveling. The fee also included general maintenance to keep the sign in operating condition during the period of rental, including the replacement of lights, flashers and other ancillary equipment. The fee further included obtaining necessary permits. Also included in the fee were two changes of the logo on the sign each month, including the, letters. All of these services together required an operator to take the sign to the site, set it up, maintain it periodically as needed, and to change the logo twice a month. The renter did not have any responsibility with regard to the sign. The renter did not take physical control of the sign. Control of the sign remained with Petitioner.

   
   

3. In Schedule B of Respondent's Exhibit 2 there is a tax, penalty and interest totaling $143.76. This tax, penalty and interest is for "other purchases" made by Petitioner. There is no evidence to establish what these "other purchases" were or that a sales tax was not paid or that they were items subject to a sale or use tax.

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction of this cause.

   
   

5. That the tax, penalty and interest due on the purchase of the injection molding machine is uncontested. The tax, penalty and interest due with regard to that purchase is $862.50. Pursuant to Chapter 212, Florida Statutes (1978), the tax, penalty and interest is appropriate.

   
   

6. With regard to the proposed assessed tax, penalty and interest of

   $143.76 set forth in Schedule B of Respondent's Exhibit 2, there is no evidence to establish what this sales and use tax is assessed against and therefore the assessment must fail.

   
   

7. Pursuant to Chapter 212, Florida Statutes (1978), and Section 12A-1.71, Florida Administrative Code (1979), a Florida sales tax, then at 4 percent, applied to the gross proceeds derived from the lease or rental of tangible personal property where the lease or rental of such property is an established business. In this case Petitioner had an established business of renting tangible personal property in the nature of portable trailer advertising signs. However, subsection 12A-1.71(8)(a), Florida Administrative Code (1979), states that "When the owner of equipment furnishes the operator and all operating supplies, and contracts for their use to perform certain work under his direction and according to his customer's specifications, and the customer does not take possession or have any direction or control over the physical operation, the contract constitutes a service transaction and not the rental of tangible personal property, and the charge therefore is exempt."

   
   

   The rental of the portable trailer signs as done by the Petitioner herein and set forth in the findings of fact above meets the requirements of this exemption. The petitioner furnished an operator to take the trailer sign to the site, set it up, maintain the advertising logo, change the advertising logo, and maintain the sign. The owner exercised no direction or control over the physical operation of the sign nor took possession of the sign. Therefore, the total proposed assessment of tax, penalty and interest in Schedules A of Respondent's Exhibits 1 and 2, totaling $541.83 is not a proper assessment.

   
   

8. No evidence was presented to show fraudulent intent on the part of the taxpayer.

Therefore, it is hereby ORDERED that:

The Department's assessment of tax, penalty and interest of $862.50 for sales tax on purchase of the injection molding machine be upheld.

DONE AND ENTERED this 17th day of May, 1984, in Tallahassee, Leon County, Florida.

RANDY MILLER EXECUTIVE DIRECTOR DEPARTMENT OF REVENUE STATE OF FLORIDA

I HEREBY CERTIFY that the above Final Order has been filed in the Official Records of the Department of Revenue this 17th day of May, 1984.

Mary L. Ford Agency Clerk

Docket for Case No: 78-001349

Orders for Case No: 78-001349