STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COHERENT LASFR DIVISION, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1091

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

By stipulation of the parties, this cause was submitted to Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, based upon a Stipulation of Facts and subsequent memoranda of law. The Issue for determination in this proceeding is whether the Department of Revenue should be required to review petitioner's exemption certificates and reduce the proposed assessment dated September 9, 1982.

APPEARANCES

For Petitioner: John W. Stevens

General Accounting Manager Coherent, Inc.

3210 Porter Drive

Palo Alto, California 94304

For Respondent: Jeff Kielbasa

Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32301

FINDINGS OF FACT

Upon consideration of the Stipulation of Facts and documentation attached thereto, the following relevant facts are found:

1. Petitioner is registered to do business in Florida and is required to collect and remit sales tax. In January of 1982, petitioner was given written notice of respondent's intent to audit petitioner's books and records for the 1979, 1980, and 1981

   fiscal years. The audit apparently occurred during March and April of 1982.

   
   

2. On June 16, 1982, the respondent, through Tax Auditor John Felton, issued a "Notice of Intent to Make Sales and Use Tax Audit Changes." Petitioner was advised that if it bias aggrieved by the proposed audit changes, it would have until July 16, 1982, "or such additional time as may be authorized by the Department in writing" to contact the office and discuss any problems. Petitioner was further advised that if it did not avail itself of the discussion privilege, the Department would issue a proposed notice of deficiency in the amount of $6,975.68 for delinquent sales taxes, penalty and interest through June 16, 1982.

   
   

3. By a form letter dated September 9, 1982, the Department provided the Notice of Proposed Assessment of tax, penalty and interest in the amount of $6,975.68. The form letter stated that, if there were objections to the proposed assessment, petitioner would have until November 9, 1982, or such additional time as may be authorized by the Department in writing, to contest the assessment pursuant to informal protest provisions. These provisions require a written protest postmarked within 60 days of the Proposed Assessment, or a written request within that same period of time for an extension of time to file the written protest.

   
   

4. Mr. John Felton, a Tax Auditor for the respondent in California, visited the petitioner's office on September 22, 1982, for a post-audit meeting. Petitioner apparently informed Mr. Felton of the existence of exemption certificates but did not, at that time, have the appropriate documentation for the tax credits. Mr. Felton advised petitioner of the documentation required to support any claimed tax credits.

   
   

5. By letter dated October 1, 1982, Mr. Felton enclosed the June 16, 1982 sales tax audit, the September 9, 1982 Notice of Proposed Assessment and advised petitioner's staff accountant as follows:

   
   

   "... You will note that some action must be taken with respect to the Notice of Proposed Assessment by 11/9/82.

   As soon as you have accumulated your docu- mentation in support of any claimed tax credits, contact me and I will have a revised proposed assessment issued.

   If I may be of further assistance, please call me at 714-956-4311 (preferably, since I expect to be out of my Sunnyvale office most of October) or 408-737-1405."

6. Petitioner's General Accounting Manager attempted to telephone Mr. Felton on several occasions during the last week of October and the first week of November, 1982. These attempts were unsuccessful. Petitioner does not allege that it mailed any documentation to Mr. Felton or the Department or that it filed a timely written protest or a timely request for an extension of time to file a protest.

   
   

7. On November 16, 1982, Mr. Felton called petitioner's staff accountant, who advised Mr. Felton that he would mail documentation supporting the tax credits on or before November 24, 1982. Having received no such documentation, Felton, by inter- office memorandum dated December 10, 1982, recommended to the respondent that the original proposed assessment dated September 9, 1982, be processed. Petitioner was notified by letter dated January 31, 1983, that the prior audit had become final and requesting petitioner to forward its remittance of $7,236.56, said amount consisting of the original assessment plus updated interest.

   
   

   CONCLUSIONS OF LAW

   
   

8. While taxing statutes are generally construed in favor of the taxpayer, exemptions from or exceptions to a taxing statute are strictly construed against the taxpayer. State ex rel Szaho Food Services, Inc. of N.C. v. Dickison, 286 So. 2d 529 (Fla. 1973). Clearly, the burden of proof when claiming an exemption is upon the taxpayer seeking the exemption. Anderson v. Department of Revenue, 403 So. 2d 397 (Fla. 1981). Also see Rule 12A-1.38, Florida Administrative Code. Evidence of the exempt status of a sale must be submitted to the Department during the protest period. Section 212.02(3)(a), Florida Statutes; Rule 12A-1.93, Florida administrative Code.

   
   

9. The facts in the record of this proceeding establish that petitioner was fully and repeatedly advised of its responsibilities to provide documentation of the claimed exemptions to the Department of Revenue. It was given the opportunity to discuss the notice of intent to make audit changes, and it was fully advised of its right and opportunity to either contest the proposed assessment or to file a written request for an extension of time to contest the proposed assessment on or before November 9, 1982. Evidence of the exempt status of a sale may only be provided the Department during the protest period. Section 212.02(3)(a), Florida Statutes. Even if it can be successfully argued that the 60-day time period was extended beyond November 9th by Mr. Felton's November 16, 1982 telephone call, this argument is to no avail to petitioner because the documentation supporting an exemption was never forwarded to Mr.

Felton or the Department. Obviously, petitioner never relied to its detriment upon this oral extension of time from the final assessment date of November 9, 1982. Having failed to timely provide the documents supporting an exemption or timely request an extension, and having failed to prove by competent substantial evidence any facts tending to demonstrate an estoppel against the respondent, petitioner is not now entitled to have its exemption certificates considered.

RECOMMENDED ORDER

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that a Final Order be entered upholding the assessment against petitioner.

Respectfully submitted and entered this 19th day of September, 1984, in Tallahassee, Florida.

COPIES FURNISHED:

John W. Steven, Esquire 3210 Porter Drive

Palo Alto, Calif. 94304

Jeff Kielbasa, Esquire The Capitol, Room LL04 Tallahassee, Fla. 32301

Randy Miller Executive Director Department of Revenue Carlton Building

Tallahassee, Fla. 32301

DIANE D. TREMOR

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 19th day of September, 1984.

Docket for Case No: 83-001091

Orders for Case No: 83-001091