STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAMELOT GULFSIDE INTERVAL )

VACATIONS, )

)

Petitioner, )

)

vs. ) CASE NO. 86-4485

) STATE OF FLORIDA, DEPARTMENT OF ) REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

The final hearing in this case was held on April 3, 1987, in St.

Petersburg, Florida. Appearing for the parties were:

For Petitioner: Ms. Margaret Thompson, Office Manager

Camelot Gulfside Interval Vacations, Inc. 1801 Gulf Way

St. Petersburg Beach, Florida 33706-4297

For Respondent: D. Alan Burns, Esquire

Assistant Attorney General Tax Section

Department of Legal Affairs The Capitol

Tallahassee, Florida 32399-1050

The Petitioner's representative is not a lawyer, but was authorized to represent the Petitioner. She is the Petitioner's office manager, and is qualified to represent the Petitioner. She was accepted as the Petitioner's representative.

The Respondent presented three exhibits, which were admitted into evidence.

The Petitioner presented the testimony of Ms. Thompson, but no exhibits. The Hearing Officer received into evidence one exhibit as a Hearing Officer's exhibit. There is no transcript. The parties waived presentation of proposed findings of fact and conclusions of law.

The issue in this case is whether the Department should grant a partial or complete waiver of penalties and interest assessed due to late payments of sales and use tax.

The previously assigned Hearing Officer denied the motion to dismiss filed by the Respondent, Department of Revenue, and permitted the Petitioner to amend its request for formal administrative hearing to name the Comptroller as an additional Respondent. The Comptroller, however, has never properly received the request for formal hearing, and thus is not a party. The ruling to the contrary at the final hearing is rescinded.

FINDINGS OF FACT

1. Prior to May, 1983, Camelot Gulfside Interval Vacations, Inc. routinely made monthly payments of the Florida sales and use tax. Apparently during this period of time, the Department of Revenue sent preprinted forms to Camelot on a monthly basis and Camelot used these forms for remittance of the tax.

   
   

2. During the months May, 1983, through April, 1985, inclusive, Camelot made no monthly payments of the Florida sales and use tax. During this same period of time, Camelot did not receive forms from the Department of Revenue for the monthly remittance. It cannot be determined from the record whether the cessation of receipt of forms occurred because Camelot failed to send in the monthly payments, or whether the forms ceased to be received independently of Camelot's failure to pay.

   
   

3. The total amount of taxes due and paid late was $11,481.69.

   
   

4. Ms. Margaret Thompson became the office manager of Camelot in May of 1983. The prior office manager failed to tell her that she had to pay the Florida sales and use tax on a monthly basis. Ms. Thompson was supervised by Mr. Alex Minden, who was present in the St. Petersburg Beach office on a day-to- day basis both prior to May, 1983, and during the period when no sales and use tax was paid.

   
   

5. The books of Camelot Gulfside Interval Vacations, Inc. are kept in Toronto, Canada, pursuant to information sent to Toronto by the office in St. Petersburg Beach. In May, 1985, the Toronto office discovered that sales and use tax had previously been routinely paid, but had not been paid for the above periods. Upon investigation, it further discovered that such tax was due and owing. By letter from Mr. Minden, Camelot thus wrote the Department of Revenue on June 11, 1985, to advise it that it owed back taxes. Accompanying the letter was a check for $11,481.69 in full payment. Hearing Officer's Ex. 1.

   
   

6. In December, 1985, the Department of Revenue gave notice to Camelot that $3,788.53 was due as penalties and interest. The computation of this amount is not in dispute.

   
   

7. Camelot immediately paid the amount assessed as penalties and interest, but previously had requested waiver and timely requested a formal administrative hearing to seek a waiver of penalties and interest.

   
   

8. During the period of time that it failed to make monthly sales and use tax payments, Camelot was not notified by the Department of Revenue that payments were overdue and owing. As discussed above, it was Camelot itself that brought the problem to the attention of the Department of Revenue.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction of this proceeding.

   
   

10. The correct calculation of maximum penalties and interest owed by the Petitioner pursuant to section 212.12(2), Fla. Stat. (1986) is $3,788.53.

    
    

11. The Department of Revenue has discretion to settle or compromise all or a portion of penalties and interest due. Section 212.12(4), Fla. Stat.

    (1986). Southern Paving Company et al. v. State of Florida, Department of Revenue, 399 So.2d 11, 13 (Fla. 1st DCA 1981). Liability for penalties may be compromised if "... it is determined by the department that the noncompliance is due to reasonable cause and not to willful negligence, willful neglect, or fraud." Section 213.21(3), Fla. Stat. (1986).

    
    

12. Sales and use tax penalties and interest are payable and collectible as if part of the tax imposed. Section 212.12(4), Florida Statutes (1986). If the Department determines to alter the penalties or interest in this case, then to that extent there will have been an overpayment, in effect, of a tax imposed.

    
    

13. Pursuant to section 214.13(1), Florida Statutes (1986), the Department may "credit or refund the overpayment" where the tax paid is more than the correct amount.

    
    

14. Whether a refund can be granted without joinder of the Comptroller need not be addressed since it appears the Department has authority to grant credits as a remedy.

    
    

15. The nonpayment of sales and use tax in this case was not due to willful negligence or willful neglect. The cessation of payments occurred due to change of office manager and mistake by the taxpayer. While the taxpayer clearly was negligent in failing to exercise ordinary care to see that the taxes were paid when due, the fact that the taxpayer promptly notified the Department and paid the amounts due when nonpayment was discovered in May, 1985, is a mitigating factor. One half of the maximum penalties would be sufficient to instill greater care in the future, and to this extent the penalty has been overpaid.

    
    

16. Interest in full should be assessed, however, because the taxpayer has had the use of the money during the period of nonpayment.

RECOMMENDATION

For these reasons, it is recommended that the Department of Revenue enter its final order denying any waiver of interest paid, but granting a waiver to the taxpayer of 50 percent of the amount of the penalties paid as an overpayment of such tax, and crediting such amount on future assessments.

DONE and RECOMMENDED this 9th day of April, 1987, in Tallahassee, Florida.

WILLIAM C. SHERRILL, JR.

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1987.

COPIES FURNISHED:

Randy Miller, Executive Director Department of Revenue

102 Carlton Building Tallahassee, Florida 32399-0100

William D. Townsend, Esquire General Counsel

Department of Revenue

104 Carlton Building Tallahassee, Florida 32399-0100

J. Gordon Alexander, President

Camelot Gulfside Interval Vacations, Inc. 1801 Gulf way

St. Petersburg Beach, Florida 33706-4297

Docket for Case No: 86-004485

Orders for Case No: 86-004485