STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF REVENUE,

Petitioner,

vs.

SPIN AND MARTY, INC., d/b/a CRABBIT'S PUB,

Respondent.

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) Case No. 06-4192

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RECOMMENDED ORDER

This cause came on for formal hearing before Harry L. Hooper, Administrative Law Judge with the Division of Administrative Hearings, on January 3, 2007, in Brooksville, Florida.

APPEARANCES

For Petitioner: Warren J. Bird, Esquire

Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050

For Respondent: James McNiff

Spin and Marty, Inc., d/b/a Crabbit's Pub

10050 Sleepy Willow Court Spring Hill, Florida 34608

STATEMENT OF THE ISSUE

The issue is whether Respondent's Certificate of Registration may lawfully be revoked.

PRELIMINARY STATEMENT

On September 20, 2006, Petitioner, Department of Revenue (Department), filed an Administrative Complaint, alleging that Respondent Spin and Marty, Inc. (Spin and Marty), had violated certain provisions of Chapter 212, Florida Statutes, including the requirement to pay taxes when due. On October 25, 2006, the Department received a request for a hearing from Spin and Marty. The request and accompanying documents were filed with the Division of Administrative Hearings on October 30, 2006.

The case was set for hearing in Brooksville, Florida, on January 3, 2007, and was heard as scheduled. The Department offered seven exhibits that were accepted into evidence. The Department called one witness. Spin and Marty offered two exhibits that were accepted into evidence, and presented the testimony of the corporate representative, James McNiff

(Mr. McNiff).

A transcript was filed January 26, 2007. The Department timely filed Petitioner's Proposed Recommended Order. Spin and Marty did not file a proposed recommended order.

Citations to statutes are to Florida Statutes (2006) unless otherwise noted.

FINDINGS OF FACT

1. The Department is an agency of the State of Florida pursuant to Section 20.21. The Department has the responsibility of administering the revenue laws of the state, including the laws relating to the imposition and collection of the state's sales and use tax, pursuant to Chapter 212.

2. Spin and Marty is a Florida corporation doing business as Crabbit's Pub whose principal address is 10513 Spring Hill Drive, Spring Hill, Florida.

3. Spin and Marty is a "dealer" as that term is defined in Chapter 212. It holds a certificate of registration issued by the Department that is numbered 37-8012056472-7. Spin and Marty initially registered with the Department on January 30, 1992.

4. The sales and use tax collected by a registrant, such as Spin and Marty, become the property of the state at the moment they are collected. A registrant is an agent of the state when collecting the sales and use tax. Spin and Marty was required to remit the sales and use tax collected to the state on or before the 20th of each month.

5. From November 1999 until December 2003, Spin and Marty filed no returns and paid no sales and use taxes to the Department. Also, Spin and Marty, in November 2005, did not file a return or pay sales and use taxes.

6. In a letter dated November 20, 2001, Spin and Marty was notified that the Department was going to audit its records. The Department received no response. In a letter dated April 3, 2002, Spin and Marty was again asked to contact the Department's auditor so a mutually agreed date could be set to conduct the audit. The Department received no response to this letter. The Department thereafter conducted an audit.

7. The result of the audit was a notice of proposed assessment which stated that Spin and Marty owed $146,044.74 in back taxes, penalties, and interest through September 4, 2002. Neither Spin and Marty, nor its principal, Mr. McNiff, contested the audit findings.

8. A letter from the Department addressed to "Dear Taxpayer," dated August 5, 2002, was received by Spin and Marty. This letter stated that the Department wished to arrange a meeting in its office for the purpose of reviewing the Notice of Intent to Make Audit Changes dated June 18, 2002. Spin and Marty did not avail itself of this opportunity.

9. Six tax warrants were filed with the Clerk of Court in Hernando County against Spin and Marty. These warrants indicate that as of the day of the hearing Spin and Marty owed

   $175,299.93 to the Department. This amount includes the actual tax due, or in the case of warrant 1000000029678, the estimated

   tax due, penalties, interest, and filing fees. Interest continues to accrue.

10. Pursuant to notice from the Department, on July 31, 2006, Theodore Faugno, who works for Mr. McNiff's CPA, and Mr. McNiff met with Debra B. Smith, a Revenue Specialist III with the Department.

11. Neither Mr. McNiff nor Mr. Faugno contacted Ms. Smith following the meeting. This resulted in the Administrative Complaint seeking to revoke Respondent's Certificate of Registration.

12. Mr. McNiff related that during the period he failed to submit returns and remit the taxes then due, he experienced adverse health issues and the unplanned birth of a baby. However, he was able to operate Spin and Marty and make a profit. It is indubitably concluded that he could have also reported and remitted the tax due, had he been so inclined.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. § 120.57(1), Fla. Stat.

14. Pursuant to Subsection 212.18(3)(a), "Every person desiring to engage in or conduct business in this state as a dealer . . . must file with the department an application for a certificate of registration for each place of business, showing

    the names of the persons who have interests in such business and their residences, the address of the business, and such other data as the department may reasonably require."

15. Pursuant to Subsection 212.18(3)(b), "The department, upon receipt of such application, will grant to the applicant a separate certificate of registration for each place of business, which certificate may be canceled by the department or its designated assistants for any failure by the certificateholder to comply with any of the provisions of this chapter." Spin and Marty received a Certificate of Registration as noted above.

16. Subsection 212.18(3)(b) further provides that no person shall engage in business as a dealer without having first obtained a Certificate of Registration and prohibits the operation of a business that does not have a Certificate of Registration.

17. Section 212.05 provides that a person is exercising a taxable privilege when that person is in the business of selling tangible personal property at retail. Spin and Marty were engaged in selling tangible personal property at retail.

18. Subsection 212.18(3)(d) provides that the Department may revoke a Certificate of Registration when a dealer fails to comply with the requirements of Chapter 212.

19. Prior to revoking a Certificate of Registration the Department must, in accordance with Subsection 212.18(3)(d),

    "schedule an informal conference at which the dealer may present evidence regarding the department's intended revocation or enter into a compliance agreement with the department. The department must notify the dealer of its intended action and the time, place, and date of the scheduled informal conference by written notification sent by United States mail to the dealer's last known address of record furnished by the dealer on a form prescribed by the department."

20. Subsection 212.18(3)(d), provides that, "The dealer is required to attend the informal conference and present evidence refuting the department's intended revocation or enter into a compliance agreement with the department which resolves the dealer's failure to comply with this chapter."

21. Subsection 212.18(3)(d), further provides that, "The department shall issue an administrative complaint under

    s. 120.60 if the dealer fails to attend the department's informal conference, fails to enter into a compliance agreement with the department resolving the dealer's noncompliance with this chapter, or fails to comply with the executed compliance agreement." As noted above, Spin and Marty did nothing to address the Department's efforts to address its noncompliance.

22. The failure to collect and remit the tax is a "failure to comply with the requirements of Chapter 212." The Department complied with the prerequisites for revocation set forth in

Subsection 212.18(3)(d). Accordingly, the Department may lawfully revoke the certificate of registration possessed by

Spin and Marty.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Revenue revoke Certificate of Registration No. 37-8012056472-7, held by Spin and Marty, Inc., d/b/a Crabbit's Pub.

DONE AND ENTERED this 7th day of February, 2007, in Tallahassee, Leon County, Florida.

S

HARRY L. HOOPER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 7th day of February, 2007.

COPIES FURNISHED:

Warren J. Bird, Esquire Office of the Attorney General The Capitol, Plaza Level 01

Tallahassee, Florida 32399-1050

Jarrell L. Murchison, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050

J. Bruce Hoffmann, General Counsel Department of Revenue

204 Carlton Building Post Office Box 6668

Tallahassee, Florida 32314-6668

James McNiff

Spin and Marty, Inc., d/b/a Crabbit's Pub

10050 Sleepy Willow Court Spring Hill, Florida 34608

James McNiff Crabbit's Pub

10513 Spring Hill Drive

Spring Hill, Florida 34608-5047

James Zingale, Executive Director Department of Revenue

The Carlton Building, Room 104 Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 06-004192

Orders for Case No: 06-004192