STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STAN MUSIAL & BIGGIE'S, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 75-1112

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on January 9, 1976, in Tampa, Florida.

By Order dated March 2, 1976, the undersigned granted the parties' motions to delay the rendition of her recommended order pending a final decision in the Florida Supreme Court case of Department of Revenue v. Leadership Housing, Inc. and Leadership Communities, Inc., Case No. ,47,400, and the submission of the parties' proposed orders in the instant case.

APPEARANCES

For Petitioner: Donald A. Pleasants

Shackleford, Farrior, Stallings and Evans Post Office Box 3324

Tampa, Florida 33601

Louis de La Parte, J.

725 East Kennedy Boulevard Tampa, Florida 33602

For Respondent: David M. Hudson

(Former) Assistant Attorney General Patricia S. Turner

Assistant Attorney General The Capitol

Tallahassee, Florida 32304

ISSUE

Broadly stated, the issue in this proceeding the validity of the proposed deficiency in petitioner's corporate income in the amount of $25,712.80 for the 1972 fiscal year. More specifically, the issue is whether Florida may lawfully tax for the gain it realized on the sale of securities in the of $941,418.00.

Included within this issue is the question of whether the apportionment formula set forth in Florida Statutes is applicable to petitioner.

FINDINGS OF FACT

1. Upon consideration of the pleadings, the stipulations the parties and the record in this proceeding, the following relevant During the calendar year 1972, petitioner was a foreign " Corporation subject to the Florida Corporate Income Tax, imposed Chapter 220, Florida Statutes. Petitioner also operated a business in St. Louis, Missouri.

   
   

2. January 1, 1972, petitioner held a 95 percent interest in Bal Harbour Joint Venture, which owned and operated the Ivanhoe Hotel and Restaurant in Bal Harbour, Florida. On December 15, 1972, petitioner was the sole owner of the Ivanhoe Hotel and Restaurant.

   
   

3. November 16, 1972, the petitioner acquired by merger 100 percent interest in the Clearwater Beach Hilton, a motel and restaurant business located in Clearwater, Florida, and continued to own this interest on December 31, 1972.

   
   

4. The Clearwater and Ivanhoe hotel and restaurant businesses in Florida and the petitioner's business in Missouri have separate, individual general managers. There is no central purchasing by the hotels and no centralized operating records are maintained by petitioner. There are no central reservation services available between the hotels and the hotels advertise separately and unilaterally in local publications in the cities in which they are located. No standardized product lines exist.

   
   

5. On November 2, 1972, petitioner sold certain securities which resulted in a realized gain to petitioner for federal income tax purposes of $941,418.00. Said securities were purchased, located and sold in the State of Missouri, and had no relationship to petitioner's Florida transactions.

6. Petitioner timely filed its 1972 Florida corporate income tax return on which it subtracted from its federal taxable income the gain realized from the sale of the securities. Its "Florida net income" and its "total tax due" were thus reported as "none."

   
   

7. On or about May 8, 1974, respondent advised petitioner of a proposed deficiency in petitioner's 1972 tax in the amount of

   $29,392.00. In accordance with the provisions of Florida Statutes Sec. 214.11, petitioner timely filed with respondent its protest of the proposed deficiency assessment. After a hearing, respondent issued to petitioner its Notice of Decision in which the proposed, deficiency was reduced to $25,712.80, and the reasons therefor were set forth. Petitioner requested reconsideration by respondent.

   
   

8. On March 11, 1975, the parties stipulated that further proceedings in this cause would be, processed under the Florida Administrative Procedures Act. The petition for hearing was forwarded by respondent to the Division of Administrative Hearings, the undersigned was duly assigned as the Hearing Officer.

   
   

   CONCLUSIONS OF LAW

   
   

9. As noted above, the prime issue in this case is whether the gain realized by petitioner from the sale of securities in another state on November 2, 1972, is taxable under Florida's corporate income tax code. At the hearing and in its petition, the petitioner has contended that the apportionment formula set forth in Florida Statutes Sec. 214.71 is not applicable to it, inasmuch as the petitioner's business is not unitary. In the alternative, petitioner argues that even if its business were unitary, the apportionment formula should not apply since it results in an arbitrary, unreasonable, and therefore unconstitutional Imposition of taxation in this case. Petitioner has urged that a monthly averaging formula, separate accounting, or some other equitable method of computation be applied to it for the year 1972. Finally petitioner contended that the capital upon which the assessment is based represents an unconstitutional tax on an accretion to value occurring prior to the effective date of the Florida corporate income tax law.

   
   

10. This later issue has recently been decided adversely to the petitioner's position in the Florida Supreme Court case of Department of Revenue v. Leadership Housing, Inc. and Leadership Communities, Inc., (case No. 44,440) So. 2d (Fla. 1977). There, the Court held that

    
    

    ". . . appreciation becomes income only upon the sale, exchange, or other dispo-

    sition of the capital asset together with the accretions thereto, and that such realized gain is income in the year of disposition regardless

    of when it accrued."

    
    

11. In response to petitioner's remaining three allegations, respondent contends that the Florida corporate income tax law provides that all items of income are to be subjected to the apportionment formulae provided by Florida Statutes 214.71 and 220.15(4), and that Florida, law does not provide for the allocation of particular items to the various states. It is submitted that there is no statutory requirement that a multistate corporation subject to the Florida tax be found to "be" "unitary" for, the apportionment formula to apply. Respondent contends that petitioner's restaurant and hotel businesses in Florida and Missouri are part of a unitary business and that imposition of the apportionment formula upon petitioner is not arbitrary, unreasonable or otherwise unconstitutional. Respondent suggests that if petitioner has been subjected to double taxation, relief is available to petitioner under the refund provisions of Florida Statutes Sec. 220.15(4).

    
    

12. The Florida corporate income tax code imposes upon corporations an excise or privilege tax measured by net income. Florida Statutes Sec. 220.11(2). A taxpayer's net income is defined to be that share of its adjusted, federal income which is apportioned to Florida under the provisions of Florida Statutes Sec. 220.15, less the annual exemption allowed by Sec. 220.14. Florida Statutes Sec. 220.12(1). Section 220.15 provides that adjusted federal income shall be apportioned to the State in accordance with Part IV of Florida Statutes Ch. 214, as the apportionment fraction described in Sec. 214.71 is modified in Sec. 220.15(4).

    
    

13. Part IV of Ch. 214 sets forth the methods of determining the extent of a taxpayer's tax base attributable to Florida. Florida Statutes Sec. 214.71, as modified by Sec. 220.15(4), sets forth the general method of apportionment except as otherwise provided in Sections. 214.72 and 214.73, and includes a three-factor formula. Florida Statutes Sec. 214.72 provides for the method of apportionment for certain special industries. And, Sec. 214.73 provides for other methods of apportionment. That section reads as follows:

    1. Apportionment; other methods.

       If the apportionment methods of Sections 214.71 and 214.72 do not fairly represent the extent of a taxpayer's tax base attributable to this state, the taxpayer may petition for, or the department may require, in respect to all or any part of the taxpayer's tax base, if rea- sonable:

       1. Separate accounting;

       2. The exclusion of any one or more factors;

       3. The inclusion of one or more additional . factors which will fairly represent the tax- payer's tax base attributable to this state; or

       4. The employment of any other method which will produce an equitable apportionment."

    
    

14. The undersigned has carefully considered the positions of counsel for the parties with respect to the applicability of Sec. 214.71 to the facts of this case. The parties have devoted a large part of their argument to the issues of whether or not the petitioner's business is a "unitary" one as defined in F.A.C. Rule 12C-1.15(4), or whether or not a finding of a "unitary" operation must be made before the apportionment formula described in Sec. 214.71 can be applied. These issues, while indeed interesting ones, do not appear to the undersigned to be dispositive of this case. Rather, the issue appears to be whether or not the apportionment method of Sec. 214.71 fairly represents the extent of a taxpayer's tax base attributable to Florida. This the language contained in Sec. 214.73, and the initial words of Sec. 214.71 are "Except as otherwise provided in sections 214.72 and 214.73. . ."

    
    

15. In implementation of Florida Statutes Sec. 214.73, respondent has promulgated Rule 12 C-1.15(6), F.A.C., which provides in part:

    
    

    ". . .Section 214.73 permits a - departure from the apportionment methods of Sections 214.71 and 214.72, only in limited and specific cases.

    Section 214.73 may be invoked only in specific cases where unusual fact situations (which ordinarily will be unique and nonrecurring) produce in- congrous results under the apportion- ment provisions contained in Sections 214.71 and 214.72."

16. It is conclusion of the undersigned Hearing Officer that the facts of this case entitle petitioner to invoke one of the other method of computation permitted by Florida Statutes Section

1. The capital gain realized by petitioner from the sale of its securities is totally unconnected with its Florida business. The gains in the amount of,$941,418.00 were the result of an isolated situation in which securities were purchased, held and sold in Missouri and constitute an element of income far removed from any contracts with the State of Florida. To totally and without modification include such gain would not fairly represent the extent of petitioner's tax base attributable to Florida. To apply to petitioner for the 1972 tax year the general method of apportionment set forth in Florida Statutes Section 220.15(.4), would produce an inequitable and unreasonable result. The provisions of Florida Statutes Section 214.73 are thus applicable to the facts of this case.

   
   

   RECOMMENDATION

   
   

   Based upon the findings of fact and conclusions of law recited above, it is recommended that:

   
   

   1. the proposed deficiency assessment in the amount of

      $25,712.80 be vacated and set aside; and

      
      

   2. The respondent permit petitioner to file an amended 1972 return utilizing, within the discretion of the respondent, the employment of either separate accounting, a monthly averaging formula or another method which would effectuate an equitable apportionment of petitioner's income to the State of Florida.

Respectfully submitted and entered this 8th day of August, 1977, in Tallahassee, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Donald A. Pleasants Shackleford, Farrior, Stallings

and Evans

Post Office Box 3324 Tampa, Florida 33601

Louis de la Parte, Jr.

725 East Kennedy Boulevard Tampa, Florida 33602

Patricia S. Turner Assistant General The Capitol

Tallahassee, Florida 32304

================================================================= AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION

DIVISION OF ADMINISTRATIVE HEARINGS

STAN MUSIAL & BIGGIE'S, INC.,

Petitioner,

vs. CASE NO. 75-1112

DEPARTMENT OF REVENUE,

Respondent.

/

FINAL ORDER OF DEPARTMENT OF REVENUE

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on January 9, 1976, in Tampa, Florida. By Order dated March 2, 1976, Ms. Tremor granted the parties' motions to delay the rendition of her Recommended Order pending a final decision in the Florida Supreme Court case of Department of Revenue v. Leadership Housing, Inc., Case No. 47,400, and the submission of the parties' proposed orders in the instant case.

APPEARANCES

For Petitioner: Donald A.' Pleasants, Esquire

Shackleford, Farrior, Stallings and Evans Post Office Box 3324

Tampa, Florida 33601

Louis de la Parte, Jr., Esquire 725 East Kennedy Boulevard Tampa, Florida 33602

For Respondent: David M. Hudson, Esquire

(Former) Assistant Attorney General Patricia S. Turner

Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32304 ISSUE

Broadly stated, the issue in this proceeding is the validity of the proposed deficiency in Petitioner's corporate income tax in the amount of $25,712.80 for the 1972 fiscal year. More specifically, the issue is whether Florida may lawfully tax Petitioner for the gain it realized on the sale of securities in the amount of $941,418.00. Included within this issue is the question of whether the apportionment formula set forth in Florida Statutes Section 214.71 is applicable to Petitioner.

FINDINGS OF FACT

Upon consideration of the pleadings, the stipulations of the parties and the record in this proceeding, the following relevant facts are found:

1. During the calendar year 1972, Petitioner was a foreign corporation subject to the Florida Corporate Income Tax imposed by Chapter 220, Florida Statutes. Petitioner also operated a business, Stan Musial & Biggie's Restaurant, in St. Louis, Missouri.

   
   

2. On January 1, 1972, Petitioner held a 95 percent interest in Bal Harbour Joint Venture, which owned and operated the Ivanhoe Hotel and Restaurant (Stan Musial & Biggie's) in Bal Harbour, Florida. On December 15, 1972, Petitioner was the sole owner of the Ivanhoe Hotel and Restaurant.

   
   

3. On November 16, 1972, the Petitioner acquired by merger a

   100 percent interest in the Clearwater Beach Hilton, a hotel and restaurant business located in Clearwater, Florida, and continued to own this interest on December 31, 1972. Petitioner operated a Stan Musial & Biggie's Restaurant in conjunction with this hotel.

   
   

4. The Clearwater and Ivanhoe hotel and restaurant businesses in Florida and the Petitioner's business in Missouri have separate, individual general managers. There is no central purchasing by the hotels. There are no central reservation

   services available between the hotels, and the hotels advertise separately and unilaterally in local publications in the cities in which they are located. No standardized product lines exist. A similar finding was not made by the Hearing Officer concerning the restaurant operations.

   
   

5. On November 2, 1972, Petitioner sold certain securities which resulted in a realized gain to Petitioner for federal income tax purposes of $941,418.00. Said securities were purchased, located and sold in the State of Missouri and had no relationship to Petitioner's Florida transactions.

   
   

6. Petitioner timely filed its 1972 Florida corporate income tax return on which it subtracted from its federal taxable income the gain realized from the sale of the securities. Its "Florida net income" and its "total tax due were thus reported as "none."

   
   

7. On or about May 8, 1974, Respondent advised Petitioner of a proposed deficiency in Petitioner's 1972 tax in the amount of

   $29,392.00. In accordance with the provisions of Florida Statutes Section 214.11, Petitioner timely filed with Respondent its protest of the proposed deficiency assessment. After a hearing, Respondent issued to Petitioner its Notice of Decision in which the proposed deficiency was reduced to $25,712.80, and the reasons therefor were set forth. Petitioner requested reconsideration by Respondent.

   
   

8. On March 11, 1972, the parties stipulated that further proceedings in this cause would be processed under the Florida Administrative Procedure Act. The petition for hearing was forwarded by Respondent to the Division of Administrative Hearings, and Diane D. Tremor was duly assigned as Hearing Officer.

   
   

9. The following operational data concerning Petitioner's restaurant and hotel/motel business, omitted from the Findings of Fact by the Hearing Officer, are hereby added to the Findings of Fact as pertinent to Petitioner's businesses. The data was extracted from federal and state tax returns and from the audit report determining the proposed Florida corporate income tax deficiency and are part of the record. See Exhibit "D" attached to Petitioner's Petition and Stan Musial and Biggie's Ivanhoe Hotel Federal Partnership Return attached to Petitioner's Answers to Interrogatories to Petitioner.

   STAN MUSIAL AND BIGGIE'S, INC. CALENDAR YEAR 1972

   
   

   FLORIDA INCOME SOURCE BAL HARBOUR		LOCATIONS CLEARWATER	ST. LOUIS MISSOURI
   Food Sales 540,914		49,750	908,145
   Beverage Sales		53,559	315,649
   Total Food & Beverage 540,914		103,309	1,223,794
   Room Sales 1,106,287		126,168	NONE
   Other Sales 97,177		NONE	NONE
   Total Sales 1,744,378 Add Clearwater 229,477 Total Florida 1,973,855		229,477	1,223,794 1,973,855
   Total Everywhere Ratio of Florida to Total .6172 Ratio of Missouri to Total.3827			3,197,649
   RESTAURANT AND HOTEL/MOTEL	FLORIDA	LOCATIONS	ST. LOUIS
   PROPERTY	BAL HARBOUR	CLEARWATER	MISSOURI
   At January 1, 1972	2,746,444	NONE	1,068,431
   At December 31, 1972	2,888,374	4,306,197	1,074,137

   Ratio at	January 1, 1972 Florida to Total	.7199
   	St. Louis to Total	.2800
   Ratio at	December 31, 1972 Florida to Total	.8700
   	St. Louis to Total	.1299

   
   

10. The following facts concerning Petitioner's Restaurant and hotel/motel businesses, omitted from the Findings of Fact by the Hearing Officer, are hereby added to the Findings of Fact as pertinent to Petitioner's business. The facts are part of the record and are contained in Petitioner's Proposed Findings of Fact and Conclusions of Law and Stan Musial and Biggie's Ivanhoe Hotel Federal Partnership Return attached to Petitioner's Answers to Interrogatories to Petitioner.

    
    

    The staff and on-site supervisory personnel of the Florida operations were under the direction and control of Petitioner's Vice President, Richard Musial. The Missouri staff and on-site supervisory personnel were under the direction of Petitioner's Vice President, Jack Garagrani. Stanley Musial, President and Chairman of the Board, determined and carried out overall policy. The restaurants were advertised as being one of several Stan Musial and Biggie's Restaurants.

    
    

11. The Hearing Officer's finding that there were no central operating records is not based upon substantial, competent

evidence and is hereby rejected. The record demonstrates that the Ivanhoe Hotel and/or the Clearwater Hilton Hotel furnished information or reports to the main offices of Petitioner concerning their business activities semiweekly in 1972. See Petitioner's Answers to Interrogatories to Petitioner, Answer No. 16(a).

CONCLUSIONS OF LAW

As noted above, the prime issue in this case is whether the gain realized by Petitioner from the sale of securities in another state on November 2, 1972, is taxable under Florida's corporate income tax code. At the hearing and in its petition, the Petitioner has contended that the apportionment formula set forth in Florida Statutes Section 214.71 is not applicable to it, inasmuch as the Petitioner's business is not unitary. In the alternative, Petitioner argues that even if its business were unitary, the apportionment formula should not apply, since it results in an arbitrary, unreasonable, and therefore unconstitutional imposition of taxation in this case. Petitioner has urged that a monthly averaging formula, separate accounting, or some other equitable method of computation be applied to it for the year 1972. Finally, Petitioner contended that the capital gain upon which the assessment is based represents an unconstitutional tax on an accretion to value occurring prior to the effective date of the Florida

corporate income tax law.

This latter issue has recently been decided adversely to the Petitioner's position in the Florida Supreme Court case of Department of Revenue v. Leadership Housing, Inc. and Leadership Communities, Inc., 343 So.2d 611 (Fla. 1977). There, the Court held that

. . . appreciation becomes income only upon the sale, exchange, or other dispo- sition of the capital asset together with the accretions thereto, and that such realized gain is income in the year of disposition regardless of when it accrued.

In response to Petitioner's remaining three allegations, Respondent contends that the Florida corporate income tax law provides that all items of income are to be subjected to the apportionment formulae provided by Florida Statutes Sections

214.71 and 220.15(4), and that Florida Law does not provide for the allocation of particular items to the various states.

Respondent contends that Petitioner's restaurant and hotel businesses in Florida and Missouri are part of a unitary business and that imposition of the apportionment formula upon Petitioner is not arbitrary, unreasonable or otherwise unconstitutional.

The Hearing Officer did not find it dispositive of the issue or relevant to determine whether Petitioner was engaged in a unitary restaurant business or a unitary restaurant and hotel/motel business, and, therefore, did not so find. Respondent nevertheless contends that the facts as set forth above establish that Petitioner is engaged in a unitary restaurant and/or a restaurant and hotel/motel business. Engaging in a unitary business, Petitioner's Florida tax base, which includes the gain on the sale of stock, is properly apportionable in accordance with the three-factor formula specified in Florida Statutes Section 214.71, as modified by Florida Statutes Section 220.15.

The Florida corporate income tax code imposes upon corporations an excise or privilege tax measured by net income. Florida Statutes Section 220.11(2). A taxpayer's net income is defined to be that share of its adjusted federal income which is apportioned to Florida under the provisions of Florida Statutes Section 220.15, less the annual exemption allowed by Section

1. Florida Statutes Section 220.12(1). Section 220.L5 provides that adjusted federal income shall be apportioned to the state in accordance with Part IV of Florida Statutes Ch. 214, as the apportionment fraction described in Section 214.71 is modified in Section 220.15(4).

   
   

   Part IV of Ch. 214 sets forth the methods of determining the extent of taxpayer's tax base attributable to Florida. Florida Statutes Section 214.71, as modified by Section 220.15, sets forth the general method of apportionment except as otherwise provided in Sections 214.72 and 214.73, and includes a three-factor formula.

   
   

   The three factors are (1) a property factor, (2) a payroll factor, and (3) a sales factor. Each of these factors is determined by dividing the property (payroll or sales) of the taxpayer owned, located or used in Florida by the taxpayer's property (payroll or sales) owned, located or used everywhere. Property and payroll factors are then multiplied by 25 percent, the sales factor is multiplied by 50 percent, and the sum of the three is the "apportionment factor." The apportionment factor is, in turn, multiplied by the taxpayer's adjusted federal income to yield the taxpayer's tax base, or "net income for the taxable year." The amount of tax liability is 5 percent of the "net

   income for the taxable year (less the $5,000 exemption provided by Florida Statutes Section 220.14).

   
   

   Section 214.72, Florida Statutes, provides for the method of apportionment for certain special industries. Section 214.73, Florida Statutes, provides for other methods of apportionment as follows:

   
   

   If the apportionment methods of Sec. 214.71 and 214.72 do not fairly represent the extent of a taxpayer's tax base attribu- table to this state, the taxpayer may petition for, or the department may require, in respect to all or any part

   of the taxpayer's base, if reasonable:

   1. Separate accounting;

   2. The exclusion of any one or more factors;

   3. The inclusion of one or more addi- tional factors which will fairly represent the taxpayer's tax base attributable to this state; or

   4. The employment of any other method which will produce an equitable appor- tionment.

In implementation of Section 214.73, Supra, Respondent promulgated, inter alia, Department of Revenue Rule 12C-1.15(6), Florida Administrative Code, which provides in pertinent part:

Section 214.73 permits a departure from the apportionment methods of Sections

214.71 and 2-14.72, only in limited and specific cases. Section 214.73 may be invoked only in specific cases where unusal fact situations (which ordinarily will be unique and nonrecurring) produce incongruous results under the apportion- ment provisions contained in Sections 214.71 and 214.72.""

Florida's corporate income tax code does not provide for the specific allocation of income items such as dividends, interest, royalties and gains on-the sale of securities and other capital assets to the domiciliary state, the state of situs, or the place of sale. The Legislature of the State of Florida deliberately elected full apportionment of all income. See Florida State

University Law Review, "An Introduction to Florida Corporate Income Taxation," Arthur J. England, Jr., p.. 17; and Roger Dean Enterprises, Inc. v. Department of Revenue, DOAH Case No. 76-2212, dated July 7, 1977.

Therefore, if the three-factor formula method specified in Section 214.71, Florida Statutes, fairly apportions Petitioner's tax base, the fact that Petitioner's tax base also includes income from a gain on the sale of stock or securities does not preclude use of the three-factor formula to apportion the gain.

Universally accepted corporate practice is to retain and to set aside from corporate earnings and profits a portion of such earnings and profits and to temporarily invest such retained earnings in the securities of other corporations. Set-aside funds or investments are available for general corporate purposes: to tide the corporation over loss years, to sustain or rescue divisions temporarily in financial trouble or to expand operations in the same or other fields. Therefore, it can only be concluded that under generally accepted corporate practices, sales proceeds from the sale of stock would be used to expand Petitioner's restaurant and hotel/motel business to Clearwater, Florida. These circumstances are commonplace, are neither unique nor nonrecurring and do not produce incongruous results. If they were not considered commonplace, every such sale of stock or other capital asset by an out-of-state corporate taxpayer would escape Florida taxation.

Additionally, Petitioner's dollar gross from its Florida restaurant and hotel/motel business exceeded the dollar gross from its Missouri restaurant business. The dollar cost of Petitioner's Florida property investment exceeded its Missouri investment. In these significant aspects, Florida clearly appears to be the predominant contributor to Petitioner's business. Florida seeks only an apportioned share determined by a formula universally judged as reasonable.

Application of the formulae `of Section 214.71 and 220.15(4), Florida Statutes, yields an apportionment factor of only approximately 0.57, based upon 82 percent property, 57 percent payroll, and approximately 45 percent sales located in and occurring in Florida in 1972 (Petition, Exhibit "D"). By subjecting only 57 percent of Petitioner's total net income (with proper adjustments) to taxation, application of Sections 214.71 and 220.15, Florida Statutes, does not produce an incongruous result to invoke the utilization of 214.73, Florida Statutes; is not an arbitrary, unreasonable, or an undue burden on

interestate commerce; and does not result in an unconstitutional imposition of taxation.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited above,

IT IS RECOMMENDED THAT:

The proposed deficiency assessment in the amount of

$25,712.80 be upheld.

CERTIFICATION

I CERTIFY, that the foregoing is the Final order of Department of Revenue adopted by the Governor and Cabinet on the 20th day of December, 1977.

Harry L. Coe, Jr., Executive Director State of Florida, Department of Revenue Room 102, Carlton Building

Tallahassee, Florida 32304

Dated this 22nd day of December, 1977.

Docket for Case No: 75-001112

Orders for Case No: 75-001112