STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EUGENE J. HOWARD and HERBERT ) SEIDEL, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1218

)

DEPARTMENT OF REVENUE, )

STATE OF FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to Notice and following assignment of this matter to the Division of Administrative Hearings, Department of Administration, by the Respondent, Department of Revenue, upon Petition of the Petitioners, Eugene J. Howard and Herbert Seidel, this cause came to be heard before Delphene C. Strickland, Hearing Officer, Division of Administrative Hearings, Department of Administration, in Hearing Room 103, Collins Building, Tallahassee, Florida on April 30, 1976, at 10:30 a.m.

APPEARANCES

For Petitioner: Eugene J. Howard, Esquire

2212 Biscayne Boulevard

Miami, Florida 33137

For Respondent: Harold F. X. Purnell

Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32304 ISSUE

1. Whether additional documentary stamp tax and surtax stamps are due on a warranty deed dated July 9, 1973 to Eugene Howard and Herbert Siedel from Floyd

   L. Lewis and Michael Lewis.

   
   

2. Whether penalties should be assessed?

FINDINGS OF FACT

1. By warranty deed dated July 9, 1973, Floyd L. and Michael Lewis conveyed the fee simple title to certain realty in North Miami Beach to Petitioners Eugene J. Howard and Herbert Seidel. The purchase price for the property was $405,000. The property sold consisted of a twenty-two (22) unit apartment building with twenty (20) furnished apartments and included storage shed, a pool, patio and dock furniture.

2. The closing statement signed by the sellers and purchasers stated: "Florida documentary stamps - on deed - $1,215.00, Florida documentary surtax - on deed - $132.20." $1,347.20 was credited to the Petitioners Howard and Seidel.

   
   

3. Petitioners actually paid $10.85 surtax and $132.20 documentary tax.

   
   

4. The 1974 tax assessment of the Dade County Property Appraiser for the property was $241,769.00 realty and $14,500.00 for the personalty.

   
   

   Petitioner contends:

   
   

   1. That part of the purchase price was applicable to -personal property.

      
      

   2. That the Hearing Officer should make an allocation of the realty included and an allocation for the personalty included.

      
      

   3. That the Petitioners believe they are entitled to the equitable defense of laches in that the Respondent did not advise Petitioners of the possible error of miscalculation until approximately two years had passed.

      
      

   4. That if the stamp tax is found to be due and if a penalty is included, the penalty is "excessive penalty" under the Eighth Amendment of the Constitution of the United States of America, and Article I, Section 17, of the Florida Constitution.

   
   

   Respondent contends:

   
   

   1. That there was an agreement between the Parties, in a signed document that $1,215 in documentary stamps and $132.20 in surtax stamps, reflecting the actual consideration paid for the realty under consideration, would be affixed to the conveyance.

      
      

   2. That Petitioners failed to fulfill such a an agreement and affixed

      $132.20 in documentary stamps and $10.85 in surtax stamps to the deed. .

      
      

   3. That the Department is entitled to the delinquent taxes plus penalty.

      
      

   4. That the assessment is dated July 9, 1975 and a three- year statute of limitations is applicable.

   
   

5. The Hearing Officer further finds:

   
   

   1. The purchase price for the property under consideration was $405,000. Documentary stamps required on such a purchase were $1,215.; that stamps actually paid were in the amount of $132.20, that $10.85 was actually paid and still due and owing is $121.35.

      
      

   2. That the Petitioners as well as the Sellers were aware of the proper amount of tax due and signed a receipt reflecting the monies allocable for documentary and surtax stamps.

      
      

   3. That the Petitioners failed either intentionally or negligently to pay the proper amount of documentary and surtax stamps at the time of recording the deed.

   CONCLUSIONS OF LAW

   
   

6. Section 201.02(1), F.S., states in pertinent part:

   
   

   "On deeds, instruments, or writings whereby any - lands, tenements, or other realty, or any inter- est therein, shall be granted, assigned, trans- ferred, or otherwise conveyed to, or vested in the purchaser, or any other person by his direc- tion, on each one hundred dollars of the consid- eration there for the tax shall be thirty cents

   
   

7. Documentary stamp tax as contended by Respondent is due on the deed under consideration, the purchase price being $405,000. The tax is to be determined by the form and the face of the instruments involved. See Lee v. Kenan, 78 F.2d 425 (5th Cir. 1935), cert. den., 296 U.S. 637; State v. McCoy Motel, Inc., 302 So.2d 440 (1 DCA Fla. 1974); Choctawatchee Elect. Coop., Inc.

   v. Green, 369 U.S. 829; Maas Brothers, Inc. v. Dickinson, 195 So.2d 193; Metropolis Publishing Co. v. Lee, 170 So. 442.

8. Section 201.021. (1), F.S. states in pertinent part: "A documentary surtax, in addition to the tax

   levied in 201.02, is levied on those documents

   taxed by sec. 201.02 at the rate of fifty-five cents per five hundred dollars of the consideration

   paid; provided, that when real estate is sold, the consideration, for purposes of this tax, shall not include amounts of existing mortgages on the real estate sold

   
   

9. The surtax as contended by Respondent is proper and the amount reflects existing mortgage indebtedness.

   
   

10. Section 201.17, F. S., states:

    
    

    "Penalties for failure to pay tax required. -

    
    

    1. Whoever makes, signs, issues, or accepts, or causes to be made, signed, issued, or accepted, any instrument, document or paper of any kind or description whatsoever, without the full amount

       of the tax herein imposed thereon being fully paid, or whoever makes use of any adhesive stamp to denote

       any tax imposed by this chapter without cancelling or obliterating such stamps as herein provided, shall be guilty of a misdemeanor of the second

       degree, punishable as provided in S775.082 or 775.083.

    2. Any document, instrument, or paper upon which

       the tax under this chapter is imposed and which, upon audit or at time of recordation, does not bear the proper value of stamps shall subject the person or persons liable for the tax upon the document, instrument or paper to:

       
       

       1. Purchase of the stamps not affixed; and

          
          

       2. Payment of penalty to the Department of Revenue equal to the purchase price of the stamps not affixed. This penalty is to be in addition to and not in lieu of any other penalty imposed by law."

          
          

11. It is apparent that the Petitioners are subject to the documentary and surtax on the subject document and to the penalties under the Statute. The evidence adduced at the hearing fails to show that the Petitioners were ignorant of their obligation to timely pay the required tax. The contentions of petitioners are therefore without merit.

RECOMMENDATION

Assess the documentary stamps and the documentary surtax against Petitioners together with applicable penalties.

DONE and ORDERED this 9th day of July, 1976, in Tallahassee, Florida.

DELPHENE C. STRICKLAND

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Eugene J. Howard, Esquire 2212 Biscayne Blvd.

Miami, Florida 33137

Harold F. X. Purnell, Esquire Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32304

Docket for Case No: 75-001218

Orders for Case No: 75-001218