STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARINE FUEL SUPPLY 7 TOWING, ) INC.; S. BONANNI SHIP SUPPLY, ) INC.; BONANNI EXPORTS, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 77-033

)

STATE OF FLORIDA, )

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on December 5, 1977, in St. Petersburg, Florida.

APPEARANCES

For Petitioner: Robert F. Nunez, Esquire

Post Office Box 12726

St. Petersburg, Florida 33733

For Respondent: Cecil Davis, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32304

1. Counsel for Marine Fuel Supply & Towing, Inc., S. Bonanni Ship Supply, Inc., and Boanni Exports, Inc., (Petitioners) filed the instant petition challenging the Department of Revenue (Respondent) assessment against Petitioners of certain alleged delinquent sales and use taxes on various sales and/or purchases of tangible personal property during the period August 1, 1973 through July 1, 1976. The thrust of the petition is that certain of the sales and/or purchases on which taxes have been assessed were made to or from vessels of foreign registry destined for foreign ports and/or which were licensed as common carriers by the Interstate Commerce Commission; or that assessments were made from sales and purchases on which taxes have been assessed which were wholesale sales and purchases which pursuant to the 1977 revision of Chapter 212, Florida Statutes, said sales and/or purchases were exempted retroactive to June 22, 1973. Prior to the enactment of Chapter 73-240, Laws of Florida (1), sales and/or purchases of vessels engaged in interstate or foreign commerce were not taxed by Respondent. Petitioner introduced a letter from the Acting Chairman of the Senate Finance, Taxation and Claims Committee and from the Chairman of the House Finance and Taxation Committees essentially pointing out that the retroactive taxation of vessels engaged in interstate or foreign commerce came about by erroneous language inserted in Chapter 73-240 when it was

   sent for technical, nonsubstantive drafting by the house bill drafting service which deleted a portion of the bill expressing the "intent that the department should not collect back taxes for the period 1973 to 1977". This reference was not included in the bill which was passed by the legislature during the 1977 regular session. (Petitioner's Exhibit 1)

   
   

2. Serge Bonanni, President of the three corporations involved here, testified that during conferences with his attorney, he understood that the subject taxes would not be assessed retroactively in view of the revisions made during the 1977 legislative session. He testified that there is no dispute with respect to the taxes and assessments for ships which move in intrastate waters.

   
   

3. Ralph McKay, a tax examiner employed by Respondent, audited Petitioners' books during August, 1973 through July 1976 and based on Respondent's second revised notice of proposed assessment, Marine Fuel Supply & Towing, Inc., was assessed a total of Five Thousand Ninety-Nine Dollars and Thirty-One Cents ($5,099.31) and S. Bonanni Ship Supply, Inc., was assessed a total of Twenty-Eight Thousand Seventy-One Dollars and Sixty-Seven Cents ($28,071.67) [See Respondent's Exhibits 1 & 2]. Messr. McKay conducted the audit based on records supplied and the assessments were adjusted and issued after registry affidavits and resale certificates were considered. Respondent introduced testimony with respect to the difficulty it encountered obtaining foreign registry and resale certificates from numerous ships which it supplied. The Petitioner introduced no evidence contesting the accuracy of the audit examinations conducted by Respondent's agents.

   
   

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action, Chapter 120.57(1), F.S.

   
   

5. The authority of the Respondent is derived from Chapter 212, Florida Statutes.

   
   

6. The burden of establishing that certain sales transactions as are involved here are exempt rests with the person (entity) seeking the exempt status. See Chapter 212, Florida Statutes and Rule 12A-1.38, F.A.C. In this regard, Petitioner failed to establish the exempt status of the transactions involved herein.

   
   

7. Statutes are presumed to be prospective in application unless the legislature manifest an intention to the contrary. See for example Fleeman v Case, 342 So.2d 815 and Keystone Water Company v Bevis, 278 So.2d 606(Fla. 1973). In view thereof, Respondent's petition herein to discern an intent for retroactive application must be denied since there is no legislative declaration of retroactive application contained in the 1977 amendments to Chapter 212, F.S. Our function here is to uphold the existing laws as enacted.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law I hereby recommend that the Petitioner's challenge to the Department's determination of sales taxes due herein pursuant to Chapter 212, Florida Statutes, be denied and that the revised assessment notices be upheld as issued.

RECOMMENDED this 17th day of January, 1978, in Tallahassee, Florida.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

COPIES FURNISHED:

Cecil Davis, Esquire Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32304

Robert F. Nunez, Esquire Post Office Box 12726

St. Petersburg, Florida 33733

Mercer Farrington, Esquire Post Office Box 1548 Tallahassee, Florida 32302

Docket for Case No: 77-000033

Orders for Case No: 77-000033