STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ARTHUR ZOELFEL and LISA ZOELFEL, )

)

Petitioner, )

)

vs. ) CASE NO. 77-1504

)

DEPARTMENT OF REVENUE and )

OFFICE OF THE COMPTROLLER, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Fort Lauderdale, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on February 23, 1978. The parties were represented by counsel:

APPEARANCES

For Petitioner: Mr. Thomas E. Hunt, Esquire

Suite 302, Building 2 3020 North Federal Highway

Fort Lauderdale, Florida 33306

For Respondent: Mr. Cecil L. Davis, Jr., Esquire

Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32304

By notice of proposed assessment dated July 13, 1977, respondent Department of Revenue (DOR) asserted that petitioners owed sales tax in the amount of five thousand dollars ($5,000.00) on account of the purchase of the yacht Superior Queen. The notice acknowledges receipt of forty-five hundred dollars ($4,500.00) and claims a balance due of five hundred dollars ($500.00). By petition for administrative hearing dated August 16, 1977, petitioners asked that the assessment be denied and that the forty-five hundred dollars ($4,500.00) they had paid be rebated to them.

FINDINGS OF FACT

1. On May 29, 1977, petitioner Artur Zoelfel entered into a written agreement to buy the yacht Superior Queen from H-E-R Leasing Corporation "for the total sum of $125,000.00 (one hundred, twenty-five thousand dollars)." Petitioners' exhibit No. 1. H-E-R Leasing Corporation is not a licensed or registered dealer in Florida. An addendum to the contract, dated May 30, 1977, was signed by Artur Zoelfel but was not signed by anybody on behalf of H-E-R Leasing Corporation. Petitioners' exhibit No. 2.

2. On June 16, 1977, an assistant secretary for maritime affairs in the United States Department of Commerce entered an order, No. MA-15079, approving the sale of the Superior Queen to "Artur Zolfel, a West German citizen, and the transfer of said vessel to Federal Republic of Germany registry and flag . . . upon the condition that there shall be no liens or encumbrances recorded against such vessel . . . at the time of its transfer . . ." Petitioners' exhibit No. 2.

   
   

3. On June 27, 1977, an anonymous telephone caller told Bernard Frank Fox, respondent DOR's area supervisor in Broward County, that petitioner had bought the Superior Queen. As the result of investigation by other employees of respondent DOR, Mr. Fox concluded that this information was correct and set in motion events that culminated, on June 30, 1977, in a levy on the Superior Queen by the Broward County sheriff's office. At that time, respondent DOR claimed that fifty-two hundred dollars ($5,200.00) in tax was owed, on the assumption that the Zoelfels had paid the asking price for the Superior Queen, which had purportedly been one hundred thirty thousand dollars ($130,000.00).

   
   

4. After the levy, one Paul C. Mueller approached Mr. Fox on behalf of Mr. and Mrs. Zoelfel and represented to Mr. Fox that petitioners had purchased the Superior Queen for one hundred twelve thousand five hundred dollars ($112,500.00). On that basis respondent DOR accepted forty-five hundred dollars ($4,500.00) in satisfaction of its claim for tax, and the sheriff released the Superior Queen.

   
   

5. As reflected by the bill of lading, petitioners exhibit No. 4, on August 2, 1977, petitioner Artur Zoelfel caused the Superior Queen to be loaded onto a freighter, M/S Finn Enso, in Tampa, Florida, bound for Hamburg, West Germany. Neither of the petitioners is a licensed exporter.

   
   

   CONCLUSIONS OF LAW

   
   

6. Section 212.05, Florida Statutes (1977), levies a tax "[a]t the rate of

   4 percent of the sales price of each item or article of tangible personal property when sold at retail in this state . . ." Section 212.05(1)(a), Florida Statutes (1977). Specifically included are "[i]solated sales of boats," Section 212.05(1)(b), Florida Statutes (1977), although such sales may in some cases be exempt when the sale is "by or through a registered dealer under," id., Chapter 212, Florida Statutes (1977). This exemption is not available in the present case because H-E-R Leasing Corporation was not a registered dealer under Chapter 212, Florida Statutes (1977), at the time it sold the Superior Queen to petitioners.

   
   

7. Petitioners contend that the sale of the Superior Queen should be exempt from tax on account of Section 212.06 (5)(a), Florida Statutes (1977), which provides, in pertinent part:

   
   

   It is not the intention of this chapter

   to levy a tax upon tangible personal prop- erty imported, produced or manufactured

   in this state for export, provided that tangible personal property shall not be considered as being imported, produced or manufactured for export unless the

   importer, producer or manufacturer delivers the same to a licensed exporter for export- ing, or to a common carrier for shipment

   outside the state or mails the same by United States mail to a destination outside the state. . .

   
   

   Although the Superior Queen was delivered "to a common carrier for shipment outside the state," it was so delivered by petitioners after they had purchased it, not by "the importer, producer or manufacturer." Even if H-E-R Leasing Corporation could qualify as an importer, it made delivery to petitioners, not to a licensed exporter, a common carrier or to the United States mail. See also Rule 12A-1.64, F.A.C.

   
   

8. Finally, citing State ex rel. Sunair Electronics, Inc. v. Green, 177 So.2d 490 (Fla. 1st DCA 1965), cert. den. sub nom. Green v. State ex rel. Sunair Electronics, Inc., 180 So.2d 464 (Fla. 1965), petitioners argue that application of Section 212.05, Florida Statutes (1977), to the sale of the Superior Queen is repugnant to the United States Constitution, Art. I, s. 10, C1.2, which forbids the States to "lay any Impost or Duties on Imports or Exports . . . ." Because the Division of Administrative Hearings is part of the executive branch of state government, a Hearing Officer does not have the authority to declare a statute unconstitutional, either on its face or as applied. Petitioners, having made a record in this proceeding, are now free, however, to address this argument to the judiciary whose province it is to decide whether statutes comport with the state and federal constitutions.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That the notice of assessment be upheld.

DONE and ENTERED this 17th day of March, 1978, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

Mr. Thomas E. Hunt, Esquire Suite 302, Building 2

3020 North Federal Highway

Fort Lauderdale, Florida 33306

Mr. Cecil L. Davis, Jr., Esquire Assistant Attorney General

The Capitol, Room LL04 Tallahassee, Florida 32304

Docket for Case No: 77-001504

Orders for Case No: 77-001504