STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEON F. BISHOP and his wife, ) DOROTHY M. BISHOP, )

)

Petitioner, )

)

vs. ) CASE NO. 78-801

) 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 September 11, 1979, in Crestview, Florida.

APPEARANCES

For Petitioners: Gillis E. Powell, Jr., Esquire

Post Office Box 277 Crestview, Florida 32536

For Respondent: Barbara Staros Harmon, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32301 ISSUE

At issue herein is whether or not the Petitioners are lawfully obligated to pay a proposed assessment issued by Respondent in the amount of $871.24 in taxes, penalty and interest (as of October 18, 1977) based on a land conveyance subject to a documentary stamp tax pursuant to Chapter 201, Florida Statutes, and Rule 12A-4.12(2)(e), Florida Administrative Code.

FINDINGS OF FACT

Based upon the witnesses' testimony and the documentary evidence received herein, the following relevant facts are found.

1. During December of 1977, an agreement was entered into between W. C. Brown and Tommy Bishop for the purchase/sale of 480 acres of land in Northeast Walton County for a total purchase price of $240,000. Pursuant to that agreement, Tommy Bishop agreed to assume $170,000 of a mortgage which was held by the Federal Land Bank Board and a note for $50,000 to W. C. Brown, payable in ten (10) annual installments plus a $20,000 cash payment upon receipt of which the purchaser, Tommy Bishop, could take possession of the parcel in question.

   (Petitioners' Composite Exhibit A). By warranty deed dated September 14, 1976, the subject parcel was transferred from the Browns to Tommy and Betty M. Bishop. (Respondent's Composite Exhibit A.)

   
   

2. On or about March 16, 1977, Tommy Bishop and his wife transferred the subject parcel of land to his father, Leon F. Bishop, and his wife, Dorothy M. Bishop. A quit claim deed was executed and was recorded in the Official Records of Walton County at Book 119, page 181. (Respondent's Exhibit B.) It is this quit claim deed that is the focus of this Petition.

   
   

3. Petitioner, Leon F. Bishop, contends that he purchased the subject tract of land from the Browns and gave it to his son as a means to encourage him to settle down and assist him in the farming and cattle operation, without success. Petitioner contends that he alone was principally obligated to make all the payments necessary to satisfy the obligation to the seller, and that at no point was his son, Tommy Bishop, ever obligated to make any payments on the obligation. Petitioner testified that he endorsed the notes and made all payments to the Federal Home Loan Bank Board and to the Bank of Florala, Alabama.

   
   

4. Although it is true that the documents received evidence that the Petitioner satisfied the obligations necessary to consummate the purchase of the subject parcel of land, until the quit claim deed executed on March 16, 1977, was entered into between his son and himself, the son was equally obligated to satisfy the obligations. Hover, once the quit claim deed was executed, there was a shift in the economic burden and, as such, a taxable transfer occurred on the quit claim deed, creating a documentary tax obligation authorized pursuant to Section 201.02, Florida Statutes. Also, see Rule 12A-4.12(2), Florida Administrative Code.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Subsection 120.57(1), Florida Statutes.

   
   

6. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.

   
   

7. The authority of the Respondent is derived from Chapter 201, Florida Statutes, and Rule 12A-4, Florida Administrative Code.

   
   

8. Competent and substantial evidence was offered to establish that the proposed assessment for documentary stamp tax, penalty and interest should be sustained. Department of Revenue v. De Maria, 338 So.2d 838.

RECOMMENDATION

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

RECOMMENDED:

That the Department of Revenue's proposed assessment filed herein be upheld.

ENTERED this 26th day of October, 1979, in Tallahassee, Florida.

JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Gillis E. Powell, Esquire John D. Moriarty, Esquire Post Office Box 277 Department of Revenue Crestview, Florida 32536 Room 103, Carlton Building

Tallahassee, Florida 32301

Barbara Staros Harmon, Esquire Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32301

Docket for Case No: 78-000801

Orders for Case No: 78-000801