STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORA E. COCKRELL, Personal )

Representative for John L. )

Cockrell, Deceased, )

)

Petitioner, )

)

vs. ) CASE NO. 79-257

)

OFFICE OF THE COMPTROLLER, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Daytona Beach, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on March 21, 1979. The parties were represented by counsel:

APPEARANCES

For Petitioner: J. Lester Kaney, Esquire, and

Robert Aylward, Esquire Post Office Box 191

Daytona Beach, Florida 32015

For Respondent: E. Wilson Crump, II, Esquire

Assistant Attorney General Post Office Box 5557 Tallahassee, Florida 32301

Petitioner applied to respondent for a refund in the amount of $11,690.11, a portion of the Florida estate tax and interest paid on account of the death of John L. Cockrell. When respondent proposed to deny this requisition for refund, petitioner sought an administrative hearing and the Office of Comptroller referred the matter here. Originally, petitioner also named the Department of Revenue as a party respondent. At the hearing, Mr. Crump, appearing specially on behalf of the Department of Revenue, moved that the Department of Revenue be dismissed as a party respondent on the grounds that the Office of the Comptroller could afford petitioner complete relief, if relief should be required. Appearing generally on behalf of the Office of Comptroller, Mr. Crump confirmed that the Office of Comptroller did have such authority. On the basis of these representations, the Department of Revenue was dismissed as a party to these proceedings.

FINDINGS OF FACT

1. The parties stipulated to the accuracy of the factual allegations in the petition, which are hereby incorporated by reference. A brief recapitulation may be helpful. John L. Cockrell died resident in Florida on

   September 26, 1977. For federal tax purposes, his gross estate was valued at

   $746,373.54. Securities held in trust by an Indiana bank, valued at $702,581.05 on the day Mr. Cockrell died, accounted for the bulk of his estate. Petitioner paid federal estate taxes in excess of the federal credit for estate taxes paid the several states, which credit amounted to $12,349.44. In response to an assessment by Indiana tax authorities, petitioner paid Indiana estate tax in the amount of $11,578.83. Petitioner paid Florida estate tax in the amount of

   $12,349.44, together with interest in the amount of $111.28.

   
   

   CONCLUSIONS OF LAW

   
   

2. Florida law imposes a tax on the transfer of the estate of which petitioner is personal representative in an amount

   
   

   equal to the amount by which the credit allowable under the applicable Federal Revenue Act for estate, inheritance, legacy and succession taxes actually paid to the several states shall exceed . . .

   [t]he aggregate amount of all constitution- ally valid estate, inheritance, legacy and succession taxes actually paid to [Indiana]

   Section 198.02, Florida Statutes (1977).

   
   

   In the present case, the "credit allowable" for purposes of Section 198.02, Florida Statutes (1977) is $12,349.44.

   
   

3. Citing Department of Revenue v. Golder, 326 So.2d 409 (Fla. 1976), petitioner argues that the amount of Indiana death taxes actually paid must be subtracted from the "credit allowable." While conceding that the federal constitution presents no bar to an estate tax by Indiana in the circumstances of the present case, Curry v. McCanless, 307 U.S. 357 (1) respondent contends that the Indiana death taxes, although actually paid, were not owing under Indiana law; and Cannot serve to reduce Florida taxes for that reason. See Wells v. Gay, 58 So.2d 690 (Fla. 1952). Petitioner answers that the death taxes paid to Indiana were indeed owed under Indiana Law.

   
   

4. Indiana law imposes an estate tax when "the federal death tax credit allowed against the federal estate tax . . . exceeds the total state death taxes actually paid IND. CODE s. 6-4.1-11-1(1976). Under Indiana law, "state death taxes" are defined to exclude "any tax which [like Florida's] is similar in purpose and character to the Indiana estate tax." IND. CODE s. 6-4.1-1- 12(1976). Respondent's argument otherwise is unpersuasive, in light of the interpretation the Indiana tax authorities have given to these Indiana statutes.

   
   

5. Conceding arguendo that, under Indiana estate tax law, estate taxes paid to Florida need not be subtracted from the federal death tax credit, respondent nevertheless maintains that IND. CODE s. 6-4.1-11-2(b)(1976) precludes collection of an estate tax by Indiana in the present case. This subsection prescribes an adjustment for estates of nonresident decedents and provides:

   
   

   In the case of a non-resident decedent, the Indiana estate tax equals the product of (1) the remainder described in subsec-

   tion (a) of this section, multiplied by (2)

   a fraction, the numerator of which is the value of the decedent's Indiana gross estate and the denominator of which is the value

   of the decedent's total gross estate.

   
   

6. Respondent takes the position that the securities held by the Indiana bank as trustee are not part of Mr. Cockrell's "Indiana gross estate" under Indiana law, because Mr. Cockrell was domiciled in Florida at the time of his death and has been deemed, for federal tax purposes, to have been the owner of the securities at that time. The situs of intangible personal property depends on the domicile of the owner of the property. The situs of intangible personal property does not turn, however, on the domicile of persons who have no more than an equitable interest in the property. It is the trustee, domiciled in Indiana, who has legal title to the securities in the present case. Again, respondent's argument to the contrary is unpersuasive, in light of the view the Indiana tax authorities have taken on this question of Indiana law.

   
   

7. To calculate petitioner's Florida tax liability, the "credit allowable" of $12,349.44 should be reduced by $11,578.83, the amount of estate tax paid to Indiana. This computation yields $770.61. Since petitioner paid respondent

$12,460.72, petitioner is entitled to a refund in the amount of the difference between $12,460.72 and $770.61.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That respondent refund to petitioner the sum of $11,690.11.

DONE and ENTERED this 11th day of April, 1979, 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:

J. Lester Kaney, Esquire and Robert Aylward, Esquire

Post Office Box 191

Daytona Beach, Florida 32015

E. Wilson Crump, II, Esquire Assistant Attorney General Post Office Box 5557 Tallahassee, Florida 32301

Docket for Case No: 79-000257

Orders for Case No: 79-000257