STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BUGS BUNNY II MARINA, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 79-386

) STATE OF FLORIDA, DEPARTMENT OF ) REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled case on 21 May 1979 at Tallahassee, Florida.

APPEARANCES

For Petitioner: Howard Stockfield, Esquire

Stockfield and Fixler

76 Brewster Avenue Carmel, New York 10512

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

Assistant Attorney General The Capitol

Tallahassee, Florida 32301

By letter dated February 15, 1979, as amended by pleading entitled More Definite Statement, Bugs Bunny II Marina, Inc., Petitioner, protests the sales tax assessed on the purchase of the F/V Bugs Bunny II by Petitioner. As grounds for relief from the assessed tax, Petitioner alleges that the transfer of the F/V Bugs Bunny II to Petitioner was an out of state transaction and was therefore exempt from the Florida Sales Tax. Petitioner also claims that the transaction is exempt from the use tax. One witness was called by Petitioner, one witness was called by Respondent and six exhibits were admitted into evidence. There is no material dispute regarding the facts except for the exact amount paid for the F/V Bugs Bunny II.

FINDINGS OF FACT

1. On 22 July 1977 James R. Rivers contracted to sell to John R. Hutchinson, Joan Hutchinson, Adrian Maxwell and Bugs Bunny Marina, Inc., the 65 foot F/V Bugs Bunny II for $113,323.29. (Exhibit 1). The price was comprised of a deposit of $1,500 upon acceptance of the contract, $13,500 at closing and purchasers to assume existing mortgage on the boat of approximately $98,323.29 held by Sun Bank of Volusia County.

2. In addition to the $1,500 down payment, two additional payments were made to Rivers in the amounts of $500 and $14,276.75. No evidence was presented that these payments included, or did not include, payments other than were due pursuant to the contract. (Exhibit 1).

   
   

3. This agreement to purchase was executed by the buyers in New York while the Bugs Bunny II was in Florida at the time the contract was executed, and it has remailed in Florida since that time.

   
   

4. The Bugs Bunny II has been used as a charter fishing boat and for commercial fishing both before and after its acquisition by Petitioner. It is registered by the U.S. Government and has been issued U.S. Coast Guard official No. 549866.

   
   

5. The parties stipulated that at closing, Rivers was not a registered dealer in Florida.

   
   

6. At closing, title to the Bugs Bunny II was taken in the name of Bugs Bunny Marina, Inc. a New York Corporation, registered to do business in New York.

   
   

7. By Assumption Agreement and Release the purchasers, jointly and severally, assumed and agreed to pay the mortgage indebtedness which as of June 23, 1977, was $98,323.29 and Rivers was released from further liability.

   
   

8. No sale or use tax was collected by seller or paid by the buyers for this transaction.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of these proceedings.

   
   

10. Section 212.05, Florida Statutes, in providing for the imposition of a sales tax states:

    
    

    Sales, storage, use tax.- It is hereby declared to be the legislative intent that every person is exercising a taxable privilege who engages in the business of selling tangible personal property at re- tail in this state, or who rents or furnishes any of the things or services taxable under this chapter, or who stores for use or consumption in this state any item or article of tangible personal pro- perty as defined herein and who leases or

    rents such property within the state. For the exercise of said privilege a tax is levied on each taxable transaction or inci- dent and shall be due and payable, according to the brackets set forth in s. 212.12(10), as follows:

    (1)(a) At the rate of 4 percent of the sales price or article of tangible personal property when sold at retail in this state; the tax to be computed on each taxable sale for the

    purpose of remitting the amount of tax due the state, and to include each and every re- tail sale.

    
    

11. Section 212.02(2), Florida Statutes, defines a "sale" to include:

    
    

    1. Any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever, of any tangible property for a consideration.

       
       

12. Here there was transfer of both title and possession of tangible property, to wit: the Bugs Bunny II for a consideration. At the time of this sale the boat was located in Florida, delivery took place in Florida, and the boat has remained in and has been used in Florida since the Petitioner acquired ownership.

    
    

13. Even if it could be held that, despite the delivery of the property subject to tax in Florida, the "sale" occurred outside this state, the subsequent use of the Bugs Bunny II in this state would subject the transaction to a use tax unless exempted by some provision of the statute.

    
    

14. Section 212.05(1)(b), Florida Statutes, specifically provides that such a transaction as was here involved is taxable by stating:

    
    

    Occasional or isolated sales of boats and other vehicles in this state which are docu- mented by the U.S. Government and which are required to be registered, licensed, or titled in this state shall be subject to

    tax at the rate provided in this subsection

    . . .

    This section shall not apply to the sale of a boat by or through a registered dealer under this chapter to a purchaser who removes such boat from this state within 10 days after the date of purchase or, when the boat is repaired or altered, within 10 days after

    the completion of such repairs or alterations. In no event shall the boat remain in the state more than 90 days after the date of purchase

    . . .

    
    

15. This isolated sale was not made by a dealer, the boat was not removed from this state, and no basis for an exemption from the sales tax was shown. Even if such an exemption from sales tax could be found, the continued use of the boat in this state would bring into play the use tax which applies to tangible property purchased outside the state and brought into the State of Florida for use.

From the foregoing it is concluded that the sale of the F/V Bugs Bunny II from Rivers to Bugs Bunny Marina occurred in Florida, the sales price was

$113,323.29 and that sales tax on this sum was due and payable at closing in August 1977. It is further concluded that Petitioner owes penalty and interest since the date of closing as prescribed by statute. It is therefore

RECOMMENDED that petition for relief from sales tax, based upon a sale price of $113,323.29, penalties and interest on the sale and purchase of the F/V Bugs Bunny II be denied.

ENTERED this 13th day of June, 1979, in Tallahassee, Florida.

COPIES FURNISHED:

Cecil L. Davis, Jr., Esquire Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32301

Howard F. Stockfield, Esquire

76 Brewster Avenue Carmel, New York 10512

K. N. AYERS Hearing Officer

Division of Administrative Hearings

101 Collins Building 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Docket for Case No: 79-000386

Orders for Case No: 79-000386