STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GOLD STAR DELICACY SHOP, INC., )

a Florida corporation, )

)

Petitioner, )

)

vs. ) CASE NO. 79-1127RX

) STATE OF FLORIDA, DEPARTMENT ) OF REVENUE, )

)

Respondent. )

)

FINAL ORDER

This is an action pursuant to Section 120.56, Florida Statutes (1979), wherein Petitioner seeks an administrative determination of the invalidity of Rule 12A-1.11(1), Florida Administrative Code, a rule of the Department of Revenue.

APPEARANCES

For Petitioner: Mark J. Wolff, Esquire

SHARBER, SHEVIN, ET AL.

30th Floor, First Federal Building One Southeast Third Avenue

Miami, Florida 33131

For Respondent: Linda C. Procta, Esquire

Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301

FINDINGS OF FACT

Having considered all testimony, evidence, and argument of counsel, the Hearing Officer finds the following:

1. Petitioner is a corporation organized and existing under the laws of Florida with its sole place of business located at 6186 S.W. 8th Street, Miami, Florida. Petitioner operates a delicatessen and restaurant in the same building at the above location.

   
   

2. Petitioner's restaurant prepares food to be served to paying customers who consume that food at tables provided in the restaurant for that purpose. This food is served by waiters and waitresses who prepare guest checks which separately indicate the amount of sales tax charged thereon.

   
   

3. Petitioner's delicatessen sells unprepared food to customers who do not consume that food on the premises and for whom no eating facilities are provided. A common cash register serves the two facilities, which cash register

   has a separate key or the sale of delicatessen items, and a separate key for the sale of restaurant items. The restaurant and delicatessen occupy the same general space and are not separated by a wall or other physical barrier.

   
   

4. Petitioner collects sales tax for those items sold in the restaurant portion of the business and does not collect sales tax on those items sold in the delicatessen portion of the building. Petitioner regularly maintains separate and distinct records sufficient for an allocation between restaurant sales and delicatessen sales.

   
   

5. On March 12, 1979, Respondent issued a proposed sales and use tax delinquency assessment against Petitioner in the amount of $40,018.14. This assessment was based upon the total sales revenue generated by both of Petitioner's enterprises and did not allocate sales revenue between the delicatessen portion of the business and the restaurant portion of the business. On May 10, 1979, the Respondent issued a revised proposed sales tax delinquency assessment against Petitioner in the amount of $33,259.20. This revised assessment was based upon the total sales revenue generated by both of Petitioner's separate enterprises and did not allocate sales revenue between the delicatessen portion of the business and the restaurant portion of the business.

   
   

6. This assessment by Respondent against Petitioner was based, at least in part, upon Rule 12A-1.11(1), Florida Administrative Code.

   
   

7. Petitioner holds a restaurant license from the State of Florida, Division of Hotels and Restaurants. Petitioner also holds a retail sales license from Dade County for its delicatessen operation.

   
   

8. Rule 12A-1.11, Florida Administrative Code, was adopted, pursuant to a public hearing.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over this cause.

   
   

10. Rule 12A-1.11, Florida Administrative Code, is a rule, as defined by Section 120.52(14), Florida Statutes (1979).

    
    

11. Petitioner is substantially affected by the challenged rule.

    
    

12. The only challenge to the procedural sufficiency of the subject rule dealt with whether the requirements of Section 120.72(4), Florida Statutes (1979), had been met. It is concluded that those requirements were met.

    
    

13. The Florida Administrative Procedure Act in Section 120.56(1), Florida Statutes (1979), provides that any person substantially affected by a rule may seek an administrative determination of the invalidity of that rule on the ground that it is ". . . an invalid exercise of delegated legislative authority." It is further a matter of law in Florida that no agency has inherent rule-making authority. Section 120.54(14), Florida Statutes (1979).

    
    

14. Subsection 212.17(6), Florida Statutes (1979), provides that the Department of Revenue ". . . shall have the power to make, prescribe and publish reasonable rules . . . not inconsistent with [Chapter 212, Florida Statutes] . .

    . for the enforcement of the provisions of [Chapter 212, Florida Statutes] and the collection of revenue [thereunder]." Subsection 212.18(2), Florida Statutes

    (1979), provides that the Department of Revenue ". . . is authorized to make and publish such rules and regulations not inconsistent with [Chapter 212, Florida Statutes], as it may deem necessary in enforcing its provisions . . . ." Thus, it is apparent on the face of the law that the Department of Revenue has been granted by the Legislature the authority to adopt rules with regard to matters set forth in Chapter 212, Florida Statutes.

    
    

15. Subsection 212.08(1), Florida Statutes (1979), states that "[t]here shall be exempt from the tax imposed by this chapter foods and drinks for human consumption . . . ." It goes on to state that "foods and drinks" does not mean

    
    

    Foods and drinks served, prepared, or sold in or by restaurants, drug stores, lunch counters, cafeterias, hotels, or other like places of business or by any business or place required by law to be licensed by the Division of Hotels and Restaurants of the Department of Business Regulation . . . .

    
    

    Section 212.08(1)(a), Florida Statutes (1979).

    
    

    The rules challenged herein, Rule 12A-1.11(1), Florida Administrative Code, appears to be an implementation of the foregoing statute. After listing meals and other specific foods, it finds that when they are

    
    

    . . . served, prepared or sold in or by restaurants, drug stores, lunch counters, cafeterias, hotels,

    or other like places of business, including vending machines, or by any business or place required by law to be licensed by the Division of Hotels and Restaurants of the Department of Business Regulation . . . [such meals and foods are taxable].

    
    

    The requirements of this rule, as challenged, appear consonant with the requirements of the statute. The rule, by listing "meals" and certain other foods, such as milk and milk products, fruit and fruit products, sandwiches, salads, processed meats and seafoods, etc., attempts to state the Department of Revenue's interpretation of "foods and drinks", as that phrase is used in the statute. Their interpretation of that phrase seems reasonable. Further, the general requirements of the rule, on their face, simply track the requirements of the statute. Therefore, the Department of Revenue having been granted authority by the Legislature to adopt rules on the subject matter and no procedural insufficiency having been proven, it is concluded that Rule 12A- 1.11(1), Florida Administrative Code, is a valid exercise of delegated legislative authority.

    
    

16. Petitioner, in its petition, alleges that the Respondent has interpreted the challenged rule in a manner which would make it an invalid exercise of delegated authority. The definition of "Rule" includes the requirement that a rule must be an agency statement of "general applicability". Section 120.52(14), Florida Statutes (1979). The evidence in this case does not establish that the interpretation of the rule by Respondent alleged by Petitioner is being generally applied by Respondent in the performance of its duties as addressed by the challenged rule and the statutes which that rule implements. Rule 12A-1.11(1), Florida Administrative Code, speaks for itself and any interpretation of that provision which could not be reasonably drawn

    from the face of that provision would have to be considered as a "Rule" unto itself and challenged accordingly. The evidence in this cause does not sustain such a challenge.

    
    

17. All proposed findings of fact and conclusions of law not incorporated in this Order have been considered by the Hearing Officer and rejected as not established by the evidence, irrelevant, or unnecessary to the final determination of this cause.

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore

ORDERED that Rule 12A-1.11(1), Florida Administrative Code, is an valid exercise of delegated legislative authority.

DONE and ORDERED this 16th day of May, 1980, in Tallahassee, Florida.

CHRIS H. BENTLEY, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of May, 1980.

COPIES FURNISHED:

Mark J. Wolff, Esquire SHARBER, SHEVIN, ET AL.

30th Floor, First Federal Building One S.E. Third Avenue

Miami, FL 33131

Linda C.Procta, Esquire Department of Legal Affairs The Capitol, LL04 Tallahassee, FL 32302

Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, FL 32301

Liz Cloud, Chief

Bureau of Administrative Code 1802 Capitol Building

Tallahassee, FL 32301

Docket for Case No: 79-001127RX

Orders for Case No: 79-001127RX