Judges: K. N. AYERS
Agency: Department of Financial Services
Latest Update: Jan. 26, 1981
Summary: Recommend holding claim of Petitioner for refund in abeyance pending outcome of federal litigation.
79-1996.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SUN OIL COMPANY, )
)
Petitioner, )
)
vs. ) CASE NO. 79-1996
)
OFFICE OF THE COMPTROLLER, )
)
Respondent. )
) EXXON CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 79-1997
)
OFFICE OF THE COMPTROLLER, )
)
Respondent. )
) LOUISIANA LAND AND EXPLORATION ) COMPANY, )
)
Petitioner, )
)
vs. ) CASE NO. 79-1998
)
OFFICE OF THE COMPTROLLER, )
)
Respondent. )
) ROADWAY EXPRESS, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 79-1999, and
) CASE NO. 80-098
OFFICE OF THE COMPTROLLER, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a consolidated public hearing was held in the above styled cases on February 27, 1980, at Tallahassee, Florida.
APPEARANCES
For Petitioner: Peter J. Winders, Esquire
Post Office Box 3239 Tampa, Florida 33601
For Respondent: E. Wilson Crump, II, Esquire and
Barbara S. Harmon, Esquire Assistant Attorneys General The Capitol
Tallahassee, Florida 32301
By petitions filed 17 September 1979 and subsequent thereto, Sun Oil Company, Exxon Corporation, Louisiana Land and Exploration Company, and Roadway Express, Inc., Petitioners, requested hearings to contest the Office of the Comptroller's, Respondent, notice of intent to deny Petitioners' applications for tax refund. Since all of these cases involved the same factual and legal issues, they were consolidated for hearing and one Recommended Order will be submitted. These cases all involve severance tax on oil pumped from the Jay- Little Escambia Creek Oil Field. Taxes were paid by the Petitioners to Florida based on the market price Petitioners believed proper. The Federal Department of Energy contends that Petitioners have been charging higher prices than is authorized by the Federal energy price controls. This issue is disputed by Petitioners and is presently in litigation. In the event Petitioners position respecting the proper pricing is upheld by the courts, no refund of taxes will be due Petitioners. However, if the courts uphold the position of the Department of Energy, the severance taxes paid by Petitioners to Florida were higher than due and Petitioners would be entitled to a refund if proper application for refund is made. This proper application for refund is the issue to be considered in this proceeding. Petitioners contend that their applications for refunds should be held in abeyance by Respondent, pending the outcome of the price litigation, at which time it will be known if they overpaid the taxes or not. Respondent, on the other hand, contends that the right to a refund is contingent on an uncertain event, thus making the claim premature.
FINDINGS OF FACT
There are no disputed issues of fact. The parties stipulated to the following facts: (Exhibits referred to are not attached to this Recommended Order)
As to Sun Oil Company:
On February 14, 1978, a claim for refund was submitted to the Florida Department of Revenue and the Comptroller of the State of Florida. A copy of the transmittal letter is annexed as Exhibit 8 and a copy of the claim for refund is annexed as Exhibit 9.
On August 31, 1978, another claim for refund, covering a subsequent time period was filed. A copy of the transmittal letter is annexed as Exhibit
10 and a copy of the claim for refund is annexed as Exhibit 11.
Meanwhile, to the knowledge of all parties, the Exxon appeal referred to below was prosecuted.
As to Exxon Corporation:
On January 19, 1978, Exxon submitted to the Department of Revenue and to the Comptroller a claim for refund of severance tax which may have been overpaid by Exxon Corporation for the period March 1, 1974, through December 31, 1976. The claim reflected its contingent nature. A copy of the transmittal letter is annexed as Exhibit 1. A copy of the claim for refund of severance tax is annexed as Exhibit 2. (Subsequently, claims for subsequent time periods have also been filed with the Comptroller).
By letter dated February 6, 1978, the Department of Revenue responded that the claim was barred by the one-year provision contained in Section 211.06, Florida Statutes. Enclosed with the response was a copy of an earlier letter to Exxon Corporation from the General Counsel of the Comptroller of the State of Florida, setting forth the position of the Comptroller that the contingent nature of the claim created no problem, but that the one-year provision in Section 211.06 was a statute of limitations. A copy of the letter of February 6, 1978, together with the enclosure, is annexed as Exhibit 3.
On February 27, 1978, Petitioner wrote the Comptroller requesting consideration of the claim for refund under the provisions of Section 215.26, Florida Statutes. A copy is annexed as Exhibit 4.
By letter dated March 7, 1978, the Comptroller wrote Petitioner denying the claim because it was not filed within one year from the date of payment of the tax as allegedly required by Section 211.06(2), stating that no further administrative review was available, and inviting judicial review, under Section 120.68, Florida Statutes. A copy of the letter is annexed as Exhibit 5.
Petitioner filed a notice of appeal from the order contained in the letter of March 7, 1978 (Exhibit 5). The First District Court of Appeal of Florida in due course rendered a decision and opinion, a copy of which is annexed as Exhibit 6. The First District Court of Appeal held that the one-year period described in Section 211.06 did not bar the application for refund, that the refund provisions of Section 215.26, Florida Statutes, were applicable, and remanded the case.
Thereafter, the Comptroller's Office asked for a further statement of Exxon's position on this matter, which was given in a letter dated May 24, 1979, a copy of which is annexed as Exhibit 7.
As to Louisiana Land and Exploration Company:
On January 25, 1978, Louisiana Land and Exploration Company submitted to the Department of Revenue and to the Comptroller a claim for refund of severance tax which may have been paid by Louisiana Land and Exploration company for the period March 1, 1974, through December 31, 1976. The claim reflected its contingent nature. A copy of the transmittal letter is annexed as Exhibit
A copy of the claim for refund of severance tax is annexed as Exhibit 13.
By letter dated February 6, 1978, the Department of Revenue responded that the claim was barred by the one-year provision contained in Section 211.06, Florida Statutes. Enclosed with the response was a copy of an earlier letter to Exxon Corporation from the General Counsel of the Comptroller of the State of Florida, setting forth the position of the Comptroller that the contingent nature of the claim created no problem, but that the one-year provision in
Section 211.06 was a statute of limitations. A copy of the letter of February 6, 1978, together with the enclosure, is annexed as Exhibit 14.
On October 31, 1978, Louisiana Land and Exploration Company again submitted to the Comptroller of the State of Florida a claim for refund of severance tax which may have been paid by Louisiana Land and Exploration Company for the period March 1, 1974, through December 31, 1976. The claim reflected its contingent nature. A copy of the transmittal letter is annexed as Exhibit
A copy of the claim for refund of severance tax is annexed as Exhibit 16.
Meanwhile, to the knowledge of all parties the Exxon appeal referred to above was prosecuted.
As to Roadway Express, Inc.:
On December 14, 1978, a claim for refund was submitted to the Florida Department of Revenue and the Comptroller of the State of Florida. A copy of the transmittal letter is annexed as Exhibit 17 and a copy of the claim for refund is annexed as Exhibit 18.
On November 13, 1979, a similar claim for refund was submitted to the Department of Revenue and the Comptroller of the State of Florida. A copy of the transmittal letter is annexed as Exhibit 19 and a copy of the claim for refund is annexed as Exhibit 20.
Meanwhile, to the knowledge of all parties the Exxon appeal referred to above was prosecuted.
As to all Parties:
In the case of each of the parties, by document entitled "Notice of Intent to Deny Refund" dated August 30, 1979 (and in the case of the second Roadway Express matter, Case No. 80-098, January 2, 1980), the Comptroller gave notice of his intent to deny refund solely because the contingent nature of the claim, stating as the sole grounds for denial: "At this time there is no basis under Section 215.26, Florida Statutes, to grant the requested refund."
In response to the Notice of Intent to Deny Refund, Petitioners promptly requested a hearing, which has resulted in the above consolidated proceedings.
There are no disputed issues of material fact with respect to this proceeding, at which the issue is whether or not the contingent claims filed within the three-year period prescribed by Section 215.26, Florida Statutes, should be held in abeyance until the contingency has occurred or it is determined that it will not occur. By agreeing that there are no disputed issues of material fact for the purpose of this proceeding, no party waives its right to present facts or contest facts in the event the case is considered in the future on its merits.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.
The statute relevant to these proceedings is Section 215.26, Florida Statutes, which provides in pertinent part:
The Comptroller of the state may refund to the person who paid same, or his heirs, personal representatives or assigns, any moneys paid into the State Treasury which Constitute:
* * *
An overpayment of any tax, license or account due;
Application for refunds as provided by this section shall be filed with the Comptroller, except as otherwise provided herein, within 3 years after the right to such refund shall have accrued else such right shall be barred.
In State ex rel. Victor Chemical Works v. Gay, 74 So.2d 560 (Fla. 1954), the court held that the above statute is not, strictly speaking, a statute of limitations but is more in the nature of a statute of non-claim. After citing Orlando Orange Groves Co. v. Hale, 161 So.284 (Fla. 1935), for the holding that
the word "accrue" meant to come into existence as an enforceable claim; to vest a right; as a cause of action has accrued when the right to sue has become vested
and American Jurisprudence for the principle that conditions may be annexed to a right to a refund of taxes paid, the court stated, at p. 562:
In short it is the universal rule that a statute of non-claim runs from the time the taxes are paid and is not postponed until the legality of the tax has been judicially determined.
While it can be argued that, under the facts involved in Victor Chemical, the universal rule as above quoted is much broader than it needed to be, the Victor Chemical language, that in a non-claim statute the time in which to file a claim for refund of taxes begins when the taxes are paid, was followed in State ex rel. Brunswick Corporation v. Kirk, 204 So.2d 4 (Fla. 1967). In Brunswick the undisputed facts were that Brunswick Corporation sold goods to X Corporation under a conditional sales contract, and paid sales tax to the state based upon the full selling price. Some 3 years later X Corporation defaulted on the conditional sales contract after making payments to seller covering less than one-third of the sales taxes paid by Brunswick, and the equipment was returned to Brunswick. Thereafter, and more than 3 years from the date Brunswick had paid the sales tax, Brunswick filed a claim for a refund of the excess sales taxes it had paid and had not recovered from X Corporation before repossession. The Commissioner of Revenue denied the claim for refund upon the ground that it "was not properly claimed within the statutory period for refund" although similar claims filed within 36 months from the date the sales taxes were paid by similar taxpayers were honored. In its opinion, the Supreme Court adopted verbatim an Attorney General's Advisory Opinion which held that where a dealer sold merchandise under a retained title or similar contract and subsequently repossessed the property he is not entitled to a refund of any of the taxes so paid. No reference is there made to Section 215.26 Florida
Statutes, regarding refunds when claim is made within 3 years of the date the right to refund accrued. This left the seller responsible for paying the full sales tax when the sale is consummated, whether upon conditional sales, retain title, or other contract and without any right to refund if goods are subsequently repossessed by seller. This position was contrary to the long- standing position of the Commissioner of Revenue to approve such claims when made within 36 months after the date upon which the tax was paid.
The Brunswick decision was reversed by the legislature in Laws 1967,
c. 67-518 Sec. 1, which is now contained in Section 212.17(2). This section provides in pertinent part:
A dealer who has paid the tax imposed by this chapter on tangible personal property sold under a retained title, conditional sale, or similar contract, or under a contract wherein the dealer retains a security interest in the property pursuant to chapter 679, may take credit or obtain a refund for the tax paid by him on the unpaid balance due him when he repossesses (with or
without judicial process) the property within
12 months following the month in which the property was repossessed. When such repossessed property is resold, the sale is subject in all respects to the tax imposed by this chapter.
The statutory provisions now provide protection to conditional sales vendors by allowing them to recover excess sales taxes paid if the property is repossessed, but the legal implication of the Brunswick decision, is that absent a statutory provision for refund, once severance taxes are paid, there is no right to refund for over-payment.
The Comptroller's position in these cases, that Petitioners' right to refund of severance taxes paid has not accrued, is not without merit. According to the Comptroller, Petitioners' right to refund would only accrue when their controversy with the Federal Department of Energy is finally resolved. If Petitioners win that controversy they will have no right to refund, but if they lose, then their right to refund will accrue. But for the Victor Chemical case above cited it would not be necessary for Petitioners to file their claims for refunds until it has been adjudicated whether or not the price they charged, and upon which the severance tax was based was too high. It is only then that it can truly be said their right to a refund accrues. However, Victor Chemical says such claim must be filed within three years of the date the tax was paid. On the other hand, Brunswick, supra, raises the question whether a refund is payable even if it is determined that Petitioners paid more tax than was proper and filed a claim for refund within three years. In Exxon Corporation v. Lewis,
371 So.2d 129 (Fla. 1st DCA 1978), the court held, without citing either Victor Chemical or Brunswick, that the three-year filing provisions of Section 215.26, Florida Statutes, is applicable to these cases and this decision presumably is authority for Petitioners' position that the holding in Brunswick, supra, does not bar these claims.
From the foregoing it is concluded that Petitioners must file their claims for refund within three years from the date the severance taxes were paid and that these claims will remain contingent until the pricing dispute with the
Department of Energy is resolved. It is further concluded that Petitioners have filed their claims, and since these claims are not ripe for adjudication they should be held in abeyance until the determination of the proper pricing of the oil removed from the Jay-Little Escambia Creek oil fields is resolved. It is therefore
RECOMMENDED that these claims be held in abeyance pending the resolution of the pricing controversy between Petitioners and the Department of Energy.
Entered this 13th day of March, 1980.
K. N. AYERS, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 13th day of March, 1980.
COPIES FURNISHED:
Peter J. Winders, Esquire
P. O. Box 3239
Tampa, Florida 33601
E. Wilson Crump, II, Esquire and Barbara S. Harmon, Esquire Assistant Attorneys General
The Capitol
Tallahassee, Florida 32301
Docket for Case No: 79-001996
Orders for Case No: 79-001996
| Issue Date |
Document |
Summary |
|
Dec. 24, 1980 |
Agency Final Order
|
|
|
Mar. 13, 1980 |
Recommended Order
|
Recommend holding claim of Petitioner for refund in abeyance pending outcome of federal litigation.
|
