Judges: H. E. SMITHERS
Agency: Department of Revenue
Latest Update: Dec. 05, 1980
Summary: Petitioner owes interst on taxes due on two airplanes.
80-0193.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
JAMES D. ROACH, )
)
Petitioner, )
)
vs. ) CASE NO. 80-193
)
DEPARTMENT OF REVENUE, )
)
Respondent. )
)
RECOMMENDED ORDER
An administrative hearing was held on the above matter by H. E. Smithers on August 18, 1980 at Miami, Florida. The Petitioner represented himself and the Respondent was represented by Lewis D. Milledge, Jr.
By Petition for Formal Hearing, James D. Roach (Roach) contested the proposed assessment of tax, penalty and interest alleged due from him by the Department of Revenue (DOR) on the purchase of two airplanes. Petitioner's proposed findings indicate that he will pay the appropriate amount of interest but continues to contest the $40.00 additional tax and seeks waiver of any penalty due to the mitigating circumstances. The issue then is whether Petitioner owes the penalty and the $40.00 additional tax.
The record consists of the testimony of Roach and one DOR witness, and DOR's Composite Exhibit I.
FINDINGS OF FACT
In the Spring of 1978, Roach purchased 1965 Piper aircraft No. 3406W from an out-of-state broker. On the assumption that sales tax had been collected, and not being familiar with Florida's Sales/Use tax laws, Roach took no other action. This aircraft was sold in August of 1978 and 1972 Piper No. 5309T was purchased in September of 1978; this aircraft was purchased under the same circumstances. No records were kept of the purchase price of either aircraft. DOR wrote Roach in August and September of 1978 regarding 3406W, without result. Thereafter, DOR used the average book value of $19,000 to arrive at a tax due of $760.00 Roach paid $720 tax on July 15, 1979; he contended that 3406W had $1000 less equipment than the average book valued aircraft. Prior to this time Roach became aware that tax was due but indicated he was financially unable to pay. On July 18, 1979, DOR sent Roach the proposed assessment for $40.00 tax, $190.00 penalty and $83.60 interest.
Meantime, DOR was writing Roach regarding the second aircraft, 5309T, with no response being received until August 8, 1979. A proposed assessment was issued for $1500 tax, $375 penalty and $394.93 interest on September 10, 1979. During the subsequent informal conference, Roach advised that the tax due was in fact $1520, which was paid on October 4, 1979. Revised assessment dated October 22, 1979, was for $380 penalty and $400.20 interest.
DOR's witness, Assistant Area Supervisor, Collection and Enforcement Division, received the matter from higher headquarters in December of 1979. He merely indicated that someone else in DOR used the "blue book" to determine value; he presented no evidence contrary to Roach's estimated value of $18,000 for the first aircraft or regarding the imposition of the penalty.
CONCLUSIONS OF LAW
Although this case was styled as Roach v. Department of Revenue, Department of Revenue nonetheless was required to establish a prime facie case as to the $40.00 additional tax and the proposed penalty. Balino v. HRS, 348 So2d 349 (Fla. 1st DCA 1977); Department of Revenue v. Modern Plating Corp., DOAH No. 80-1295 entered 2 September 1980. However, Department of Revenue's allegations were unsupported by the evidence. It is therefore,
RECOMMENDED that James D., Roach pay Interest on the $720.00 tax on the first aircraft computed from May 1, 1978 through June 1979, and on the $1,520.00 tax on the second aircraft computed from September 1978 through September 1979.
DONE and ORDERED this 23rd day of September, 1980, in Tallahassee, Florida.
H. E. SMITHERS Hearing Officer
Division of Administrative Hearings
101 Collins Building Tallahassee, Florida 32301 (904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 23rd day of September, 1980.
COPIES FURNISHED:
Lewis D. Milledge, Esquire 6101 S.W. 76th Street Miami, Florida 33143
Mr. James D. Roach 8347 S.W. 137th Avenue Miami, Florida 33183
Robert Pierce, General Counsel Department of Revenue
104 Carlton Building Tallahassee, Florida, 32301
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA, DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA
JAMES D. ROACH,
Petitioner,
vs. CASE NO. 80-193
DEPARTMENT OF REVENUE,
Respondent.
/
FINAL ORDER
An administrative hearing was held on the above matter by H. E. Smithers on August 18, 1980 at Miami, Florida. The Petitioner represented himself and the Respondent was represented by Lewis D. Milledge, Jr.
By Petition or Formal Hearing, James D. Roach (Roach) contested the proposed assessment of tax, penalty and interest alleged due from him by the Department of Revenue (DOR) on the purchase of two airplanes. Petitioner's proposed findings indicate that he will pay the appropriate amount of interest but continues to contest the $40.00 additional tax and seeks waiver of any penalty due to the mitigating circumstances. The issue then is whether Petitioner owes the penalty and the $40.00 additional tax.
The record consists of the testimony of Roach and one DOR witness, and DOR's Composite Exhibit I.
FINDINGS OF FACT
In the Spring of 1978, Roach purchased 1965 Piper aircraft No. 3406W from an out-of-state broker. On the assumption that sales tax had been collected, and not being familiar with Florida's Sales/Use tax laws, Roach took no other action. This aircraft was sold in August of 1978 and 1972 Piper No. 5309T was purchased in September of 1978; this aircraft was purchased under the same circumstances. No records were kept of the purchase price of either aircraft. DOR wrote Roach in August and September of 1978 regarding 3406W, without result. Thereafter, DOR used the average book value of $19,000 to arrive at a tax due of $760.00. Roach paid $720 tax on July 15, 1979; he contended that 3406W had $1000 less equipment than the average book valued aircraft. Prior to this time Roach became aware that tax was due but indicated he was financially unable to pay. On July 18, 1979, DOR sent Roach the proposed assessment for $40.00 tax, $190.00 penalty and $83.60 interest.
Meantime, DOR was writing Roach regarding the second aircraft, 5309T, with no response being received until August 8, 1979. A proposed assessment was issued for $1500 tax, $375 penalty and $394.93 interest on September 10, 1979. During the subsequent informal conference, Roach advised that the tax due was in fact $1520, which was paid on October 4, 1979. Revised assessment dated October 22, 1979, was for $380 penalty and $400.20 interest.
DDP's witness, Assistant Area Supervisor, Collection and Enforcement Division, received the matter from higher headquarters in December of 1979. He merely indicated that someone else in DOR used the "blue book" to determine value, he presented no evidence contrary to Roach's estimated value of $18,000 for the first aircraft or regarding the imposition of the penalty.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and over the subject matter of these proceedings.
The actions of administrative officials within the scope of their authority are presumed to be correct. 73 CJS Public Administrative Bodies and Procedures, Section 63. This applies to actions by taxing officials. The Legislature has stated that estimated tax assessments are prima facie correct. Section 212.14, Florida Statutes.
A virtually unanimous rule in court proceedings is that the party bringing the action has the burden to go forward initially with the evidence.
The Hearing Officer was incorrect in the allocation of the burden of proof in this case.
The burden of proof of petitioner's claim must be carried by the petitioner. Ness v. Cowdery, 149 So.33 (Fla. 1933). The respondent has no duty to go forward with the evidence until the petitioner establishes a prima facie case. Greenfield Real Estate Inc. Corp. v. Merritt, 348 So.2d 1199 (Fla. 3rd
D.C.A. 1977). In administrative proceedings, the burden of proof ordinarily rests on the applicant for relief, benefits, or a privilege. 73 C.J.S. Public Administrative Bodies and Procedures Section 124.
At least one Florida court has held that a notice of assessment, issued by the Department of Revenue, does not put the state in the sword-wielder position. In Department of Revenue v. First Federal Savings and Loan Association, 256 So.2d 524 (Fla. 2nd D.C.A. 1971), the issue of venue was raised in a dispute between the Department of Revenue and a taxpayer over the Department's assessment of intangible tax. The court held that venue must lie in the county in which the Department of Revenue maintained its official headquarters and stated:
It indisputably appears that the only action taken by the Department of Revenue was to send a "formal notice assessment
and demand" for delinquent intangible taxes, specifying the amount and date due. The notice further advised that the tax should be paid "to avoid the service of a tax warrant to effect collection . . ." We think this "notice" was a mere naked demand, and we perceive a material distinction between such a demand and affirmative action to enforce that demand. There was, in our view, no "official action" within the con- templation of the aforementioned rule upon
which venue in Lee County could be predicated.
Now arguendo, there may have been a threat to enforce the aforesaid demand by tax warrant. But there was no assertion that a warrant would certainly be sought nor was
a deadline given therefor. We construe the "threat," therefore, as contingent rather than real an anticipatory rather than imminent. In fact, it is hardly more than a recitation of a possible legal remedy available for enforcement of the demand.
The question to be answered in these cases may be said to be whether the state is the initial sword-wielder in the matter and whether the plaintiff's action is in the nature of a shield against the state thrust. If so, then the suit may be maintained in the county wherein the blow has been or is imminently about to be laid on. On the other hand, if plaintiff is the prime mover in the premises against a passive or dormant state or state agency then venue lies properly in the county wherein the state of the agency maintains
its official headquarters. Appellant's plea of privilege herein should have been honored. (e.s.)
In the case of National Sun Control Company vs. State of Florida, Department of Revenue, Division of Administrative Hearings, Case No. 77-1080, the Department of Revenue issued a Final Order, wherein it held that, in challenging a sales tax assessment, the taxpayer bears the burden of proof. The law in Florida is well established that contemporaneous construction of a statute by those charged with its enforcement and interpretation is entitled to great weight, and that the courts will not depart from such construction unless it is clearly erroneous. United States Gypsum Company vs. Green, 110 So.2d 409 (Fla. 1959): Warnock vs. Florida Hotel and Restaurant Commission, 178 So.2d 917 (Fla. 3rd D.C.A. 1965); Green vs. Hood. 120 So.2d 223 (Fla. 2nd D.C.A. 1960); Kirk vs. Western Contracting Corp., 216 So.2d 503 (Fla. 1st D.C.A. 1969).
An additional reason supporting the proposition that the taxpayer must overcome the presumption of prima facie correctness accorded estimated assessments is found in the case of Balino vs. Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st D.C.A. 1977). In that case, the appellate court found that the burden of proof was allocated to the party who had peculiar control over the information and records that would be relevant in determining an issue between the parties. Here, all of the information and records which would have been relevant in determining the validity of the assessment were peculiarly within the taxpayer's control. When the taxpayer was unable to produce these records or overcome them at hearing with testimony other than his own statements, it is evident that the assessment made by the Department of Revenue was valid.
In view of the fact that the assessment made by one Department of Revenue was valid, the penalty and interest provisions of Section 212.12(2)(3), Florida Statutes, are equally valid. Section 212.12(2), Florida Statutes, provides:
"A specific penalty shall be added to the tax . . .; however, in no
event shall the penalty be less than $5.
Section 212.12)3), Florida Statutes, provides for interest to accrue on sales tax assessments at a rate of 1 percent per month until the tax is paid. There is no provision in this subsection of Section 212.12, Florida Statutes, for the Department of Revenue to reduce the amount of interest.
WHEREFORE, IT IS RECOMMENDED, that the assessment made by the Department of Revenue herein is UPHELD and that the taxpayer shall pay the tax as assessed plus interest as set forth in the Notice of Assessment issued by the Department or Revenue. It is, however, RECOMMENDED that the penalty be reduced to the amount of $5.00 for both assessments at issue herein.
ORDERED AND DONE THIS 1st day of December, 1980.
RANDY MILLER EXECUTIVE DIRECTOR
Docket for Case No: 80-000193
Orders for Case No: 80-000193
