STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ASSOCIATED COCA-COLA BOTTLING CO., ) INC., )

)

Petitioner, )

)

v. ) CASE NO. 80-2017

)

DEPARTMENT OF REVENUE, )

STATE OF FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, at Winter Park, Florida, on February 11, 1981, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: David C. Latham, Esquire

Post Office Box 17711 Orlando, Florida 32860

For Respondent: E. Wilson Crump, II, Esquire

Assistant Attorney General

Department of Legal Affairs, The Capitol Tallahassee, Florida 32301

In this case, Petitioner contests an alleged deficiency in corporate income tax under Chapter 220, Florida Statutes, involving the application of Respondent's Rule 12C-1.13(1)(b)3, Florida Administrative Code. This case was consolidated with DOAH Case No. 80-2210R wherein Petitioner seeks an administrative determination of the validity of Respondent's rule, pursuant to Section 120.56, Florida Statutes.

At the hearing, the parties stipulated that Findings of Fact herein would be based on the first four paragraphs of the petition in this case, and any further facts deemed necessary by the Hearing Officer based on the stipulated admission of Exhibits 1 through 3. No witnesses were called to testify at the hearing by either party.

The parties also stipulated that there is no contest as to the facts, or to the amount in controversy, and further agreed that if Respondent's rule is held to be valid, then the petition in this case should be dismissed. They further agreed that if the rule is held to be invalid, then an order should be entered in this case requiring Respondent to amend or cancel its proposed deficiency against Petitioner.

FINDINGS OF FACT

1. Petitioner, Associated Coca-Cola Bottling Company, Inc., is a Delaware corporation duly authorized to transact business in the State of Florida, having an office in Daytona, Florida, and doing business in Florida itself, or through its wholly owned subsidiaries. (Petition)

   
   

2. Petitioner, on a consolidated basis with its subsidiaries, duly filed its Florida corporation income tax returns for the fiscal years ending December 31, 1977, and December 31, 1978. (Petition)

   
   

3. The Florida Department of Revenue, after audit of these returns, alleged a deficiency in both years totaling $1,247.00. In both fiscal years in question and pursuant to Section 220.13(1)(b) 3, Florida Statutes, a "New Jobs Credit" of 100,000 was taken by Petitioner for each year. During each of such years the amount of wages and salaries paid or incurred by Petitioner within the State of Florida for each of the taxable years in question exceeded $100,000, but the maximum credit applicable pursuant to the U. S. Internal Revenue Code is

   $100,000, such limitation being adopted in Section 220.13(1)(b)3, Florida Statutes. (Petition, Exhibit 1)

   
   

4. Respondent's audit of Petitioner's returns resulted in adjustments producing the alleged tax deficiency by reducing Petitioner's deductions for "New Jobs Credit" under Section 220.13(1)(b)3, Florida Statutes, to $92,396.00 in 1977 and $51,742.00 in 1978. The reduction of these deductions was based upon application of Respondent's Rule 12C-1.13(1)(b)3, Florida Administrative Code, which limits the deduction for salaries and wages paid in creating new jobs in Florida to a prorata amount of the total expended in all states for which credit is given under Section 280C of the Federal Internal Revenue Code. Since Petitioner expended $222,437.00 in such wages and salaries in Florida in 1977, with a total of $240,759.00 being expended by it everywhere, it was allowed only some ninety-two percent of the federal maximum of $100,000 for New Jobs Credit as a deduction on its tax return. Similarly, in 1978, it was allowed about fifty-one percent since its Florida expenditures amounted to

$221,656.00 for new jobs, and a total everywhere, of $428,386.09. (Exhibit 1)

CONCLUSIONS OF LAW

1. The petitioner herein sought to set aside the notice of proposed corporate income tax deficiency issued by the Respondent on the sole ground that Respondent's rule 12C-1.13(1)(b)3, Florida Administrative Code, is an invalid exercise of delegated legislative authority in that it "applies a computation not provided for nor contemplated" by subsection 220.13(1)(b)3, Florida Statutes.

   
   

2. The parties have agreed that there is no controversy between the parties as to the amount in controversy, and that the petition herein either stands or falls on a determination of the validity of Respondent's Rule 12C- 1.13(1)(b)3.

   
   

3. By Final Order, this date, in DOAH Case No. 80-2210R involving the same parties, this Hearing Officer determined that Petitioner had failed to establish that the contested rule is an invalid exercise of delegated legislative authority. Accordingly, since there is no factual dispute between the parties, it is unnecessary to formulate additional conclusions.

RECOMMENDATION

That the petition herein be DISMISSED and that the tax deficiency against Petitioner be appropriately enforced.

DONE AND ENTERED this 23rd day of March 1981, in Tallahassee, Florida.

THOMAS C. OLDHAM

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

FILED with the Clerk of the Division of Administrative Hearings this 23rd day of March 1981.

COPIES FURNISHED:

E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs The Capitol

Tallahassee, Florida 32301

David C. Latham, Esquire Post Office Box 17711 Orlando, Florida 32860

Randy Miller, Executive Director Department of Revenue

102 Carlton Building Tallahassee, Florida 32301

Docket for Case No: 80-002017

Orders for Case No: 80-002017