STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PITCH PINE LUMBER COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 83-371

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this matter before Marvin E. Chavis, duly designated Hearing Officer of the Division of Administrative Hearings, on June 17, 1983 in Tampa, Florida.

APPEARANCES

For Petitioner: Roderick K. Shaw, Jr., Esquire

Post Office Box 2111 Tampa, Florida 33601

For Respondent: Linda Lettera, Esquire

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

ISSUES AND BACKGROUND

This concerns the issue of whether wooden stakes utilized in the growing of tomatoes in the State of Florida are exempt from the Florida State sales tax under Florida Statute 212.08(5)(a). At the formal hearing, the Petitioner called as witnesses James Felix Price and George

1. Marlowe, Jr. The Respondent called no witnesses. The Petitioner offered and had admitted three exhibits and the Respondent offered and had admitted into evidence two exhibits.

   Counsel for the Petitioner and counsel for the Respondent submitted proposed findings of fact and conclusions of law for consideration by the Hearing Officer. To the extent that those proposed findings of fact are consistent with the findings herein they were adopted by the Hearing Officer. To the extent that those proposed findings of fact and conclusions of law are inconsistent with the findings and conclusions in this Order, they were considered by the Hearing Officer and rejected as being not supported by the evidence or unnecessary to the resolution of this cause.

   
   

   FINDINGS OF FACT

   
   

   1. The Petitioner, Pitch Pine Lumber Company, sells tomato stakes to tomato growers in Florida. As a result of these sales, the Petitioner was assessed and ordered by the Department of Revenue to pay sales tax due on the sales of tomato stakes.

      
      

   2. It was stipulated by and between Petitioner and Respondent that the amount in controversy is $11,723.26 and that if the exemption under Florida Statute 212.08(5)(a) does not apply then the Petitioner shall owe that amount plus interest and penalties if applicable from October 3, 1980.

      
      

   3. Tomato stakes are used in almost every area of Florida today which produces tomatoes. Approximately two- thirds of the 44,000 acres used to grow tomatoes in Florida utilize tomato stakes. The only area which does not utilize these stakes is the Dade County area and this is due to the coral rock soil conditions.

      
      

   4. The stakes which are used are wooden stakes. These stakes are driven into the ground and used to hold the tomato plants upright or vertical. This prevents the fruit of the tomato plants from resting directly on the soil. Tomato stakes and cotton cloth are both natural plant materials and contain cellulose.

      
      

   5. One of the benefits of using tomato stakes is that by holding the plant upright, the plant will form a natural canopy which then shades the fruit and prevents sun scalding and sunburning of the fruit. This shade is provided by the leaf canopy of the plant and the stakes themselves provide no shade.

      
      

   6. Another benefit of utilizing tomato stakes is increased insect control and decreased fruit loss. This is the result of the fruit of the plant being held up off the ground by the plant which is being held upright by the tomato stakes.

      
      

   7. Tomato stakes were used for this purpose in Florida as early as 1947 and 1948. By 1960, tomato stakes were being used extensively in Florida.

      
      

      CONCLUSIONS OF LAW

      
      

   8. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this action.

      
      

   9. The present case involves a claimed exemption by Petitioner from the Florida sales tax, Section 212.05, Florida Statutes (1980). The specific exemption sought is contained in Section 212.08(5)(a), Florida Statutes (1980), which provides in relevant part:

      
      

      The sale at retail, the rental, the use, the consumption, the distribution, and the storage to be used or consumed in this State of the following tangible personal property are hereby specifically exempt from the tax imposed by this chapter.

      
      

      There shall be exempt from the tax imposed by this chapter . . . cloth, plastic, and other similar materials used for shade, mulch, or protection from frost or insects on a farm.

      
      

   10. Pursuant to Section 212.08(5)(a), Florida Statutes (1980), the Department-of Revenue promulgated Rule 12A-1.48(12) Florida Administrative Code, which provides:

       
       

       Items entitled to exemption when purchased for use on a farm include cloth, plastic and other similar materials used for shade, mulch and protection from frost or insects.

       
       

   11. Petitioner contends that because tomato stakes are used in part to provide insect protection and shade to tomato fruit they are similar in function to cloth and

       plastic and therefore fall within the exemption. However, the exemption, as does the tax, only extends to "tangible personal property" and not particular functions. The only purpose of the function description in Section 212.08(5)(a) is to limit those particular transactions in which the exemption will be applied to "cloth, plastic, and other similar materials."

       
       

   12. Under the rule of ejusdem generis, the phrase "other similar products" refers back to cloth and plastic. Any materials included in "other similar materials" must be of the same kind or species as cloth and plastic. See State ex rel Wedgworth Farms, Inc. v. Thompson, 101 So.2d

       381 (Fla. 1958) and Arnold v. Shumpert, 2l7 So.2d 116 (Fla. 1968). The only facts in the record that tomato stakes are similar to cloth and plastic are the facts that cotton cloth and stakes are natural plant materials and both contain cellulose. It is noteworthy that plastic is not a natural plant material and is similar to cloth only in that it is a material which comes in large thin sheets. Exemptions to the tax statutes are special favors granted by the legislature and are to be strictly construed against the taxpayer. Housing v. Vogue, Inc. v. Department of Revenue, 403 So.2d 478 (1st DCA Fla. 1981); State v. Thompson, 101 So.2d 381 (Fla. 1958); State ex rel Szabo Food Service, Inc. of N.C. v. Dickinson, 286 So.2d 529 (Fla. 1973). To conclude that tomato stakes are a material similar to cloth and plastic would require a very broad liberal interpretation of Section 212,08(5)(a), Florida Statutes. This cannot be done and therefore it is concluded that tomato stakes were not included in the exemption of Section 212.08(5)(a) by the legislature.

       
       

   13. Because the exemption is inapplicable, Petitioner owes sales tax in the amount of $11,723.26 plus interest and penalties, if applicable from October 3, 1980.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is

RECOMMENDED:

That the Department of Revenue enter a final order requiring the Petitioner to pay $11,723.26, plus interest and penalties, if applicable from October 3, 1980. DONE and ENTERED this 23rd day of September 1983, in Tallahassee, Florida.

MARVIN E. CHAVIS, 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 23rd day of September, 1983.

COPIES FURNISHED:

Roderick K. Shaw, Jr., Esquire Post Office Box 2111

Tampa, Florida 33601

Linda Lettera, Esquire Department of Legal Affairs The Capitol, LLO4

Docket for Case No: 83-000371

Orders for Case No: 83-000371