STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARION RIP YOHE d/b/a RIP'S ) UNIFORM SERVICE, )

)

Petitioner, )

)

vs. ) CASE NO. 83-2054

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Sharyn L. Smith, held a formal hearing in this case on December 20, 1983, in Fort Lauderdale, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Marion Rip Yohe, Pro Se

1801 Northwest 29th Street, No. 5 Fort Lauderdale, Florida 33311

For Respondent: Linda Lettera, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol, Room LL04 Tallahassee, Florida 32301

The issue for determination at the final hearing was whether the sale of authorized postal uniform items from a duly licensed postal uniform vendor to an eligible postal employee is exempt from Florida sales tax as a sale to the United States Government.

At the final hearing, Margaret Yohe, William Adreon, Don McMahon and James Crudele, testified for the Petitioner. Petitioner's Exhibits 1-9 were offered into evidence and Exhibits 1-7 were admitted. Respondent's Exhibits 1 and 2 were offered and admitted into evidence.

Proposed Recommended Orders containing findings of fact have been submitted by the parties and considered in the preparation of this Recommended Order.

When the parties' findings of fact were consistent with the weight of the credible evidence introduced at final hearing, they were adopted and are reflected in this Recommended Order. To the extent that the findings were not consistent with the weight of the credible evidence, they have been either rejected, or when possible, modified to conform to the evidence. Additionally, proposed findings which were subordinate, cumulative, immaterial or unnecessary have not been adopted.

FINDINGS OF FACT

1. The United States Postal Service makes direct payments to licensed vendors who sell approved postal uniform items to eligible employees. Direct payments to licensed vendors are made by the St. Louis Postal Data Center. Unlicensed vendors are not reimbursed.

   
   

2. Licensed vendors are reimbursed only for authorized uniform items for employees who have served the required 90 days, and only to the extent of the balance in the employees account at the time the invoice is submitted by the employee for payment.

   
   

3. Upon proper presentation of the vendor's original invoice by the postal employee, the St. Louis Postal Data Center issues one check every two weeks to each licensed vendor for the total amount covering vendor invoices for uniform items purchased, plus state sales tax where applicable and less service charge.

   
   

4. Thus, eligible postal employees deal directly with the licensed uniform vendor of their choice. Postal employees initiate the uniform purchases on their own behalf and make the purchases in their own names. No purchase order is issued by the federal government. Instead invoices are made out in the name of the postal employee making the purchase. Within the limitations of the balance in a postal employee's current uniform allowance account, the Postal Service makes a direct reimbursement payment to the vendor.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes.

   
   

6. Sections 212.05 and 212.21, Florida Statutes, requires that each sale at retail of tangible personal property is subject to sales tax unless specifically exempt. Section 212.08(6), Florida Statutes (Supp. 1980), provides, in pertinent part, as follows:

   
   

   There shall also be exempt from the tax imposed by this Chapter sales made to the United States Government, . . . .

   
   

7. The Petitioner asserts that the procedure established for purchase by postal service employees with a direct reimbursement by the federal government to licensed vendors, constitutes a sale to the United States Government. Conversely, the Respondent argues that the federal government acts as a third- party-payer, who neither chooses the vendor nor takes title to the property and, therefore, the sale is made to the employee and is taxable.

   
   

8. As noted by the Respondent, it is a fundamental rule of statutory construction that exemptions to taxing statutes must be strictly construed against the taxpayer. This rule has been consistently applied by Florida Courts to exemptions from the State sales tax. See e.g., Housing by Jogue, Inc. v. Department of Revenue, 403 So. 2d 478, 480 (Fla. 1st DCA 1991).

   
   

9. Under the rule of strict construction, the vendors' sales to individual postal employees which are reimbursed by the federal government are not sales made directly to the federal government and are, therefore, subject to State sales tax.

RECOMMENDATION

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

That a Final Order be entered by the Respondent Department of Revenue finding the Petitioner's sales of postal uniforms subject to the State sales tax and upholding an assessment for the period November 1, 1980 through April 30, 1982, in the amount of $12,927.35.

DONE and ENTERED this 27th day of March, 1984, in Tallahassee, Florida.

SHARYN L. SMITH

Hearing Officer

Division of Administrative Hearings 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904)488-9675

FILED with the Clerk of the Division of Administrative Hearings this 27th day of March, 1984.

COPIES FURNISHED:

Marion Rip Yohe

1801 Northwest 29th Street, No. 5 Fort Lauderdale, Florida 33311

Larry Levy, Esquire General Counsel Department of Revenue

104 Carlton Building Tallahassee, Florida 32301

Linda Lettera, Esquire Assistant Attorney General

Department of Legal Affairs Director The Capitol, Room LL04

Tallahassee, Florida 32301

Randy Miller, Executive Department of Revenue

102 Carlton Building Tallahassee, Florida 32301

Docket for Case No: 83-002054

Orders for Case No: 83-002054