STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GOURMET TO GO, INC., )

)

Petitioner, )

)

v. ) CASE NO. 88-6367

) DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter was heard by William R. Dorsey, the Hearing Officer designated by the Division of Administrative Hearings on July 13, 1989 in Miami, Florida.

APPEARANCES

For Petitioner: Larry V. Bishins, Esquire

4548 North Federal Highway Ft. Lauderdale, FL 33308

For Respondent: Lealand L. McCharen, Esquire

Assistant Attorney General The Capitol Building Tallahassee, FL 32399-1050

STATEMENT OF THE ISSUES

Whether the Petitioner owes sales and use tax (plus interest and penalties) for charges made to its catering customers for the labor of waiters serving complete meals before December 7, 1987.

PRELIMINARY STATEMENT

The Department served a notice of decision on the Petitioner assessing sales and use tax, plus interest and penalties for the period May 1, 1984 through April 30, 1987. As a result, Gourmet to Go filed a petition with the Department contesting that assessment on December 16, 1988, which was forwarded to the Division of Administrative Hearings on December 23, 1988. An amended petition was filed on January 30, 1989. All uncontested amounts had been paid in full to the Department of Revenue. The amount now claimed to be due is

$10,650.09. A similar notice was served for the period May 1, 1987 through April 30, 1988; the amount now claimed to be due is $1,759.48. The parties stipulated before the hearing to the amount in contest, so that the only question remaining for hearing was the question of liability of the catering business for sales tax on services under Rule 12A-1.11(20) and (21), Florida Administrative Code for waiters serving full meals during the period May 1, 1984 through December 7, 1987. At the hearing, Gourmet To Go called its president, Hugh McCauley as a witness. The Department called a Senior Audit Supervisor with the Ft. Lauderdale Regional Office, Allen Adams, as an expert witness. A

transcript of the hearing was filed and the parties filed proposed Findings of Fact and Conclusions of Law. Rulings on proposed findings of fact are made in the appendix to this order.

FINDINGS OF FACT

1. During the period, May 1, 1984 through September 30, 1984, Gourmet To Go did not charge its customers sales tax for labor provided by waiters serving full meals that it catered. Gourmet To Go treated the waiters as subcontractors, and shows charges for waiters on its bill as "Sub Contract Services."

   
   

2. During the period May 1, 1984 through December 7, 1987, Gourmet To Go collected sales tax on the services of waiters when the food served was canapes, sandwiches, hors d'oeuvres or party tidbits.

   
   

3. Gourmet To Go commonly served both full meals and party tidbits as part of its catering business.

   
   

4. The Department of Revenue audited the accounts of Gourmet To Go by reviewing gross receipts, and subtracting any exempt sales Gourmet To Go reported to the Department on form DR- 15. This is the audit method ordinarily used by the Department. The invoices of Gourmet To Go show that it did not charge its clients sales tax upon amounts shown on invoices for labor of waiters serving dinners. The agreed amount due for the period from May 1, 1984 through April 30, 1987, if Gourmet To Go is liable for the taxes is as follows:

   
   

   Tax $6,335.67

   
   

   Penalty $1,583.92

   
   

   Interest computed through the date of the hearing,

   June 23, 1989 - $2,733.50

   
   

   TOTAL $10,650.09

   
   

   For the period May 1, 1987 through April 30, 1987, the amount due if Gourmet To Go is liable for the sales tax is:

   
   

   Tax $1,214.70

   
   

   Penalty $303.67

   
   

   Interest the date	computed through of the hearing,
   June 23,	1989 -	$241.11
   TOTAL		$1,759.48

   
   

5. Interest would continue to accrue on any unpaid amounts due through the date payment is made.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.575, Florida Statutes (1987).

7. Gourmet To Go maintains that charges for waiters or other services in its catering business are taxable only if the food served was sandwiches, hors d'oeuvres, canapes or similar party tidbits. The Department maintains that all charges for waiters or other services in the catering business are subject to tax regardless of the type of foods served. During the period May 1, 1984 through December 7, 1987, Rule 12A-1.11(20), Florida Administrative Code stated:

   
   

   Sandwiches, hors d'oeuvres, canapes and similar party tidbits sold by caterers and other businesses which are required to be licensed by the Division of Hotel and Restaurants of the Department of Professional Regulation are taxable. If the sale of these items includes a sale for waiters or other services, the entire transaction is taxable even though this charge is separately stated.

   
   

   Rule 12A-1.11(21), Florida Administrative Code provided during that period:

   
   

   Barbecues, fish fries, and other similar dinners are taxable even if the entire proceeds are used for charitable purposes. Meals sold by churches are exempt.

   
   

8. Gourmet To Go takes the position that when subsections (20) and (21) of Rule 12A-1.11 are read together, the food served at barbecues, fish fries and similar full dinners is taxable, but the services of waiters are not taxable, but both the food and the service provided by waiters are taxable when caterers serve sandwiches, hors d'oeuvres, canapes or similar party tidbits.

   
   

9. The Department replaced these rules with Rule 12A- 1.011(6)(a) of the Florida Administrative Code effective December 8, 1987. Under this rule, "the total charge made by a caterer or wedding consultant for cooking, preparing, or serving food or drinks is subject to tax..."

   
   

10. The position taken by Gourmet To Go is not persuasive. During the period at issue the sales tax on the privilege of engaging in the business of selling tangible personal property at retail in this state was imposed by Section 212.05, Florida Statutes, based on a percentage "of the sales price". Section 212.05(1)(a)1. Florida Statutes, (1983). The term "sales price" was defined in Section 212.02(4), Florida Statutes (1983), to mean:

    
    

    the total amount paid for tangible personal property, including any services that are part of the sale...

    
    

11. The Department was extremely specific in Rule 12A- 1.11(20), pointing out that charges for waiters serving party tidbits were taxable. This does not mean, however, that other portions of the rules implementing Section 212.05, Florida Statutes, which were not similarly specific exempted charges for the service of waiters in connection with catering from taxation. The statutory definition of "sales price" in Section 212.02(4), Florida Statutes (1983), sweeps into the amount taxable all amounts paid for services which are part of a sale. Nothing in the rule on sales tax for dinners, Rule 12A-1.11(21) restricts the taxability of that transaction (nor could a rule do so).

RECOMMENDATION

It is RECOMMENDED that a Final Order be entered by the Department of Revenue finding Gourmet To Go, Inc. liable for sales tax on charges to its customers for services of waiters at dinners it catered during the period May 1, 1984, through April 30, 1988, with penalties and interest through the date of payment.

DONE and ENTERED this 5th day of September, 1989, at Tallahassee, Florida.

WILLIAM R. DORSEY, JR.

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 5th day of August, 1989.

APPENDIX TO THE FINAL ORDER IN DOAH CASE NO. 88-6367

Rulings on Proposals Made By The Petitioner, Gourmet To Go, Inc.

The substance of all facts proposed by Gourmet To Go, Inc. have been included in the Recommended Order.

COPIES FURNISHED:

Larry V. Bishins, Esquire 4548 North Federal Highway Ft. Lauderdale, FL 33308

Lealand L. McCharen, Esquire Assistant Attorney General The Capitol Building Tallahassee, FL 32399-1050

William D. Moore, General Counsel Department of Revenue

203 Carlton Building Tallahassee, FL 32399-0100

Katie D. Tucker, Executive Director Department of Revenue

104 Carlton Building Tallahassee, FL 32399-0100

Docket for Case No: 88-006367

Orders for Case No: 88-006367