The Issue The parties stipulated that the following legal issues were presented on the facts: When the taxpayer fails to claim the tax credit for sales tax on bad debts charged off during the month for which the return is filed as permitted by Section 212.17(8) Florida Statutes, may the taxpayer claim a refund of the overpayment pursuant to Section 215.26, Florida Statutes? Does claiming a bad debt credit on a return for a month later than the month in which the charge-offs were made constitute an "application for refund" within the meaning of Section 215.26(2), Florida Statutes? STIPULATIONS The parties entered into a written stipulation of the issues, of the facts, and stipulated to the introduction into evidence of the attachments to the written stipulation of facts and the Exhibits 1 through 6. The following are the pertinent findings of fact in this case.
Findings Of Fact Causeway Lumber Company, Inc., (Causeway) is a Florida corporation engaged in the sale of lumber and building materials. During the years 1973- 1977 it operated two yards; one at 2701 South Andrews Avenue, Fort Lauderdale, Broward County, and one and 400 Northwest 2nd Avenue, Boca Raton, Palm Beach County. Because it operated in two counties, separate tax returns were filed for the Fort Lauderdale yard and the Boca Raton yard. Causeway uses the accrual method of accounting, the specific charge-off method of writing off bad debts, and its fiscal year ends March 31. Causeway did not collect the sales tax on credit sales at the time such sales were made, but billed sales tax to its customers as part of the credit sales. Although the sales taxes were not received by Causeway at the time the credit sales were made, Causeway reported and paid the sales tax on credit sales on the return for the month in which the sale was made as required in Section 212.06, Florida Statutes. In March of 1974, 1975, and 1976 the accounts receivable were reviewed and the account deemed worthless were written off as uncollectable and so reported on the corporation's income tax returns for those years. Causeway attempted to take as a credit in September of 1976 all of the bad debts written off in March of 1974, 1975 and 1976. The taking of this credit was questioned by the Comptroller, and Causeway paid the taxes due on the September 1976 sales tax remittance and then filed an application for refund on January 20, 1978, pursuant to provisions of Section 215.26, Florida Statutes. The Comptroller denied the application for refund stating as the grounds that there was no authority in Section 212.17, Florida Statutes, for a refund. Causeway's two outlets overpaid sales taxes in the following amounts in the years indicated: 1974 1975 1976 Boca Raton $ 1,072.51 $ 9,208.17 $ 30,477.11 Ft. Lauderdale 3,323.15 10,237.33 10,004.22 $ 4,395.66 $ 19,445.50 $ 40,481.33
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends to the Comptroller that the taxpayer be refunded the taxes overpaid in 1975, and 1976, in the total amount of $59,926.83. DONE and ORDERED this 9th day of October, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of October, 1978. COPIES FURNISHED: Richard W. Roe 2900 East Oakland Park Boulevard Fort Lauderdale, Florida 33306 Harold F. X. Purnell Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32304 Eugene J. Cella General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32304 =================================================================
Findings Of Fact The parties agreed at the hearing that there were no issues of fact which remained to be determined. The parties stipulated that the relevant facts are as set out in paragraph 5 of the Petition for Administrative Hearing. The following findings are quoted directly from paragraph 5 of the Petition. Petitioner is a federally chartered savings and loan association. Petitioner initially employed the cash receipts and disbursements method of accounting for Federal Income Tax purposes. In a desire to more clearly reflect income, Petitioner applied for and received permission from the Internal Revenue Service allowing Petitioner to change its method of tax accounting from the cash to the accrual method, pursuant to Revenue Procedure 70-27. This change was to commence with the calendar year 1971. Consistent with this accounting method change, all net accrued income as of January 1, 1971, was recorded in its entirety in Petitioner's financial statements as of December 31, 1970. The total net adjustment required to convert to the accrual method was $758,911.00. Pursuant to an agreement entered into with the Internal Revenue Service, an annual adjustment of $75,891.00 was required. The annual adjustment spread the effect of the accounting change over a 10-year period, despite the fact that all the income was realized prior to January 1, 1971. On January 1, 1972, the Florida Income Tax Code became effective. Petitioner timely filed its 1970 and 1971 Florida Intangible Personal Property Tax Returns. Upon subsequent review of Petitioner's records, it became apparent that the intangible tax had been overpaid and a refund claim was submitted. The refund was issued to Petitioner by the State of Florida during the calendar year 1973 and reported in Petitioner's 1973 Federal Corporate Income Tax Return. On December 16, 1975, Respondent notified Petitioner that Petitioner was deficient in its payment of Florida Corporate Income Tax in the amount of $25,386.84. The total deficiency consisted of $3,267.00 for the year ended December 31, 1972; $19,202.00 for the year ended December 31, 1973; and $2,916.84 for the year ended December 31, 1974. Included in the alleged total deficiency of $25,386.84 is a tax in the amount of $14,696.70 for the year 1973. This tax is attributable to Petitioner's apportionment of a part of its 1973 income to sources outside of the State of Florida. Petitioner is no longer protesting this deficiency. On February 9, 1976, Petitioner filed its protest against Respondent's determination that a deficiency in tax existed. By letter dated March 9, 1976, Respondent denied Petitioner's protest filed on February 9, 1976.
Findings Of Fact In 1962, the Corporation decided to relocate its corporate offices from Newark, New Jersey, to the State of Florida. Implementing this decision, the Corporation secured a twenty year leasehold interest of an entire floor in the Universal Marion Building in Jacksonville, Florida, under which it was obligated to pay an annual rental of $52,000.00. Within a few months during the year 1962, the decision to relocate was rescinded. During the tax year in question, the Corporation retained a part-time employee in Florida for the sole purpose of attempting to either locate a purchaser of the leasehold interest or to avoid further obligations under the lease by negotiations and settlement with the landlord. This part-time employee received his directions from the corporate offices in Newark, New Jersey. Other than these efforts to relieve the burden of the unused leased premises, the Corporation conducted no commercial activities in the State of Florida during the tax year 1973. Although the Corporation's headquarters were ultimately moved to Jacksonville, in January 1976, the Corporation has never occupied the leased premises in question. In fact, in 1974, the Corporation entered into a sublease with the State of Florida for the duration of the lease. Pursuant to audit, DOR assessed the Corporation an additional $12,616.89 in income tax for the year ended December 31, 1973, using the three-factor formula method of apportionment.
The Issue Whether the Department of Revenue should assess Heftler Construction Company ("Taxpayer") for Florida corporate income taxes on a claim that: Taxpayer realized a gain under the Florida Income Tax Code when an asset acquired in 1971 (on liquidation of a joint venture) was sold in 1975 in satisfaction of an outstanding debt; and Taxpayer's losses created by the subtraction of foreign source income cannot operate to create or increase the Florida portion of the net operating loss carryover.
Findings Of Fact Formation and Liquidation of Joint Venture; Subsequent Sale of Asset Taxpayer is a New Jersey corporation, authorized to transact business in Florida. Heftler Realty Company ("Realty") is a Florida corporation, and is a subsidiary of Taxpayer. Taxpayer, for all years material to these proceedings, filed consolidated income tax returns with the Internal Revenue Service of the United States ("IRS") . Pursuant to the applicable provisions of the Internal Revenue Code ("IRC"), Taxpayer included in the income and expenses of its consolidated income tax returns the income and expenses of its operations in Puerto Rico. Taxpayer, for all years material to these proceedings, timely filed with the Department consolidated income tax returns. In 1969, Realty formed a joint venture with a company known as GACL, Inc., for the purpose of developing real property Realty, in accordance with its Joint Venture Agreement with GACL, Inc., prior to 1971, contributed to the joint venture the following assets with the following cost basis to Taxpayer on the date of contribution: ASSET DATE CONTRIBUTED TO JOINT VENTURE COST BASIS TO TAXPAYER ON DATE CONTRIBUTED Cash 3-5-69 $250,000 Land 3-5-69 2,000,000 In 1971, prior to the effective date of the Florida Income Tax Code ("Florida Code"), Chapter 220, Florida Statutes, the joint venture between Realty and GACL, Inc., was liquidated effective as of January 1, 1971. Pursuant to the plan of liquidation, Realty received, in liquidation of the joint venture, the assets as described in the attached Appendix. These assets had a then cost basis to the joint venture as described in the Appendix. The assets acquired by Realty in liquidation of the joint venture were subject to the debts described in the Appendix. Pursuant to the plan of liquidation of the joint venture, Realty agreed to acquire the assets and assume the attendant debts (itemized in the Appendix) as of January 1, 1971. At the time of the liquidation of the joint venture, Realty had a cost basis for its interest in the joint venture of a negative $285,749. (Realty had a negative basis in the assets because it sustained joint venture losses in excess of its contributions to the joint venture.) The net gain to Realty as' reported upon the federal income tax return of Taxpayer, after adjustment for depreciation, as a result of the liquidation was $1,238,37l. In 1971, Realty reduced its tax basis in the assets acquired in the liquidation. This adjustment (reduction) in the tax basis of the assets acquired by Taxpayer occurred prior to the effective date of the Florida Code. An asset acquired by Realty in 1971, pursuant to the plan of liquidation of the joint venture, was conveyed by Realty in 1975 to a creditor of Realty in satisfaction of debt. After adjusting the tax basis of the asset, a comparison of its book basis (to the joint venture) with the tax basis to Taxpayer after liquidation, reflects the following: Adjusted Basis as of Jan. 1, Tax Basis to Tax- Book Basis to payer or After Joint Venture Liquidation Difference 1971 $4,466,764 $3,055,722 $1,411,042 Accumulated Depreciation to Date of Sale (587,212) (414,541) (172,671) Adjusted Basis $3,879,552 $2,641,181 $1,238,371 For purposes of its Federal Income Tax, Taxpayer reported the transaction as a sale and computed the gain thereon as follows: $3,951,708 Expense of Sale $2,713,337 3. Total Gain $1,238,371 Gross Sale Price Cost or Other Basis and (The difference between the gross sales price and the adjusted basis referred to in paragraph 13 of $72,156 is an increase to the price due to escrow funds deposited with a mortgagee and assigned to the purchaser of the asset by Realty without Realty receiving reimbursement.) In computing the Florida income tax, pursuant to the Florida Code, for the fiscal year ending July 31, 1976, Taxpayer took as a subtraction an adjustment on line 8, Schedule II, page 2 of its income tax return. The subtraction was in the amount of the capital gain received upon the sale of the asset received in liquidation in the amount of $1,238,371. Taxpayer subtracted the gain, contending that it was realized prior to the effective date of the Florida Code. When acquired, the asset received in liquidation had a cost basis to the joint venture Of approximately $4,500,000. When the asset was distributed to Taxpayer, after the reduction by Taxpayer to the tax basis referred to in paragraph 11, the basis to Taxpayer of the asset was approximately $3,000,000. The tax basis in the amount of $3,000,000 was evidenced by the debts assumed by Taxpayer upon the liquidation; such assumption of debt is referred to in paragraph 7. Department contends that the gain on the sale of the asset acquired in liquidation was both realized and recognized in 1975 when the property was sold in satisfaction of a debt; it has issued a proposed assessment on that basis. Taxpayer contends that the gain was realized by Taxpayer for federal income tax purposes prior to the effective date of the Florida Code and that only the recognition of the gain occurred after the effective date of the Florida Code. II. 1975 Loss Created by Subtraction of Foreign Source Income; Attempt to Carryover Loss to Subsequent Years Taxpayer, in addition to the adjustment referred to above, in reporting income for its fiscal years ending July 31, 1976, July 31, 1977, and July 31, 1978, deducted a net operating loss carry-forward which included an item of $335,037 from its 1975 return (fiscal year ending July 31, 1976) and an item of $916,030 for fiscal year ending July 31, 1978, represented by a subtraction resulting from income earned in Puerto Rico. The subtraction resulted in losses during each of such years, which losses were carried forward by Taxpayer to the next ensuing year. Department contends that the losses created by the subtraction of foreign source income cannot be carried over to subsequent years to determine income and has issued a proposed assessment on that basis. Taxpayer contends that it is not the intent of the Florida Legislature to tax income derived from sources outside the United States and that the effect of a denial of the subtraction will result in the taxation, by Florida, of foreign source income received by Taxpayer.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department's proposed assessment of Taxpayer for corporate income tax deficiencies be issued. DONE AND RECOMMENDED this 21st day of January, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. 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 21st day of January, 1982.
The Issue The issue is whether Petitioner, Christopher B. Scott, as the managing member of PNC, LLC (PNC), is personally liable for a penalty equal to twice the total amount of the sales and use tax owed by PNC to the State of Florida.1/
Findings Of Fact The Department is the state agency charged with administering and enforcing the laws related to the imposition and collection of sales and use taxes. PNC is a now-dissolved Florida limited liability company that did business under the name "CHEAP" at 309 South Howard Avenue, Tampa, Florida. PNC was registered as a business and filed its Articles of Organization with the Secretary of State on June 16, 2010. Until the company was dissolved by the Secretary of State in 2018 for failure to pay the 2017 annual filing fees, Mr. Scott served as its managing member and had administrative control over the collection and payment of taxes. Verna Bartlett was PNC's controller. PNC was registered with the Department as a dealer pursuant to section 212.18, Florida Statutes, and was issued Sales and Use Tax Certificate of Registration 39-8015401140-8. A certificate of registration requires the taxpayer to file sales and use tax returns and pay to the Department all taxes owed as they are received. After making numerous attempts to collect delinquent sales tax owed by PNC for tax reporting periods in 2013 and 2014, the Department filed this action seeking to impose a personal penalty assessment against Mr. Scott, the managing member of the company. Section 213.29, Florida Statutes, provides that any person who has administrative control over the collection and payment of taxes and who willfully fails to pay the tax or evades the payment of the tax shall be liable to a penalty equal to twice the amount of tax not paid. The penalty is based only on the taxes owed, and not the interest and fees that have accrued. The statute provides that if the business liability is fully paid, the personal liability assessment will be considered satisfied. On January 18, 2018, the Department issued a NAPL against Mr. Scott after PNC failed to pay the sales and use taxes owed the State for the reporting periods from February 2013 through October 2014. The outstanding taxes, exclusive of interest or penalties, total $79,325.75. The NAPL imposes a total penalty of $158,647.50, or twice the amount of sales tax owed by PNC. No payments have been made on the account since the issuance of the NAPL, and, PNC, now closed, currently has a total liability in excess of $200,000.00. During the relevant time period, Mr. Scott was personally responsible for collecting PNC's sales tax and remitting it to the Department; he had the authority to sign checks on behalf of PNC; he made financial decisions as to which creditors should be paid; he made the decision to use the sales tax collected for the business and for stipulation payments; and he made the decision not to remit the sales tax that was collected. This was confirmed by PNC's controller, Ms. Bartlett, who responded to the Department's Requests for Admissions. Mr. Scott also confirmed to a Department tax specialist that the admissions provided by Ms. Bartlett were accurate. Mr. Scott either never remitted payment or did not remit payment timely on behalf of PNC for the following reporting periods: February, April, and December 2013, and January through October 2014. Tax warrants were issued and judgment liens were recorded for the following reporting periods: February, April, and December 2013, and January, February, and April through October 2014. Resp. Ex. 5 and 6. All warrants and liens relate to reporting periods that fall within the personal liability assessment period. A Notice of Jeopardy Finding and Notice of Final Assessment (Notice of Jeopardy) dated June 18, 2014, was issued to PNC pertaining to the April 2014 reporting period. Resp. Ex. This notice was issued after Mr. Scott ceased making regular tax payments, the estimated deficiency was substantial, and the Department determined that collection of the tax would be jeopardized by further delay. A Notice of Jeopardy and Notice of Final Assessment dated August 7, 2014, also was issued to PNC pertaining to the April, May, and June 2014 reporting periods. Resp. Ex. 12. Because PNC reported more than $20,000.00 in sales tax each year, unless a waiver was obtained, Mr. Scott was required to file and pay PNC's sales tax electronically for all reporting periods within the personal liability period. See § 213.755(1), Fla. Stat.; Fla. Admin. Code R. 12-24.003. Despite having obtained no waiver, Mr. Scott never filed returns or paid PNC's sales tax electronically. And even though he never remitted a payment electronically, Mr. Scott indicated on at least six sales tax returns during the relevant time period that sales tax for the reporting period was remitted electronically. The only conclusion to draw from this action is that Mr. Scott filed or directed the filing of these returns knowing them to be false. The record shows that, dating back to 2011, Mr. Scott has a long-standing history of failing to abide by the tax laws of the state as it relates to PNC. For example, on September 15, 2011, Mr. Scott was referred for criminal investigation by the state attorney for his failure to pay taxes. Also, numerous returns were filed without a payment. This is prima facie evidence of conversion of the money due. § 212.14(3), Fla. Stat. Respondent's Exhibit 1 summarizes numerous contacts by the Department's Tampa District Office with Mr. Scott regarding collection notices, telephone calls, emails, assessment letters, warrant letters, and the like in an effort to secure compliance with tax laws. It is fair to find that Mr. Scott willfully attempted to evade or avoid paying sales and reemployment taxes during the relevant period. To prevent its Sales and Use Tax Certificate of Registration from being revoked, PNC entered into a compliance agreement on July 10, 2013, to pay past due sales tax and reemployment tax totaling $65,789.25. The agreement required PNC to: (a) accurately complete all past due tax returns and reports no later than July 10, 2013; (b) remit all past due payments in accordance with the attached schedule, which required 11 monthly payments of $4,000.00 beginning on August 10, 2013, and a final balloon payment on July 10, 2014; (c) accurately complete and file all required tax returns and reports for the next 12 months; and (d) timely remit all taxes due for the next 12 months. A $15,000.00 down payment also was required to be paid on or before July 10, 2013. An addendum to the agreement (added by Mr. Scott) provided that "[a]ll payments, including the $15,000.00 down payment, shall first be applied to Sales and Use Tax." Although the down payment was made timely, the agreement was breached the first month (August) because Mr. Scott did not make the payment electronically. However, the agreement was not voided by the Department until October 12, 2013. Therefore, any payments made on or after October 12, 2013, were not considered compliance payments and are not subject to the addendum in the agreement. A somewhat confusing aspect of this dispute concerns Mr. Scott's contention, by way of cross-examination, that contrary to the addendum, the Department incorrectly applied his $15,000.00 down payment and subsequent compliance payments to the reemployment tax account, rather than the sales tax account, and that his sales tax liability should be reduced by that amount. As noted above, the addendum governs only the payments that predate October 12, 2013, which are the down payment ($15,000.00) and the August and September payments -- $4,000.00 each month. This issue was not raised by Mr. Scott until the Department issued a NAPL on April 13, 2017. The NAPL issued on April 13, 2017, indicated that the outstanding tax owed by PNC through October 31, 2014, was $90,808.17, and the personal assessment was twice that amount. In response to Mr. Scott's request, the Department acknowledged that it incorrectly applied the down payment to the reemployment account. Also, it took a second look at the two payments made in August and September, which predate the voiding of the agreement. The August installment payment consisted of two separate checks: $3,390.00 for sales tax and $610.00 for reemployment tax, and these amounts were applied in that manner. The September payment, $4,000.00, submitted in one check, was applied in the same manner as the August payment, with $610.00 going to the reemployment tax and the remainder to sales tax. Therefore, only $1,220.00 was incorrectly applied to the reemployment tax during those two months. On July 3, 2017, the Department reapplied a total of $16,551.00 from the reemployment tax account to the sales tax account for the relevant reporting periods. Mr. Scott contends the reapplication of the $16,551.00 to sales tax should reduce the amount of sales tax due by that amount. However, section 213.75(2) dictates that if a lien or warrant has been filed against the taxpayer, as is true here, the payment shall be applied in a priority order spelled out in the statute. Thus, the Department applied that amount in the following order: against the costs to record the liens against PNC; against the administration collection processing fee, if any; against any accrued interest; against any accrued penalty; and against any tax due. Under this priority order, the penalty/interest/fees categories totaled $5,066.58, while the tax liability category totaled $11,484.42. A detailed breakdown of this allocation is found in Respondent's Exhibit 29. Therefore, the total tax liability on the 2017 NAPL ($90,808.17) is reduced by $11,484.42, resulting in a total tax liability of $79,323.75, as shown on the updated 2018 NAPL. In the same vein, in his PRO, Mr. Scott argues that he was not given credit for payments of $9,110.24, $2,688.53, $178.28, and $1,321.80, which reduce his sales tax liability to $66,024.90 and the personal assessment to $132,049.80. See Pet'r Ex. 10. However, all of these payments (some of which are bank levies) were made after the compliance agreement was voided and do not apply to the reporting periods in this case. By way of cross-examination, Mr. Scott also contends that he was never given an accounting of what PNC owes despite "multiple requests" for the same. The record shows otherwise. On April 13, 2017, the 2017 NAPL was mailed to Mr. Scott, along with a ZT09, a computer-generated form which lists, in detail, a taxpayer's outstanding taxes owed by reporting period. A second copy of a ZT09 was faxed to him the following day. In his May 3, 2017, letter protesting the 2017 NAPL, Mr. Scott alleges that payments were not applied properly. In response, the Department sent a fax to Mr. Scott on May 10, 2017, listing checks that were not honored by the bank and requesting information concerning which payments PNC contends were not applied properly. In his response on May 12, 2017, Mr. Scott did not provide the requested information. On January 17, 2018, the 2018 NAPL was mailed to Mr. Scott, along with a ZT09. Finally, on April 12, 2018, per Ms. Bartlett's request, the Department mailed a ZT09 with the outstanding amounts due. Finally, in its PRO, the Department points out that after the hearing ended, it discovered that it made an error, in Mr. Scott's favor, in calculating his sales tax liability for the relevant reporting periods. Had it correctly calculated the amount of payments made by PNC, the sales tax liability for the relevant period would be increased from $79,323.75 to $84,444.35, which in turn would increase the personal assessment. However, the Department consents to the lower tax and assessed penalty amount, as reflected on the 2018 NAPL.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order determining that Petitioner, Christopher B. Scott, is liable to the Department for a penalty of $158,647.50. DONE AND ENTERED this 22nd day of April, 2019, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 2019.
The Issue Whether or not, on or about December 2, 1976, investigation revealed that Robert W. Pope, licensed under the Beverage Laws of the State of Florida, failed to file and pay his State Sales Tax for the licensed premises, known as Kitty's, located at 1020, 4th Street, South, St. Petersburg, Florida, in violation of 212, F.S., thereby violating 561.29, F.S.
Findings Of Fact Robert W. Pope is and at all times pertinent to this cause has been the holder of license no. 62-512, series 4-COP, held with the State of Florida, Division of Beverage to trade as Kitty's, located at 1020, 4th Street, South, St. Petersburg, Pinellas County, Florida. When the Respondent, Pope, began to operate the licensed premises he was given a registration sales tax number by the State of Florida, Department of Revenue. This number was provided in accordance with 212, F.S. That law required the remittance of the collected sales tax on a month to month basis, the period beginning with the first day of the month and ending with the last day of the month. The remittance was due on the first day of the following month and payable by the 20th day of the following month. Failure to pay by the 20th would result in a 5 percent penalty and 1 percent interest per month. The sales tax remittance due from the licensed premises for July, 1976 through November, 1976 was not made to the Department of Revenue. In December, 1976 the Department of Revenue filed a lien against the licensed premises to collect an amount due at that time of $2,200.66. As an aid to the collection of the account, the Department of Revenue levied the subject liquor license. Subsequently, in February, 1977 the Respondent made a $10,000 initial payment and three monthly installments to satisfy the lien on this licensed premises and another licensed premises which the Respondent owned. At present all taxes due and owing under 212, F.S. are current. The above facts establish that the Respondent failed to comply with the provisions of 212, F.S. pertaining to the remittance of sales tax from the Respondent to the State of Florida, Department of Revenue. This violation, thereby subjects the Respondent to the possible penalties of 561.29, F.S.
Recommendation It is recommended that the Respondent, Robert W. Pope, be required to pay a civil penalty in the amount of $750.00 or have the license no. 62-512, series 4- COP, suspended for a period of 20 days. DONE AND ENTERED this 28th day of July, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William Hatch, Esquire Division of Beverage 725 South Bronough Street Tallahassee, Florida 32304 Robert W. Pope, Esquire 611 First Avenue, North St. Petersburg, Florida 33701
Findings Of Fact American Beryllium Company, Inc. is a subsidiary of Loral Corporation. On March 16, 1981, American Beryllium Company, Inc. filed a separate company form DR-601-C for Florida Intangible Tax Return reflecting a tax liability of 52,483.00 and paid this amount accordingly upon this date. The above form and check were processed by the Department of Revenue on April 9, 1981. On April 29, 1981, the Loral Corporation filed a separate company 1981 form DR-601-C reflecting a tax liability of $45.70 and paid this amount accordingly upon this date. The above form and check were processed by the Department of Revenue on May 4, 1981. On April 27, 1984, Loral Corporation and American Beryllium Company, Inc., filed a consolidated and amended 1981 form DR-601-C reflecting a tax liability of $35.07. Also, on April 27, 1984, Loral Corporation and American Beryllium Company, Inc., filed a 1981 form DR-26 refund claim exclusive of interest and penalties in the amount of $2,443.63, which is $85.07 less than the $2,528.70 total amount of taxes reported and paid in 1981. The above refund claim was received by the Department of Revenue on May 1, 1984. The Office of the Comptroller denied Petitioner's refund request in the amount of $2,443.63. The Office of the Comptroller authorized and paid a refund in the amount of $45.70 to the Loral Corporation which it paid as taxes owed on April 29, 1981. This leaves a remaining balance of $2,397.93 paid by American Beryllium Company, Inc. as tax it paid on March 16, 1981.
The Issue There is little controversy as to the facts in this cause. The issue is essentially a legal issue and is stated as follows: When parties act in reliance and in conformity to a prior construction by an agency of a statute or rule, should the rights gained and positions taken by said parties be impaired by a different construction of said statute by the agency? Both parties submitted post hearing proposed findings of fact in the form of proposed recommended orders filed March 17 and 18, 1983. To the extent the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based on the most credible evidence, or not being a finding of fact.
Findings Of Fact The Petitioner, Vanguard Investment Company, is a Florida corporation with its principal offices at 440 Northeast 92nd Street, Miami Shores, Florida 33138. On or about March 3, 1981, Vanguard purchased an aircraft described as a Turbo Commander, serial number N9RN, from Thunderbird Aviation, Inc., for a purchase price of $120,000 plus $4,800 in sales tax. The sale price plus the sales tax was paid by Vanguard to Thunderbird, which remitted the $4,800 in sales tax to the Department of Revenue (DOR) less a three percent discount as authorized by law. On February 27, 1981, Vanguard had executed a lease of said aircraft to General Development Corporation for a term of two years commencing on March 1, 1981, contingent upon Vanguard's purchase of said aircraft from Thunderbird. Prior to March 1, 1981, General Development had leased said aircraft from Thunderbird, and the least terminated on February 28, 1981. Vanguard purchased said aircraft for the sole purpose and in anticipation of continuing its lease to General Development. Vanguard never took possession or control of said aircraft, which remained in General Development's possession at Opa-locka Airport in Dade County, Florida. No controversy exists that all sales tax payable under General Development's lease of the aircraft, both with Thunderbird and subsequently with Vanguard, had been remitted to DOR with no break in continuity of the lease as a result of the change in ownership of the aircraft on or about March 1, 1981. At the time Vanguard purchased the aircraft from Thunderbird, Vanguard had not applied for or received a sales and use tax registration number pursuant to Rule 12A-1.38, Florida Administrative Code. Vanguard applied for said sales and use tax registration number on or about April 2, 1981, approximately 30 days after the purchase of said aircraft. The sales and use tax registration number was granted by DOR on or about April 23, 1981. Shortly thereafter, Vanguard inquired of DOR concerning a refund of the $4,800 in sales tax paid on the aircraft plus the three percent discount taken by Thunderbird. In lieu of Vanguard's providing Thunderbird a resale certificate and having Thunderbird apply for the sales tax refund, it was suggested that Vanguard obtain an assignment of rights from Thunderbird and apply directly for the refund because Thunderbird had been dissolved immediately after the sale of the aircraft to Vanguard. Acquisition of the assignment of rights from Thunderbird by Vanguard was delayed by the dissolution of Thunderbird and the death of Thunderbird's principal officer. Vanguard received the assignment of rights from Thunderbird on or about July 1, 1982, and immediately applied for a refund of the sales tax. Said application for refund was well within the three years permitted by Florida law to apply for a sales tax refund. On November 22, 1982, the Office of Comptroller (OOC) notified Vanguard of its intent to deny Vanguard's application for the sales tax refund because Vanguard had failed to obtain a sales and use tax registration number prior to purchasing the aircraft from Thunderbird. At the time of the purchase, it was the policy of DOR to permit individuals to apply late for a sales and use tax registration number and not to deny refunds on the basis that the applicant did not have the sales and use tax registration number at the time of the taxable purchase. On or about July 1, 1982, this policy of DOR was altered to conform with the decision of the Florida Supreme Court in State Department of Revenue v. Robert N. Anderson, 403 So.2d 297 (Fla. 1981). Vanguard was aware of the DOR policy at the time of the sale, relied on that policy, and conformed to that policy. It was clearly stated that had Vanguard applied for its refund even a month earlier, in June of 1982, the refund would have been approved under the then-existing policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the application of Vanguard Investment Company for refund of sales tax be approved, and that said refund be paid by the Office of Comptroller. DONE and RECOMMENDED this 25th day of April, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 25th day of April, 1983. COPIES FURNISHED: Edward S. Kaplan, Esquire 907 DuPont Plaza Center Miami, Florida 33131 William G. Capko, Esquire Assistant Attorney General Office of Comptroller The Capitol, Suite 203 Tallahassee, Florida 32301 Thomas L. Barnhart, Esquire Assistant Attorney General Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Office of Comptroller The Capitol Tallahassee, Florida 32301
The Issue What relief, if any, should be provided by Petitioner to Respondent as the result of an accidental overpayment, and the subsequent recoupment of the overpayment?
Findings Of Fact Ms. Mills has been employed by DOC for approximately four years, and was employed by DOC as of the date of hearing. Due to human error in implementing a new payroll system (KRONOS), on March 17, 2017, Ms. Mills was overpaid in the amount of $494.01. The error affected over 5,000 employees of DOC. To address the overpayment, DOC corrected the error by deducting $247.01 from Ms. Mills’ regular paycheck of April 27, 2017, and $247.00 from Ms. Mills’ regular paycheck of May 12, 2017, for a total adjustment of $494.01. Due to the erroneous overpayment, an excess amount of federal income tax withholding ($155.65) was withheld from Ms. Mills’ paycheck of March 17, 2017. Dave Vermette, DOC’s senior personnel manager, attempted to determine whether it was possible to correct the excess federal income tax withheld by reducing future federal tax withholding during the remainder of 2017. Unfortunately, it was determined that such an adjustment could not be made. To address Ms. Mills’ concerns that the erroneous overpayment might affect her eligibility for means-tested public assistance, on June 1, 2017, DOC provided Ms. Mills with a letter explaining the overpayment so that Ms. Mills could show it to any of the agencies from which she receives benefits based on her income. The letter made clear that Ms. Mills was in no way responsible for the overpayment and offered to respond to any questions that other agencies might have about the incident. The June 1, 2017, DOC letter confirmed that, as of that date, Ms. Mills’ year-to-date earnings statement was correct. At hearing, Ms. Mills testified that she was concerned that the overpayment might jeopardize her eligibility for assistance from the Florida Department of Children and Families (DCF). However, at hearing she presented no evidence that her eligibility would, in fact, be affected. If in the future Ms. Mills’ eligibility for assistance from DCF is adversely affected by DOC’s overpayment error, she will have an opportunity at that time to contest DCF’s determination pursuant to the provisions of the Administrative Procedure Act, chapter 120, Florida Statutes. DOC did not purposely overpay Ms. Mills, and the amount of the overpayment was quickly recouped by DOC. DOC has taken all reasonable steps to mitigate any potential effects of the overpayment error. The excess federal income tax withholding will be recovered by Ms. Mills when she files her 2017 federal income tax return. Other than the speculative effect on Ms. Mills’ eligibility for DCF assistance, Ms. Mills did not establish that she had suffered injury in fact as a result of the overpayment error. At hearing, and in her PRO, Ms. Mills was non-specific about the relief that she was requesting. In her PRO, Ms. Mills stated that she “respects this court’s ability and duty to determine an appropriate final order based on all information related to this case.” She went on to state that if there is a monetary award, it should in no way be considered to be additional income accruing to her. Ms. Mills failed to prove that she had suffered any injury as the result of the DOC error. Thus, even if the undersigned was inclined to recommend monetary relief, there is no basis in this record upon which to determine an appropriate monetary award.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petition filed by Nancy E. Mills be dismissed. DONE AND ENTERED this 18th day of January, 2018, in Tallahassee, Leon County, Florida. S W. DAVID WATKINS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 2018. COPIES FURNISHED: Nancy Mills 191 Nursery Road Monticello, Florida 32344 (eServed) Maria Shameem Dinkins, Esquire Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399 (eServed) Julie L. Jones, Secretary Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 (eServed) Kenneth S. Steely, General Counsel Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 (eServed)
