The Issue The issue in this case is whether the Respondent, R & R Sod Contractors, Inc., owes the Petitioner for sod purchased from the Petitioner and, if so, the amount presently owed.
Findings Of Fact The Petitioner is in the business of raising and selling sod in the State of Florida. During the past few years, R & R has been a frequent customer of the Petitioner and has purchased large amounts of sod from the Petitioner. Prior to April of 1998, R & R had a credit account with the Petitioner. The terms of the credit agreement included the following: "In the event the account becomes delinquent, and will be referred to a licensed collection agency or an attorney, Customer agrees to pay all costs and expenses of collection including reasonable attorney's fees, court costs, and costs incurred on appeal." During April of 1998, R & R's account with the Petitioner became delinquent. The Petitioner referred the delinquent account to an attorney. The attorney filed a lawsuit against R & R and also filed a complaint with the Department to collect the delinquency by asserting a claim against the bond posted by R & R. The 1998 account delinquencies were resolved in December of 1998, when the Department issued a check to the Petitioner in the amount of $48,431.00. That check paid the full amount of all unpaid invoices from the Petitioner to R & R as of December of 1998. In the process of collecting the $48,431.00 debt from R & R during 1998, the Petitioner incurred costs and attorney's fees in the amount of $1,644.00. These costs and attorney's fees were in addition to the $48,431.00 debt that was paid by the check from the Department. In January of 1999, the Petitioner again began to sell sod to R & R, but only on a cash basis. In the latter part of February of 1999, R & R bought approximately $2,500.00 of sod from the Petitioner which they paid for with a $2,500.00 cashier's check payable to the Petitioner. Although the cashier's check was given to the Petitioner by R & R, the face of the cashier's check identified the remitter as "Ely Sod, Inc." 3/ At the time the Petitioner received the $2,500.00 cashier's check described above, the Petitioner had an unsatisfied judgment against Ely Sod, Inc. When the cashier's check first went through the Petitioner's bookkeeping system, it was treated as a payment by Ely Sod, Inc., to the Petitioner, and was applied to reduce the amount of the judgment owed by Ely Sod, Inc. Consequently, none of the $2,500.00 cashier's check was initially applied towards the amounts owed by R & R. The misapplication of the proceeds of the $2,500.00 cashier's check discussed above apparently produced a great deal of confusion between the Petitioner and R & R regarding the status of R & R's account with the Petitioner. In this regard the Petitioner was especially concerned about the fact that R & R, which was supposed to be on a "cash only" basis, appeared to be $2,500.00 in arrears in its payments to the Petitioner. During the course of resolving the issue of the misapplied cashier's check, the Petitioner became aware of the fact that R & R had never paid the Petitioner's costs and attorney's fees related to the 1998 litigation. Ultimately, it was agreed between the attorneys representing the Petitioner and R & R that the proceeds of the $2,500.00 cashier's check should be applied to pay the costs and attorneys fees in the amount of $1,644.00 incurred by the Petitioner in the 1998 litigation, and that the balance of $856.00 would be paid to R & R or would be applied to any outstanding debts of R & R. Consistent with the agreement, $1,644.00 was applied to pay the Petitioner's costs and attorneys fees, and $856.00 was applied towards the unpaid amounts owed by R & R for sod purchased from the Petitioner Review of the invoices, payments, and accounts between the Petitioner and R & R reveals that, after the agreed application of funds described in paragraph 7, above, R & R still owes the Petitioner the amount of $1,844.00 for sod purchased from the Petitioner. 4/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order (1) finding that R & R is indebted to the Petitioner in the amount of $1,844.00; (2) directing R & R to make payment to the Petitioner in the amount of $1,844.00 within 15 days following the issuance of the order; and (3) announcing that if payment in full of this $1,844.00 indebtedness is not timely made, the Department will seek recovery from ICNA, R & R's surety. DONE AND ENTERED this 7th day of April, 2000, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 2000.
The Issue The issues posed for decision are: 1. Whether the Respondent, by its agent Lawrence McCarthy, unlawfully discharged Jerome Cilhar on June 21, 1976, in violation of Section 447.501(1)(b), of the Act. 2 . Whether the Respondent, by its agent and representative, Lawrence McCarthy, unlawfully interrogated and threatened employees on April 30, and May 4, 1976, within the meaning of Section 447.501(1)(a), of the Act. Based upon my observation of the witnesses and their demeanor while testifying, including the entire record compiled herein) I make the following:
Findings Of Fact The Respondent, City of Gulfport, Florida, is a Florida municipal corporation located in Pinellas County, Florida. During times material to this proceeding, the City Manager was Mr. Harry Perkins (Perkins) who had the ultimate authority over personnel matters including hirings, discharges, levels of manpower, administration of federal employment assistance programs, as well as labor relations. During times material to this proceeding, Mr. Lawrence McCarthy (McCarthy) was employed by Respondent as Director of Public Works. As such, he had operational responsibility for sanitation, water and sewer, streets and parks among others. While McCarthy had the authority to manage his department, the hiring and discharge of employees and the general administration of budgets was handled by Perkins with some input and recommendation by McCarthy. During 1975, Gulfport contracted with Pinellas County, Florida to be a member of a consortium to receive federal supplemental employment assistance funds from the federal government under the Comprehensive Employment and Training Act (CETA). Under this contract, Gulfport was required to follow all federal rules and regulations adopted under the CETA program. In March, 1975, Mr. Jerome Cilhar (Cilhar or the alleged discriminatee) had been unemployed for the requisite period of time to qualify for employment under the Pinellas County CETA program. Cilhar applied for a CETA position with Gulfport and, after the interview, was hired as a sanitation worker in the Public Works Department on March 3, 1975. He (Cilhar) was hired along with a Mr. Johnson who was also hired by Respondent under the CETA prograin as a sanitation worker, On July 17, 1975, an election was conducted by PERC among a comprehensive unit of Respondent's blue and white collar employees. The Petitioner therein did not receive a majority of the valid ballots cast. With these facts, both Perkins and McCarthy were under the impression that no union organizational campaign could begin until after the expiration of a one year period from the date of the election. Respondent operates on a fiscal year basis from October 1, until September 30. For the fiscal year 1975 to 1976, Respondent had budgeted approximately 130 positions for employees. In April and May, 1976, testimony reveals that Perkins became concerned that estimated revenues from services and taxes would not be reached during fiscal year 1975 through 1976 and that expenses would exceed the amount estimated. In this regard, it was noted that Respondent realized an operating deficit of approximately $200,000 for the fiscal year 1975 to 1976. In response to projected deficits, Perkins began personnel cutbacks in May, 1976, since personnel costs represented the largest single budget expenditure. Between May of 1976 and September 30, 1976, Perkins trimmed the City's work force by approximately 20 percent or a net loss of 26 employees. (See Respondent's Exhibit #4). In this regard, the evidence revealed that the City operated the sanitation department without any upward manpower adjustments until February, 1977, when employees were transferred to that area. Mr. Cilhar stated that he voluntarily informed Mr. McCarthy (the Public Works Director) of his desire for a union in late April, 1976. He testified that he and Barney White, a fellow employee in the sanitation department volunteered this information respecting their union activity because White was upset about the lack of pay raises. He testified that Barney White took the initiative in the conversation with McCarthy and in this regard, the evidence revealed that White who, as best as the record reveals, made all of the comments respecting their union activities. Cilhar testified that he noted no change in his relationship with the City and its employees during the six week interim between the date he and White made known their union activities to Respondent's agent (McCarthy) and the date of his discharge on June 21, 1976. Evidence reveals that Respondent made the decision (jointly by Perkins and McCarthy) to retain CETA employee Johnson, whose seniority was equal to Cilhar's, based on the fact that Johnson was more versatile in terms of his employment skills and Respondent was of the opinion that he would be of more assistance in that he could be assigned to a multitude of tasks. Cilhar also advanced the position that Respondent terminated him because he was arranging to schedule a union meeting on the date that he was discharged. The testimony in this regard establishes, on balance, that the Respondent made its decision to terminate Cilhar on Friday, June 18, but could not locate Cilhar because he had left to go home when the final decision was made by Respondent. He was contacted and advised of the termination decision by Respondent early the following Monday, June 21, 1976. He was given an exit interview and advised that his job was being abolished due to the lack of CETA fundings for the next fiscal year. He was also paid for his accrued annual leave from CETA funds. In this regard, Respondent established that this was done to curb employment costs from municipal funds since the payment of Cilhar's leave would have come from municipal funds had the decision been postponed until the end of the fiscal year. It was also noted in this regard that in its effort to realize economy through personnel cuts, Perkins terminated Ryan Larison, a budgeted city employee in the Sanitation Department on June 16, 1976 and thereby realized an economic savings. Pertinent CETA rules and regulations as well as the Respondent's contract with Pinellas County required that the City utilize federal CETA funds only as supplemental to budgeted employment positions. Thus Respondent could not maintain CETA positions instead of budgeted positions under its contract and the regulations. See Respondent's Exhibit #2, Section 205(c)(8). With these facts, I conclude that the Respondent did no more than it was required to do or in fact was compelled to do based on the financial restraints that it was operating under and its regulations with Pinellas County under the CETA program. As Respondent aptly notes, union activity does not insulate an employee from discharge for cause. While there were some uncertainties in this record, and some suspicions automatically arise from the fact that a union adherent was discharged while an employee of equal seniority with, as best as can be determined by the record, little or no union sympathies, these suspicions provide no substitute for record evidence upon which a finding can be made that the Respondent discharged the alleged discriminatee based on his union sympathies or desires as alleged in the complaint. I shall therefore recommend that this allegation be dismissed. THE ALLEGED THREATS AND INTERROGATION The complaints cite two instances in which the Respondent's agent, McCarthy, engaged in unlawful threats and/or interrogation. Witnesses testifying to these remarks during the hearing were Messrs. McCarthy and Rousseau. Both testified that in essence McCarthy warned that "they had a constitutional right to do any damn thing they wanted, but while on City property and on City time, solicitation of union activities was not condoned. Any one I heard would be subject to dismissal". McCarthy testified frankly and openly with respect to his remarks to employees respecting solicitation while on City time and property. Given all of the circumstances of this case and the complete absence of any evidence indicating that the Respondent engaged in any independent acts to unlawfully interfere with, restrain or coerce employees to exercise those rights guaranteed them in Chapter 447, I am of the opinion that the remarks given employees by McCarthy respecting solicitations for unions on City time on City property did not rise to the level of unlawful activity as defined in Chapter 447.501(1)(a), Florida Statutes. Accordingly, I shall recommend that the complaint allegations be dismissed.
Recommendation Based on the foregoing findings of fact and conclusions of law, I hereby recommend that the complaint filed herein be dismissed in its entirety. RECOMMENDED this 3rd day of October, 1977, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Frank E. Hamilton, Jr., Esquire 101 East Kennedy Boulevard Tampa, Florida 33602 William E. Sizemore, Esquire Post Office Box 3324 Tampa, Florida 33601
The Issue Whether Petitioner qualifies for the renewal of a consumer certificate of exemption as a qualified religious organization pursuant to Section 212.08(7)(o), Florida Statutes?
Findings Of Fact Petitioner is an active not-for-profit corporation organized under the laws of the State of Florida. It maintains exempt status under Section 501(c)(3) of the Internal Revenue Code. The Respondent is the state agency charged with the administration of the tax laws of the State of Florida, including those dealing with the grant or denial of consumer certificates of exemption to qualified organizations. Reverend Roy Harthern is an ordained Assembly of God minister who previously had a career as a minister in several churches in Texas and Florida, as well as founding a Christian magazine and a Christian television station in Florida. The Reverend and Mrs. Harthern are evangelists and Bible teachers. In 1983, Reverend Harthern and his wife, Pauline, founded the organization from which the Reverend and Mrs. Harthern practice an itinerant ministry. They preach in different established churches each week, both inside and outside of the State of Florida and the United States. In the past, Reverend Harthern has had a regular religious show on television. Reverend Harthern also writes, records religious tapes and has a weekly radio program on a station owned by others. Petitioner does not have an established physical place of worship at which nonprofit religious services are regularly held; does not provide transportation for church members or other services; and does not provide services to state prisoners. There has been no substantial change in the type or nature of Petitioner's ministry since its founding in 1983. Respondent issued a certificate of exemption to Petitioner in 1983 as a "religious organization." Petitioner has renewed the exemption, in five-year intervals, ever since. Respondent has never sought to revoke or suspend Petitioner's exempt status since 1983. On July 18, 1997, Petitioner applied to renew its consumer certificate of exemption as a "religious organization." Its previous certificate was issued on October 6, 1992, and was due to expire on October 5, 1997 There has been no substantive changes to the implementing statute during the relevant time period. On October 13, 1997, Respondent issued its Notice of Intent to Deny to Petitioner on the grounds that Petitioner did not have an established physical place of worship at which nonprofit religious services and activities were regularly conducted.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a Final Order denying Petitioner's renewal application for exemption, and the provisions of Section 212.08(7)(o)2.1., Florida Statutes. DONE AND ENTERED this 9th day of April, 1998, at Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1998. COPIES FURNISHED: Roy Harthern, President Roy Harthern Ministries, Inc. Post Office Box 915971 Longwood, Florida 32791 Rex D. Ware, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact 1. Petitioner is a Florida corporation wholly owned by Mr. Thomas C. Birkhead, president. Petitioner owns and operates the Satellite Motel in Cocoa Beach, Florida. The Audit Respondent conducted a sales and use tax audit of Petitioner's business records for the period September 1, 1985, through August 31, 1990. Respondent determined a deficiency and assessed Petitioner for $15,373.62, including tax, penalty, and interest through May 13, 1991. The assessment is for $1,922.42 in sales tax, $7,646.25 in use tax, $2,392.20 in delinquent penalty, and $3,412.75 in interest through May 13, 1991. Interest accrues daily in the amount of $3.15. Respondent made a prima facie showing of the factual and legal basis for the assessment. Petitioner failed to produce credible and persuasive evidence to overcome the prima facie showing. The audit and assessment are procedurally correct. Tax, interest, and penalty are correctly computed. Sampling Petitioner failed to maintain adequate records of its sales and purchases. Respondent properly conducted an audit by sampling Petitioner's available books and records in accordance with Section 212.12(6)(b), Florida Statutes. Although Petitioner's records of sales and purchases were inadequate, Petitioner produced some books and records for the entire audit period. Respondent properly limited the applicable penalty to a delinquent penalty. Audit Period Respondent is authorized to audit Petitioner for the period September 1, 1985, through August 31, 1990. Effective July 1, 1987, the period for which taxpayers are subject to audit was extended from three to five years. 1/ When Respondent conducted the audit, Respondent was authorized to conduct an audit within five years of the date tax was due. 2/ Tax owed by Petitioner for the period beginning September 1, 1985, was not due until the 20th day of the month following its collection. 3/ Therefore, Respondent was authorized to audit Petitioner's records anytime before October 20, 1990. 4/ On September 13, 1990, Respondent issued a Notice Of Intent To Audit Books And Records of the Petitioner (the "Notice Of Intent"). The Notice Of Intent tolled the running of the five year audit period for up to two years. 5/ Respondent completed its audit and issued its Notice Of Intent To Make Sales And Use Tax Audit Changes on May 13, 1991. 2. Sales Tax Petitioner sells snacks and beverages over the counter at the Satellite Motel. The sale of such tangible personal property is subject to sales tax. As a dealer, Petitioner must collect the applicable sales tax and remit it to Respondent. During the audit period, Petitioner failed to collect and remit applicable sales tax. As a dealer, Petitioner is liable for the uncollected sales tax. Respondent properly assessed Petitioner for $1,922.42 in uncollected sales tax. 3. Use Tax Petitioner rents televisions and linens and purchases business forms from Florida vendors. The rental and sale of such tangible personal property is subject to sales tax. During the audit period, Petitioner failed to pay sales tax to Florida vendors and used the televisions, linens, and business forms in its business at the Satellite Motel. Petitioner is liable for use tax on the use of those items during the audit period. Respondent properly assessed Petitioner for use tax in the amount of $7,646.25.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order upholding the assessment of tax, penalty, and interest through the date of payment. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 25th day of October, 1994. DANIEL MANRY 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 25th day of October, 1994.
The Issue Are Petitioners entitled to repayment of funds paid to the State Treasury as intangible taxes in relation to accounts receivable generated by sales made in the state of Florida? See Section 215.26, Florida Statutes.
Findings Of Fact Specialty Products & Insulation Co. (Specialty Products or Petitioner), A C & S, Inc. (A C & S or Petitioner), and Centin Corporation (Centin or Petitioner) are sibling companies owned by a common corporate parent company. Each of the three Petitioner companies is domiciled in a state other than Florida, and each has its headquarters in Pennsylvania. The Department is an agency of the state of Florida charged with the duty of administering Chapter 199, Florida Statutes, involving intangible taxes. Specialty Products, A C & S, and Centin remitted intangible taxes to the state of Florida for tax years 1993, 1994, and 1995. By letter dated June 17, 1996, Special Products and A C & S sought refunds from the Department of intangible taxes in the amounts of $19,848.01 and $4,796.41, respectively. By letter dated July 23, 1996, Centin also sought a refund from the Department of intangible taxes in the amount of $4,924.34. The Petitioners' refund applications argued that a refund of intangible taxes was due because the account receivable on which the taxes had been paid did not have a taxable situs in the state of Florida. On August 28, 1996, the Department issued Notices of Decision of Refund Denial to Specialty Products and A C & S, denying their refund applications in their entirety. On January 21, 1997, the Department issued its Notice of Decision of Refund Denial to Centin, also denying in its entirety Centin's application for refund. All three of the Petitioners timely challenged the Department's notices of decision by filing petitions for administrative hearings. Each of the petitions was originally assigned a separate case number by the Division of Administrative Hearings. By order dated January 16, 1997, Specialty Products and Insulation Co., v. Department of Revenue, (Case No. 96-5098) and A C & S, Inc., v. Department of Revenue, (Case No. 96-5099) were consolidated. By order dated January 23, 1998, Centin Corporation v. Department of Revenue, (Case No. 97-1115) was consolidated with the other two cases, as well. Specialty Products and Insulation, Co. Specialty Products is a building construction company operating in the state of Florida both as a contractor and by making sales of building materials to other contractors at retail. At all times relevant to this matter, Specialty Products was registered to do business as a non-domiciliary with the Florida Department of State, Division of Corporations. At all times relevant to this matter, Specialty Products was registered as a dealer with the Department of Revenue for purposes of collecting and remitting sales taxes. Although it is headquartered in Pennsylvania, at all times relevant to this matter, Specialty Products maintained a number of branch offices in the state of Florida through which it conducted business, including in Pompano Beach, Medley, Orlando, Tampa, and Fort Myers. At its various Florida branch offices, Specialty Products employed branch managers, operation managers, sales representatives, inside sales people, sales service clerks, office coordinators, warehousers and truck drivers. During the period from 1993 through 1995, Specialty Products made retail sales of its products from its Florida branch offices to Florida customers. During the period from 1993 through 1995, Specialty Products remitted intangible taxes to the state of Florida on the accounts receivable that were generated by its retail sales to its Florida customers. Specialty Products does not employ any credit managers at any of its Florida branch offices. Specialty Products' credit service, credit, cash application, and accounting departments are all located in Pennsylvania. When a customer seeks credit from Petitioner in order to purchase materials or services, the customer executes a credit application and contract for purchase at Petitioner's Florida branch office. With the exception of those described in paragraph 20, below, all applications for credit submitted by its Florida customers are forwarded by Petitioner's Florida branch offices to Petitioner's credit department in Pennsylvania for review and approval. Limited authority for granting credit (in an amount up to $5,000) to a Florida customer in an emergency is delegated to the branch manager located at each Florida branch office. All corporate bank accounts are located in Pennsylvania. All payments relating to sales made in the state of Florida are received and recorded in Pennsylvania, and all deposits are made into Petitioner's bank account in Pennsylvania. If a Florida customer sends a payment to a Florida branch office, this payment is forwarded to the Pennsylvania offices of the Petitioner to be recorded, processed, and deposited. All control procedures related to Specialty Products' accounts receivable are performed by employees located in Pennsylvania. No cash payments or bank accounts are maintained by Specialty Products in the state of Florida. A C & S, Inc. A C & S, Inc., is an insulation contracting company specializing in the thermal insulation of mechanical systems, and it operates in the state of Florida. At all times relevant to this matter, A C & S, Inc., was registered to do business as a non-domiciliary with the Florida Department of State, Division of Corporations. At all times relevant to this matter, A C & S, Inc., was registered as a dealer with the Department of Revenue for purposes of collecting and remitting sales taxes. Although it is headquartered in Pennsylvania, at all times relevant to this matter, A C & S, Inc., maintained at least one branch office in the state of Florida through which it conducted business. This branch office is located in Jacksonville, Florida. A C & S, Inc., also had a branch office in Merritt Island, Florida, until August 1995. At its Florida branch office, A C & S, Inc., employed a district manager, contract manager, construction superintendent, secretary, more than one sales representative, and an estimator. During the period from 1993 through 1995, A C & S, Inc., remitted intangible taxes to the state of Florida on the accounts receivable that were generated by its contracting sales to its Florida customers. A C & S, Inc., does not employ any credit managers at any of its Florida branch offices. A C & S, Inc.'s credit service, credit, cash application, and accounting departments are all located in Pennsylvania. When a customer seeks credit from Petitioner in order to purchase materials or services, the customer executes a credit application and contract for purchase at Petitioner's Florida branch office. With the exception of those described in paragraph 35, below, all applications for credit submitted by its Florida customers are forwarded by Petitioner's Florida branch offices to Petitioner's credit department in Pennsylvania for review and approval. Limited authority for granting credit (in an amount up to $5,000) to a Florida customer in an emergency is delegated to the branch manager located at each Florida branch office. All corporate bank accounts are located in Pennsylvania. All payments relating to sales made in the state of Florida are received and recorded in Pennsylvania, and all deposits are made into Petitioner's bank account in Pennsylvania. If a Florida customer sends a payment to a Florida branch office, this payment is forwarded to the Pennsylvania offices of the Petitioner to be recorded, processed, and deposited. All control procedures related to A C & S, Inc.'s accounts receivable are performed by employees located in Pennsylvania. No cash payments or bank accounts are maintained by A C & S, Inc., in the state of Florida. Centin Corporation Centin Corporation is an insulation contracting company operating in the state of Florida. At all times relevant to this matter, Centin Corporation was registered to do business as a non-domiciliary with the Florida Department of State, Division of Corporations. At all times relevant to this matter, Centin was registered as a dealer with the Department of Revenue for purposes of collecting and remitting sales taxes. Although it is headquartered in Pennsylvania, at all times relevant to this matter, Centin Corporation maintained at least one branch office in the state of Florida through which it conducted business. This branch office is located in Pompano Beach, Florida. At its Florida branch office, Centin employed a branch manager, construction superintendent, secretary, and more than one sales representative. During the period from 1993 through 1995, Centin remitted intangible taxes to the state of Florida on the accounts receivable that were generated by its contracting sales to its Florida customers. Centin does not employ any credit managers at any of its Florida branch offices. Centin's credit service, credit, cash application, and accounting departments are all located in Pennsylvania. When a customer seeks credit from Petitioner in order to purchase materials or services, the customer executes a credit application and contract for purchase at Petitioner's Florida branch office. With the exception of those described in paragraph 50, below, all applications for credit submitted by its Florida customers are forwarded by Petitioner's Florida branch offices to Petitioner's credit department in Pennsylvania for review and approval. Limited authority for granting credit (in an amount up to $5,000) to a Florida customer in an emergency is delegated to the branch manager located in each Florida branch office. All corporate bank accounts are located in Pennsylvania. All payments relating to sales made in the state of Florida are received and recorded in Pennsylvania, and all deposits are made into Petitioner's bank account in Pennsylvania. If a Florida customer sends a payment to a Florida branch office, this payment is forwarded to the Pennsylvania offices of the Petitioner to be recorded, processed, and deposited. All control procedures related to Centin's accounts receivable are performed by employees located in Pennsylvania. No cash payments or bank accounts are maintained by Centin in the state of Florida.
Recommendation Based upon the facts found in the conclusions of law reached, it is RECOMMENDED: That the requests for repayment of funds paid to the State Treasury as intangible personal property taxes for all years in question be denied. DONE AND ENTERED this 23rd day of March, 1998, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of March, 1998. COPIES FURNISHED: Elizabeth Bradshaw, Esquire Jarrell L. Murchison, Esquire Office of Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 Paul R. Vidas, CPA Director Zelenkofske, Axelrod and Company, Inc. 101 West Avenue, Suite 300 Jenkintown, Pennsylvania 19046 Tom Roche Specialty Products and Insulation Company A C & S, Inc. Post Office Box 1548 Lancaster, Pennsylvania 17608 Tom Roche IREX Corporation Post Office Box 1548 Lancaster, Pennsylvania 17608 Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Petitioner is engaged in the cattle business and sells its cattle to buyers from Florida and from outside Florida. All cattle are sold f.o.b. Clewiston and transportation to destination is paid for by the purchaser. It is the treatment of the sales as instate sales of cattle sold and transported to other states by contract carrier that is the issue in these proceedings. Respondent contends that these sales are instate sales but Petitioner contends that these sales are out-of-state sales for the purpose of computing the income derived from Florida operations pursuant to the provisions of Sections 214.71, 214.72 aud 214.73, Florida Statutes. Had the cattle been picked up by a common carrier for shipment outside Florida, Respondent could have held the sale to be an out-of-state sale for the purpose of computing the Petitioner's income tax. Because the cattle were picked up by contract carrier, Respondent determined the sale to be instate and directed its auditors to so conclude on all audits. This directive was determined to be a rule in case No. 78-1891R and invalid because not promulgated pursuant to the requirements of Chapter 210, Florida Statutes.
The Issue This issue is whether proposed amendments to Rules 12A-1.094(1) and 12A-1.094(4), Florida Administrative Code, constitute a valid exercise of delegated legislative authority.
Findings Of Fact Petitioners Florida Home Builders Association, Inc. (FHBA), and Florida A.G.C. Council (FAGC) are trade associations. A substantial number of their members contract with governmental entities for construction services and related sales of tangible personal property. FHBA and FAGC were organized, in part, to represent their members on matters relating to the construction industry, including proceedings involving agency rules. Petitioner Wackenhut Corrections Corporation (Wackenhut) frequently contracts with governmental entities. The proposed rule amendments will result in greater tax liability for Wackenhut in its performance of governmental contracts. Intervenor Florida School Board Association, Inc. (FSBA) represents all 67 local school boards in the State of Florida. FSBA's purpose is to represent its members before governmental agencies, in part to ensure cost containment in the construction, maintenance, and improvement of school facilities. Petitioners and Intervenor will be substantially affected if Respondent adopts the proposed rule amendments. They all have standing in this case. Section 212.05, Florida Statutes, imposes a tax on "retail sales" or "sales at retail." The statute also imposes a companion "use tax" when a retail sale does not occur in this state but the items sold are used here. Section 212.02(14), Florida Statutes, defines "retail sale" or "sale at retail" as a "sale to a consumer or to any person for any purpose other than resale in the form of tangible personal property." Section 212.02(20), Florida Statutes, defines "use" as the "exercise of any right or power over tangible personal property incident to ownership thereof, or interest therein, except it does not include the sale at retail of that property in the regular course of business." Therefore, when tangible personal property is purchased and resold while still tangible personal property, the individual or company that resells the property is a dealer and has an obligation to collect, but not to pay, sales tax. See Sections 212.06(2) and 212.07(1)(a), Florida Statutes. The obligation to pay the tax rests on the final purchaser of the items while they are still tangible personal property. Section 212.08(6), Florida Statutes, creates a sales tax exemption for direct sales to governmental entities. The statute also creates an exception to that exemption for sales to contractors who purchase or manufacture items for the purpose of installing them in a governmental project. At one time, governmental contractors benefited from the same sales tax exemption that governmental entities enjoyed, even when the contractor was the ultimate consumer. Section 212.08(7), Florida Statutes (1957), stated as follows in relevant part: (7) EXEMPTIONS; POLITICAL SUBDIVISIONS, INTERSTATE TRANSPORTATION, COMMUNICATIONS, ETC.--There shall also be exempt from the tax imposed by this chapter sales made to the United States government, the state or any county, municipality or political subdivision of this state, including sales of tangible personal property made to contractors employed by any such government or political subdivision thereof where such tangible personal property goes into and becomes a part of public works owned by such government or political subdivision thereof. (Emphasis added) Chapter 59-402, Section 2, Laws of Florida, amended this provision by deleting the word "including" and substituting "provided, this exemption shall not include." Section 212.08(6), Florida Statutes (1991), provided as follows in relevant part: (6) EXEMPTIONS; POLITICAL SUBDIVISIONS.-- There are also exempt from the tax imposed by this chapter sales made to the United States Government, a state, or any county, municipality, or political subdivision of a state when payment is made directly to the dealer by the governmental entity. This exemption shall not inure to any transaction otherwise taxable under this chapter when payment is made by a government employee by any means, including, but not limited to, cash, check, or credit card when that employee is subsequently reimbursed by the governmental entity. This exemption does not include sales of tangible personal property made to contractors employed either directly or as agents of any such government or political subdivision thereof when such tangible personal property goes into or becomes a part of public works owned by such government or political subdivision thereof, except public works in progress or for which bonds or revenue certificates have been validated on or before August 1, 1959. Rule 12A-1.094, Florida Administrative Code, which implements Section 212.08(6), Florida Statutes, was last amended on August 10, 1992. The existing rule currently provides, as follows, in relevant part: 12A-1.094 Public Works Contracts. This rule shall govern the taxability of transactions in which contractors manufacture or purchase supplies and materials for use in public works, as that term is referred to in Section 212.08(6), This rule shall not apply to non- public works contracts as those contracts are governed under the provisions of Rule 12A-1.051, F.A.C. . . . In applying this rule, the following definitions are used. "Contractor" is one who is engaged in the repair, alteration, improvement or construction of real property. Contractors include, but are not limited to, persons engaged in building, electrical, plumbing, heating, painting, decorating, ventilating, paperhanging, sheet metal, roofing, bridge, road, waterworks, landscape, pier or billboard work. This definition includes subcontractors. "Public works" are defined as construction projects for public use or enjoyment, financed and owned by the government, in which private persons undertake the obligation to do a specific piece of work. The term "public works" is not restricted to the repair, alteration, improvement, or construction of real property and fixed works where the sale of tangible personal property is made to or by contractors involved in public works contracts. Such contracts shall include, but not be limited to, building, electrical, plumbing, heating, painting, decorating, ventilating, paperhanging, sheet metal, roofing, bridge, road, waterworks, landscape, pier or billboard contracts. "Real property" within the meaning of this rule includes all fixtures and improvements to real property. The status of a project as an improvement or affixture to real property is determined by the objective and presumed intent of the parties, based on the nature and use of the project and the degree of affixation to realty. Mobile homes and other mobile buildings are deemed fixtures if they (1) bear RP license tags, or (2) have the mobile features (such as wheels and/or axles) removed, and are placed on blocks or footings and permanently secured with anchors, tie-down straps or similar devices. * * * (4) The exemption in subsection (3)(a) is a general exemption for sales made to the government. The exception in subsection (2)(a) is a specific exception for sales to contractors. A determination of whether a particular transaction is properly characterized as an exempt sale to a government entity or a taxable sale to a contractor shall be based on the substance of the transaction, rather than the form in which the transaction is cast. The Executive Director or the Executive Director's designee in the responsible program will determine whether the substance of a particular transaction is governed by subsection (2)(a) or is a sale to a governmental body as provided by subsection (3) of this rule based on all of the facts and circumstances surrounding the transaction as a whole. The Executive Director or the Executive Director's designee in the responsible program will give special consideration to factors which govern the status of the tangible personal property prior to its affixation to real property. Such factors include provisions which govern bidding, indemnification, inspection, acceptance, delivery, payment, storage, and assumption of the risk of damage or loss for the tangible personal property prior to its affixation to real property. Assumption of the risk of damage or loss is a paramount consideration. A party may be deemed to have assumed the risk of loss if the party either: bears the economic burden of posting a bond or obtaining insurance covering damage or loss; or enjoys the economic benefit of the proceeds of such bond or insurance. Other factors that may be considered by the Executive Director or the Executive Director's designee in the responsible program include whether: the contractor is authorized to make purchases in its own name; the contractor is jointly or severally liable to the vendor for payment: purchases are not subject to prior approval by the government; vendors are not informed that the government is the only party with an independent interest in the purchase; and whether the contractors are formally denominated as purchasing agents for the government. Sales made pursuant to so called "cost-plus", "fixed-fee", "lump sum", and "guaranteed price" contracts are taxable sales to the contractor unless it can be demonstrated to the satisfaction of the Executive Director or the Executive Director's designee in the responsible program that such sales are, in substance, tax exempt sales to the government. Section 212.08(6), Florida Statutes, was last amended by Chapter 98-144, Laws of Florida. The statute currently states, as follows, in pertinent part: (6) EXEMPTIONS; POLITICAL SUBDIVISIONS.-- There are also exempt from the tax imposed by this chapter sales made to the United States Government, a state, or any county, municipality, or political subdivision of a state when payment is made directly to the dealer by the governmental entity. This exemption shall not inure to any transaction otherwise taxable under this chapter when payment is made by a government employee by any means, including, but not limited to, cash, check, or credit card when that employee is subsequently reimbursed by the governmental entity. This exemption does not include sales of tangible personal property made to contractors employed either directly or as agents of any such government or political subdivision thereof when such tangible personal property goes into or becomes a part of public works owned by such government or political subdivision. A determination whether a particular transaction is properly characterized as an exempt sale to a government entity or a taxable sale to a contractor shall be based on the substance of the transaction rather than the form in which the transaction is cast. The department shall adopt rules that give special consideration to factors that govern the status of the tangible personal property before its affixation to real property. In developing these rules, assumption of the risk of damage or loss is of paramount consideration in the determination. Chapter 98-144, Laws of Florida, was the result of Respondent's "map-tracking" exercise to ensure that its rules were supported by appropriate legislation. Proposed amendments to Rules 12A-1.094(1) and 12A-1.094(4), Florida Administrative Code, are at issue here. Those rules, as revised by the proposed amendments, read as follows: This rule shall govern the taxability of transactions in which contractors manufacture or purchase supplies and material for use in public works contracts, as that term is referred to in Section 212.08(6), F.S. This rule shall not apply to non-public works contracts for the repair, alteration, improvement, or construction of real property, as those contracts are governed under the provisions of Rule 12A-1,051, F.A.C. In applying this rule, the following definitions are used. 1. "Contractor" is one that supplies and installs tangible personal property that is incorporated into or becomes a part of a public facility pursuant to a public works contract with a governmental entity exercising its authority in regard to the public property or facility. Contractors include, but are not limited to, persons engaged in building, electrical, plumbing, heating, painting, decorating, ventilating, paperhanging, sheet metal, roofing, bridge, road, waterworks, landscape, pier, or billboard work. This definition includes subcontractors. "Contractor" does not include a person that furnishes tangible personal property that is not affixed or appended in such a manner that it is incorporated into or becomes a part of the public property or public facility to which a public works contract relates. A person that provides and installs tangible personal property that is freestanding and can be relocated with no tools, equipment, or need for adaptation for use elsewhere is not a contractor within the scope of this rule. "Contractor" does not include a person that provides tangible personal property that will be incorporated into or becomes part of a public facility if such property will be installed by another party. Examples. A vendor sells a desk, sofas, chairs, tables, lamps, and art prints for the reception area in a new public building. The sales agreement requires the vendor to place the furniture according to a floor plan, set up the lamps, and hang the art prints. The vendor is not a contractor within the scope of this rule, because the vendor is not installing the property being sold in such a way that it is attached or affixed to the facility. A security system vendor furnishes and install low voltage wiring behind walls, motion detectors, smoke alarms, other sensors, control pads, alarm sirens, and other components of a security system for a new county courthouse. The components are direct wired, fit into recesses cut into the walls or other structural elements of the building, and are held in place by screws. The vendor is a contractor within the scope of this rule. The security system is installed and affixed in such a manner that it ha been incorporated into the courthouse. A vendor enters an agreement to provide and install the shelving system for a new public library. The shelves are built to bear the weight of books. The shelf configuration in each unit maximizes the number of books the shelves can hold. The number and size of the units ordered is based on the design for the library space. The units will run floor to ceiling and will be anchored in place by bolts or screws. The vendor is a contractor within the scope of this rule. The shelving system will be affixed in such a manner that it becomes a part of the public library. e. A manufacturer agrees to provide the prestressed concrete forms for a public parking garage. A construction company is awarded the bid to install those forms and build the garage. The manufacturer is not a contractor within the scope of this rule, because the manufacturer will not install any tangible personal property that becomes part of the garage. The construction company is a contractor within the scope of this rule. "Governmental entity" includes any agency or branch of the United States government, a state, or any county, municipality, or political subdivision of a state. The term includes authorities created by statute to operate public facilities using public funds, such as public port authorities or public-use airport authorities. "Public works" are defined as construction projects for public use or enjoyment, financed and owned by the government, in which private persons undertake the obligation to do a specific piece of work that involves installing tangible personal property in such a manner that it becomes a part of a public facility. For purposes of this rule, a public facility includes any land, improvement to land, building, structure, or other fixed site and related infrastructure thereon owned or operated by a governmental entity where governmental or public activities are conducted. The term "public works" is not restricted to the repair, alteration, improvement, or construction of real property and fixed works, although such projects are included within the term. "Real property" within the meaning of this rule includes all fixtures and improvements to real property. The status of a project as an improvement or fixture to real property will be determined by reference to the definitions contained in Rule 12A-1.051(2), F.A.C. * * * (4)(a) The exemption in s. 212.08(6), F.S., is a general exemption for sales made directly to the government. A determination whether a particular transaction is properly characterized as an exempt sale to a governmental entity or a taxable sale to or use by a contractor shall be based on the substance of the transaction, rather than the form in which the transaction is cast. The Executive Director or the Executive Director's designee in the responsible program will determine whether the substance of a particular transaction is a taxable sale to or use by a contractor or an exempt direct sale to a governmental entity based on all of the facts and circumstances surrounding the transaction as a whole. The following criteria that govern the status of the tangible personal property prior to its affixation to real property will be considered in determining whether a governmental entity rather than a contractor is the purchaser of materials: Direct Purchase Order. The governmental entity must issue its purchase order directly to the vendor supplying the materials the contractor will use and provide the vendor with a copy of the governmental entity's Florida Consumer's Certification of Exemption. Direct Invoice. The vendor's invoice must be issued to the governmental entity, rather than to the contractor. Passage of Title. The governmental entity must take title to the tangible personal property from the vendor at the time of purchase or delivery by the vendor. 5. Assumption of the Risk of Loss. Assumption of the risk of damage or loss by the governmental entity at the time of purchase is a paramount consideration. A governmental entity will be deemed to have assumed the risk of loss if the governmental entity bears the economic burden of obtaining insurance covering damage or loss or directly enjoys the economic benefit of the proceeds of such insurance. Sales are taxable sales to the contractor unless it can be demonstrated to the satisfaction of the Executive Director or the Executive Director's designee in the responsible division that such sales are, in substance, tax-exempt direct sales to the government. Respondent's staff assisted various industry groups in drafting proposed legislation for the 2001 and 2002 legislative sessions that would expand the sales tax exemption for public works contracts. The Legislature did not enact any of these proposals. The proposed rule amendments reflect Respondent's current practice regarding tax exemptions for public works contracts. The proposed amendments detail all factors, criteria, and standards that Respondent considers in determining whether transactions qualify for the exemption set forth in Section 212.08(6), Florida Statutes. The existing version of Rule 12A-1.094, Florida Administrative Code, as revised in 1992, does not reflect these factors. In drafting the proposed revisions to Rule 12A-1.094, Florida Administrative Code, Respondent's staff considered statutory language, questions asked by taxpayers, and cases involving protests of audit assessments. Respondent's staff also considered areas that it believed failed to provide clear guidance as to how taxpayers could structure transactions to avoid the tax. Finally, Respondent's staff considered the decisions in Housing by Vogue, Inc. v. Department of Revenue, 403 So. 2d 478 (Fla. 1st DCA 1981), and Housing by Vogue, Inc. v. Department of Revenue, 422 So. 2d 3 (Fla. 1982). As a general rule, a for-profit corporation instead of the contractor is liable to pay sales tax when the contractor agrees to purchase items and to resell the items to the corporation such that the corporation takes possession and ownership thereof. This would be true regardless of whether the contractor or some other individual eventually installs the items on the for-profit corporation's property or in its facility. In either instance, the contractor, as a reseller of tangible personal property, is a dealer who has the obligation to collect the sales tax from the for-profit corporation. The for-profit corporation would be the ultimate consumer of the items. If a contractor resells items to a non-governmental customer, who enjoys tax-exempt status, while the items are still tangible personal property, no sales tax is due. In such a case, it makes no difference whether the contractor or some other individual later installs the items. The taxability of sales to or by contractors who repair, alter, improve and construct real property pursuant to non-public works contracts is governed by Rule 12A-1.051, Florida Administrative Code, which states as follows in relevant part: Scope of the rule. This rule governs the taxability of the purchase, sale, or use of tangible personal property by contractors and subcontractors who purchase, acquire, or manufacture materials and supplies for use in the performance of real property contracts other than public works contracts performed for governmental entities, which are governed by the provisions of Rule 12A-1.094, F.A.C. . . . Definitions. For purposes of this rule, the following terms have the following meanings: * * * (c)1. "Fixture" means an item that is an accessory to a building, other structure, or to land, that retains its separate identity upon installation, but that is permanently attached to the realty. Fixtures include such items as wired lighting, kitchen or bathroom sinks, furnaces, central air conditioning units, elevators or escalators, or built-in cabinets, counters, or lockers. 2. In order for an item to be considered a fixture, it is not necessary that the owner of the item also own the real property to which the item is attached. . . . * * * (g) "Real property" means land, improvements to land, and fixtures. It is synonymous with the terms "realty" and "real estate." Pursuant to the statute and the proposed rule amendments, contractors who purchase tangible personal property that goes into or becomes a part of a public works are not entitled to an exemption from paying sales tax. Such a contractor would be the ultimate consumer of the tangible personal property and not a dealer. The statute and the rule at issue here require Respondent to look at the substance instead of the form of each transaction to determine when sales tax is due. To say that no tax is due anytime a contractor agrees to purchase and resell items to a governmental customer, such that the governmental customer takes possession and ownership thereof before the same contractor installs the items, would be contrary to the statute. To find otherwise would place form over substance, allowing the contractor and the governmental entity to avoid the statutorily imposed tax by casting the transaction as a resale. The proposed rule amendments do not expand the sales and/or use tax imposed by Chapter 212, Florida Statutes. Instead, they implement the statutory provision requiring governmental contractors to pay sales tax when they supply and install items in a governmental project pursuant to a public works contract. Depending on the circumstances, "public works" include a construction project on a job site where the governmental entity owns the real property. It also includes a construction project on a job site where the governmental entity owns a public facility located on real property owned by a private individual. The term "public works" includes a public facility which is owned and operated by a governmental entity for the purpose of conducting governmental activities regardless of who owns the real property on which it is located. According to the statute, Respondent's rules must give special consideration to the status of tangible personal property "before its affixation to real property." This provision does not mean that a transaction is not taxable unless the tangible personal property becomes a "fixture" or "appurtenance" to real property. Instead, Respondent's proposed rule amendments properly implement the broader legislative intent to tax any sale to a contractor who supplies and installs tangible personal property in public works. Respondent looks first to see whether the tangible personal property will be a fixture or improvement to real property. Next, Respondent must determine whether the tangible personal property will be permanently attached and function as a part of a public works project that does not fit the definition of real property. For example, a port authority may operate an office out of a permanently docked ship. The statute directs Respondent to consider the assumption of risk of damage or loss to be most important but not the only factor in determining whether the sale of tangible personal property is taxable. In addition to the assumption of risk of loss, the proposed rule amendments require a nontaxable sale to show the following: (a) a direct purchase order to the vendor who will supply materials to the contractor; (b) a direct invoice from the vendor rather than the contractor; (c) direct payment to the vendor; and (d) passage of title at time of purchase or delivery. The five factors are inclusive of the elements that Respondent will consider when determining whether of a sale is, in substance, a direct nontaxable sale to a governmental entity.
Findings Of Fact In Exhibit 3 Petitioner disputes the overpayment of sales tax, penalties and interest in the amount of $62,035.63. At the hearing it was stipulated that the disputed sum is $62,000.00. Petitioner is owner and publisher of a weekly paper, The Tampa/Metro Neighbor (Neighbor), published in Tampa and distributed in the Tampa metropolitan area of Hillsborough County. The Neighbor is distributed to readers free of charge. Petitioner started rack sales September 27, 1980, and has sold approximately 125 per week since that time. Its total circulation is approximately 164,000. The Neighbor has not been entered or qualified to be admitted and entered as second class mail matter at a post office in the county where it is published. The Neighbor is delivered by approximately one thousand carriers to residences and apartments in Hillsborough County each Thursday. The papers are placed in plastic bags to protect them from the weather. Petitioner claims sales tax exemption for the purchase of newsprint, ink, and plastic bags used to print and distribute the Neighbor. Newspapers such as The Tampa Tribune are exempt from sales tax on these items. The Neighbor is organized into seven departments. These are: editorial, retail advertising, classified advertising, accounting, circulation, production, and printing. The editorial staff provides all items in the paper other than advertising. The editorial/advertising mix of the Neighbor is approximately 25 percent-75 percent. No 12-month breakdown of these percentages was presented. The Neighbor defines editorial content as everything except paid advertising. Only newspapers and other periodical publications are eligible for mailing at second class rates of postage. Publications primarily designed for free circulation and/or circulation at nominal rates may not qualify for the general publications category (Exhibit 24). General publication primarily designed for advertising purposes may not qualify for second class privileges. Those not qualifying include those publications which contain more than 75 percent advertising in more than half of the issues published during any 12- month period (Exhibit 24). Second class mail privilege is a very valuable asset for newspapers and other qualifying publications. The editorial content of the Neighbor, as defined in Finding of Fact 7 above, is comprised of local news, sporting news, local investigative reporting, an opinions section, and an entertainment section. The advertising is split into classifieds and other. The Neighbor contains no national or international news, no wire service reports, no comics, no stock market reports, no sports statistics, no weather reports, no nationally syndicated columnists, no state capital news, no obituaries, no book review section, and no special section such as home designs, gardening, etc. Neighbor considers its primary competition to be The Tampa Tribune. However, this competition is limited to advertising, as the Neighbor has none of the traditional newspaper functions above noted which are normally carried in daily newspapers. Petitioner presented two expert witnesses who opined that the Neighbor met the requirements to be classified as a newspaper because it was published in newspaper format; that it had an editorial section which provided some news as contrasted to that provided in a shopping guide; that the 75 percent-25 percent advertising-editorial content did not make the Neighbor primarily an advertising paper; that the requirements of the U.S. Post Office for a periodical to obtain second class mail privileges is not relevant to a determination that the Neighbor is not a newspaper; that the requirements of the Department of Revenue Rule 12A-1.08(3)(d) and 12A-1.08(4), Florida Administrative Code, are not relevant in determining whether the Neighbor is a newspaper; and that in a journalistic concept the Neighbor is a newspaper. The Neighbor was purchased in 1979 by North American Publications, Inc., a wholly owned subsidiary of Morris Communications Corporation. Morris Communications Corporation owns several newspapers scattered from Florida to Alaska, both daily and weekly publications. Most of these publications are sold to paid subscribers. Petitioner's testimony that sales tax was not collected from Petitioner's predecessor owner was flatly contradicted by the testimony of Respondent's witness. Since the latter witness is in a much better position to know the facts respecting sales taxes levied on the former owner of the Neighbor, this testimony is the more credible. In any event, Petitioner did not claim estoppel.
Findings Of Fact On October 14, 1985, Petitioner, Nicholas Cozzo, entered into a Stock Purchase Agreement for the sale of sixty (60) shares of the issued and outstanding capital stock of C & S Deli Sandwich and Fish, Inc., a Florida corporation, (the Company) to Robert A. Krueger and Joe Ellen Krueger (collectively, the Kruegers). As a result of the sale, Petitioner retained ownership of no further stock of the Company. (Exhibit A) On October 14, 1985, the Kruegers executed two (2) promissory notes in the amounts of $53,000.00 and $5,000.00, respectively, to Petitioner and a Security Agreement securing payment of the notes. (Composite Exhibit B and Exhibit C) On October 14, 1985, Petitioner tendered his resignation as Director, President and Treasurer of the Company. (Exhibit D) Petitioner's security interest to the furniture, furnishings, fixtures, equipment and inventory of the Company (the "collateral") was duly perfected by the filing of a Uniform Commercial Code Financing Statement with the Uniform Commercial Code Bureau, Florida Department of State, on October 21, 1985. (Exhibit E) A Uniform Commercial Code Financing Statement was recorded by the Petitioner in the Public Records of Pasco County, State of Florida, on October 15, 1985, in Official Records Book 1451, page 0493. (Exhibit F) In early 1987, the Kruegers defaulted under the terms of the promissory notes. Prior to April 24, 1987, Petitioner repossessed the furniture, furnishings, fixtures, equipment and inventory of the Company. No consideration was paid by Petitioner to the Company or the Kruegers upon his repossession of the foregoing described collateral. At no time did ownership of any of the capital stock of the Company revert back to Petitioner. On May 5, 1987, Petitioner by private sale disposed of the collateral to Vincent Lopez and Glen Delavega. (Exhibits G, H, and I) No surplus funds resulted from the sale of the repossessed collateral by Petitioner to Vincent Lopez and Glen Delavega. At no time material hereto did the Florida Department of Revenue issue a tax warrant against the Company respecting any unpaid sales tax. On or about May 6, 1987, Petitioner paid under protest to the Respondent Department of Revenue the delinquent unpaid sales tax of the Company in the amount of $1392.53. The Department is still attempting to verify that amount at this date. The Petitioner maintains he paid the amount in order for the Department to issue a sales tax certificate and number to Vincent Lopez and Glen Delavega. The Department maintains its procedure at the time was to issue a sales tax number to the new owners and then proceed against them under Section 212.10, Florida Statutes. It is the position of the Respondent that the Petitioner's repossession of the collateral constituted a sale within the purview of Section 212.10(1), Florida Statutes (1985), and Rule 12A-1.055, Florida Administrative Code, which places tax liability on the successor of a business whose previous owner has not satisfied outstanding sales tax obligations. Respondent further notes that the case Petitioner relies on, General Motors Acceptance Corporation v. Tom Norton Motor Corp., 366 So.2d 131 (Fla. 4th DCA 1979) was issued on January 10, 1979, while Section 679.105(5), Florida Statutes, which upholds tax laws when in conflict with security agreements, took effect January 1, 1980. Petitioner on the other hand claims that a lawful repossession of collateral under Florida's Uniform Commercial Code, Section 679.504, Florida Statutes (1985), does not constitute a "sale" of a business making him liable for the Company's unpaid sales tax. Petitioner continues to rely on GMAC, supra, and notes that it was cited by American Bank v. Con's Cycle Center, 466 So.2d 255 (Fla. 5th DCA 1985). A refund application was submitted by Petitioner to the Department of Revenue on June 10, 1987. This application was denied by the Department of Revenue by letter dated January 28, 1988. (Exhibit J)
The Issue Whether Petitioner meets the residency requirement prescribed by Section 458.347(7)(b)1.d., Florida Statutes, for certification as a physician assistant?
Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: From May, 1957, until her retirement 33 years later, Petitioner was employed as a physician by a government agency in India. Her first position was that of an Assistant Surgeon. When she retired, she was the Chief Superintendent of a 350-bed hospital. Petitioner is now, and has been since November 11, 1959, happily married to Dayaldas M. Punwani. Petitioner and her husband were married in Bombay, India. They lived together in India until March, 1981, when Dayaldas moved to the United States. Petitioner remained in India with the couple's two children. At the time of their physical separation, Petitioner and her husband enjoyed a congenial relationship, as they have throughout their marriage. Their plan was for Petitioner to eventually join Dayaldas in the United States and live with him in the same household, but only following her retirement from government service and after their children were married and settled in accordance with Indian custom and tradition. When Dayaldas arrived in the United States, he first went to Boston, Massachusetts. Sometime in late 1981 or in 1982, he settled in Broward County, Florida and has lived there since. Using a visitor's visa to enter the United States, Petitioner visited her husband on two occasions after he had settled in Florida: from May, 1983, to August, 1983, and from November, 1985, to March, 1986. During her first visit, Petitioner and Dayaldas decided that when Petitioner joined Dayaldas in the United States to once again live with him, they would make Florida their permanent home. On neither of her visits to her husband did Petitioner come with the intention of staying for an indefinite period of time. Rather, she fully intended both times to return to India to continue her employment with the government until she reached retirement age 1/ and to discharge her responsibilities to her children. On February 8, 1990, Dayaldas became a permanent resident of the United States under this country's immigration laws. By February, 1990, both of Petitioner's and Dayaldas' children were married and settled. In April, 1990, Petitioner began to dispose of household items and other personal belongings in anticipation of her retirement and her subsequent move to Florida to join her husband. On May 30, 1990, at the age of 58, Petitioner retired from government service. The retirement age for physicians in government service in India is They have the opportunity, however, to seek reappointment to their position and work two years beyond their 58th birthday. Petitioner opted not to seek reappointment and extend her employment an additional two years because she wanted to move to Florida to live with her husband. At the time of her retirement, Petitioner was living in the same government-owned apartment in Bombay that she had been living in since September, 1964. The apartment was provided to her by the Indian government as part of her compensation package. 2/ Petitioner had a maximum of eight months following her retirement to vacate the apartment. Petitioner used only approximately one half of the allotted time. She vacated the apartment in December, 1990. On December 31, 1990, Petitioner arrived in Florida and moved in with her husband, with whom she has been living since. She came only with a few clothes. She had disposed of her other possessions, including her automobile, before leaving India. During the time that Petitioner was living in India and Dayaldas was living in the United States, Petitioner had an Indian driver's license and voted in local Indian elections. In or around April, 1991, Petitioner and Dayaldas filed a joint 1990 U.S. tax return. They subsequently filed an amended return. On June 14, 1991, Petitioner became a permanent resident of the United States under this country's immigration laws. On or around June 29, 1991, Petitioner mailed to the Board her completed application for certification as a physician assistant. On her application, she "list[ed her] place of residence on July 1, 1990," as "Bombay, Maharashtra, India."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Board of Medicine enter a final order finding that Petitioner is not qualified to be certified as a physician assistant pursuant to Section 458.347(7)(b)1., Florida Statutes, because she has not shown that she was a legal resident of Florida on July 1, 1990, or was licensed or certified in any state in the United States as a physician assistant on July 1, 1990. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 17th day of June, 1992. STUART M. LERNER 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 17th day of June, 1992. 1/ During both visits, she was on leave from her government position. 2/ The Indian government provides apartments to medical staff members regardless of their citizenship or immigration status. 3/ One may establish such a new residence in Florida without being a citizen of this country. See Pawley v. Pawley, 46 So.2d 464 (Fla. 1950); Perez v. Perez, 164 So.2d 561 (Fla. 3d DCA 1964). APPENDIX TO RECOMMENDED ORDER The following are the Hearing Officer's specific rulings on the findings of fact proposed by the parties: Petitioner's Proposed Findings of Fact 1-3. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. To the extent that it suggests that Petitioner and her husband decided, during her 1983 visit, that they would both make Florida their permanent home from that moment on, rather than at some future date, this proposed finding has been rejected because it is not supported by persuasive competent substantial evidence. Otherwise, it has been accepted and incorporated in substance. Accepted and incorporated in substance. Rejected because it is more in the nature of a statement of the law than a finding of fact. 7-11. Accepted and incorporated in substance. The Board's Proposed Findings of Fact 1-4. Accepted and incorporated in substance. 5. First sentence: Rejected because it is a summary of testimony rather than a finding of fact based upon such testimony; Second and third sentences: Accepted and incorporated in substance. 6-7. Accepted and incorporated in substance. First and third sentences: Accepted and incorporated in substance; Second sentence: Rejected because it is a summary of testimony rather than a finding of fact based upon such testimony. Accepted and incorporated in substance. First and second sentences: Accepted and incorporated in substance; Third sentence: Rejected because it is a summary of testimony rather than a finding of fact based upon such testimony. COPIES FURNISHED: Julian Gonzalez, Esquire 150 Southeast 12th Street, Suite 401 Fort Lauderdale, Florida 33316 Edwin A. Bayo, Esquire Assistant Attorney General Department of Legal Affairs Suite LL04, The Capitol Tallahassee, Florida 32399-1050 Dorothy Faircloth, Executive Director Board of Medicine Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Jack McCray, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
