The Issue Whether Petitioner owes the assessment for sales and use tax as alleged by the Department of Revenue.
Findings Of Fact George Schoenrock is a resident of the State of Florida. His address is 7600 Miami View Drive, Northgate Village, Miami, Florida. Mr. Schoenrock is the owner of a company known as Action Marine. This company is located in the State of Florida and manufactures and sells new boats. In 1996 Mr. Schoenrock also formed a company in North Carolina called Action Boatworks. This company, Action Boatworks, is the Petitioner in this cause. In 1996 Petitioner purchased a boat made in Wanchese, North Carolina and named it the "Action Lady." The boat was purchased to re-sell for profit by Petitioner, a dealer in North Carolina. Action Boatworks is not registered in Florida to sell boats nor does it possess a Florida sales tax dealer's license or a tax number from the Florida Department of Revenue. At the time of purchase Mr. Schoenrock considered the "Action Lady" unfinished as it lacked canvas, fishing equipment, chair rigging, and electronic equipment for navigation. The total paid to Davis Boatworks, Inc. (the manufacturer) for the "Action Lady" was in excess of $571,000.00. The invoice for this purchase, dated May 21, 1996, did not list Petitioner as the purchaser of the vessel but identified a "Barney Schoenrock." After the purchase of the boat, Mr. Schoenrock brought the "Action Lady" to South Florida where he intended to complete the installation of the items noted above and re-sell it. The vessel entered the State of Florida by the end of May 1996, and proceeded down the coast to a dock at Mr. Schoenrock's residence. One deterrent to the re-sale of the "Action Lady" was immediately discovered by Mr. Schoenrock. That is, the diesel engines did not pass a "P.I.D." inspection required for the warranty to be effective. This inspection required Detroit Diesel to complete the P.I.D. test and to certify the engines were acceptable. The vessel eventually passed this inspection some eight or nine months after Mr. Schoenrock had received the boat. The first effort to repair the vessel in order to pass the P.I.D. test was in June of 1996 when it was taken to a repair facility known as Safety Harbor. The "Action Lady" remained at Safety Harbor until August 7, 1996, when it returned to Mr. Schoenrock's residence. Thereafter, on or about October 24, 1996, the vessel went back to Safety Harbor for additional repairs which lasted approximately two weeks. After the repairs were completed, sometime in November 1996, the boat was returned to Mr. Schoenrock's residence. In October 1996 Mr. Schoenrock listed the "Action Lady" for sale with Walsh Yachts. The asking price was noted at $695,520.00. Also at this time it was placed in the Fort Lauderdale boat show. Except for the time the boat was in repairs or on exhibition during the October boat show, the "Action Lady" remained docked at Mr. Schoenrock's residence. Eventually, Petitioner sold the vessel in South Florida to Joseph Gregory in March of 1997. According to Mr. Schoenrock the boat was not used for his own personal use. It was not used by others for personal use. It was subject to repairs, testing, and demonstration the entire time it was in Florida prior to its sale. According to Mr. Schoenrock, when he purchased the boat in North Carolina, he paid sales tax in that state totaling $2500.00. Mr. Schoenrock's company, Action Marine, was never in any way an owner of the "Action Lady." Mr. Schoenrock insured the vessel for its value and was the beneficiary of the policy. From June 1, 1996, through its resale in March 1997, the "Action Lady" did not leave the State of Florida.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a Final Order affirming the use tax assessment. DONE AND ENTERED this 5th day of May, 1999, in Tallahassee, Leon County, Florida. J. D. 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 5th day of May, 1999. COPIES FURNISHED: Eric J. Taylor, Assistant Attorney General Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 Eric Taylor, Assistant Attorney General 401 Northwest Second Avenue, N607 Miami, Florida 33128 Jack Stein, Esquire Arthur Rosenberg, Esquire Stein, Rosenberg & Winikoff Seventh Floor 4875 North Federal Highway Fort Lauderdale, Florida 33308 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 Mr. Harry A. Bayly, Jr., a real estate salesman, obtained a listing for the Sails Motel in 1975, while he was employed by respondent Donald M. Mlinarich, a real estate broker. Mr. Perz, at that time co-owner with his wife of the Sails Motel, showed Mr. Bayly a piece of paper on which he had written figures which he claimed represented gross income earned and expenses incurred on account of the Sails Motel. At the same time, Mr. Perz told Mr. Bayly that the figures on the piece of paper did not agree with federal income tax returns, or with state sales tax returns which Mr. Perz had filed. Mr. Perz told Mr. Bayly that income from the motel was understated on the tax returns, but that the figures he alleged were accurate could be substantiated by examining the motel's registration slips. The discrepancy between the gross income figure reported for tax purposes for 1974 and the gross income figure Mr. Perz gave Mr. Bayly for 1974 was twenty thousand dollars ($20,000.00). Mr. Bayly did not tell Mr. Mlinarich about the double bookkeeping at the Sails Motel. Mr. Charles George was also a real estate salesman in Mr. Mlinarich's office. Mr. George procured a purchaser for the Sails Motel, one Anton K. P. Loetschert, who signed a duly witnessed agreement to buy the motel. Before the transaction closed, however, Mr. Loetschert appeared at the Sails Motel, accompanied by an accountant, and asked to see the motel's books. Learning for the first time of the dual bookkeeping, Mr. Loetschert indicated his unwillingness to go through with the purchase. Even though the deal fell through, the broker's office obtained five thousand dollars ($5,000.00) in satisfaction of its claim for commission on the sale. Mr. Mlinarich caused half of this sum to be paid to Mr. George, in accordance with a standing agreement between Mr. Mlinarich and each of his employees. Under the same standing agreement, Mr. Bayly, because he had secured the listing, had presented Mr. Loetschert's offer, and had otherwise assisted in the transaction, was entitled to one fifth of any commission, or one thousand dollars ($1,000.00). By letter dated September 23, 1975, Mr. Bayly demanded this sum, but Mr. Mlinarich refused payment at that time, on the advice of counsel. In addition to the circumstances surrounding the Sails Motel transaction, Mr. Mlinarich related the following facts to his lawyer which were proven to be true at the hearing: On at least two occasions, Mr. Bayly added provisions to listing contracts of which he did not inform Mr. Mlinarich, so that Mr. Mlinarich was lead to believe and did believe that the property owners involved had agreed to pay a broker's fee if the property were sold within 180 days of listing, while in actuality the owners contractual obligations were subject to termination earlier, and were in fact terminated early. Mr. Bayly accomplished this by writing additional contract clauses in his own hand on the sellers' copies of the contracts, while taking care that his handwriting did not appear on the realtor's carbon copies. Mr. Mlinarich and the other salesmen in his office advertised the properties and took other steps in the mistaken belief that the property owners were legally bound for the full 180 days. Mr. Mlinarich's lawyer advised him that he had a claim against Mr. Bayly for damages in excess of one thousand dollars ($1,000.00) and told Mr. Mlinarich he need not pay Mr. Bayly his share of the commission settlement, for that reason. Shortly after Mr. Mlinarich learned that Mr. Loetschert wanted his earnest money back, he advised Mr. George Illi, an investigator for the Florida Real Estate Commission, of the details of the Sails Motel transaction. Mr. Mlinarich kept Mr. Illi posted as matters developed, through and including the time of the dispute between over payment of the one thousand dollars ($1,000.00). Altogether, Mr. Mlinarich spoke to Mr. Illi, on the telephone and in person, between five and ten times. He kept Mr. Illi fully apprised of every detail, including his lawyer's advice to pay Bayly. When the administrative complaint was filed against Mr. Mlinarich, he caused Mr. Bayly to be paid one thousand dollars ($1,000.00) in full satisfaction of Mr. Bayly's claim.
Recommendation It is strongly recommended that no disciplinary action be taken against respondent. DONE and ENTERED this 15th day of April, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Charles E. Felix, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Emerson L. Parker, Esquire 3835 Central Avenue Post Office Box 15339 St. Petersburg, Florida 33733
Findings Of Fact Petitioner is a Swiss national, who resides in Jamaica. His business in Jamaica involves water sports and vacation tours, primarily for European tourists. Petitioner attended a boat show in Fort Lauderdale, Florida, in order to locate a suitable boat for entertainment and tour purposes for use by his business in Jamaica. There, he saw The Lady, a vessel being brokered by Anchorline Yacht and Ship Brokerage, Inc., of St. Petersburg, Florida. On February 28, 1980, Petitioner purchased The Lady from Anchorline for $120,000. Prior to that date, a survey was conducted by Wilkinson Company, marine surveyors, and repairs indicated by that survey were completed at South Pasadena Marina, Inc. At the time that Petitioner purchased The Lady from Anchorline, he advised the broker that he was taking the vessel out of the country. Accordingly, the broker required Petitioner to sign an affidavit that Petitioner had read the provisions of Section 212.05, Florida Statutes, and no tax was collected on the sale and purchase of The Lady. As The Lady was journeying from St. Petersburg across the State of Florida to West Palm Beach in order to reach Jamaica, she started taking on water. She was taken to Lantana Boatyard, where another marine survey was conducted. That survey concluded that The Lady was not seaworthy and, therefore, could not be taken to Jamaica at that time. As one of the required repairs, her engines needed to be overhauled by Cummins in Miami. Accordingly, after the repairs to be made at the Lantana Boatyard were completed, The Lady was taken to the Keystone Point Marina in North Miami, Florida, so that the work on her Cummins engines could be undertaken. During this time, Petitioner attempted to register The Lady in Jamaica; however, the Jamaican Government refused to license or register the vessel since she was not in Jamaica but was still physically located within the State of Florida. As a result of discussion between Petitioner and a Mr. Mathews at Anchorline, on September 18, 1980, the Petitioner made application for a Florida boat Certificate of Title at a tag agency. He reported the purchase price as ten dollars and, accordingly, paid forty cents tax on the transaction. Cummins started the repair work necessary on The Lady's engines while she had been docked at the Keystone Point Marina. On occasion, Petitioner has stayed overnight on The Lady for security purposes. He has had a telephone attached to the vessel for his personal use while on board. On January 7, 1981, Respondent Department of Revenue issued a Warrant for Collection of Delinquent Sales and Use Tax against the Petitioner in the total amount of $9,967.37, representing the follows: Tax $4,799.60 Penalty 4,799.60 Interest 350.17 Filing Fee 18.00 $9,967.37 On January 19, 1981, Petitioner made payment to Respondent Department of Revenue in the amount of $5,167.77, which payment was made under protest and which payment represents the amount of tax, interest, and filing fees, but does not include the amount of penalty. Pursuant to its warrant, the Department of Revenue has chained The Lady to the dock at the Keystone Point Marina. Accordingly, the work being performed by Cummins on her engines has not been completed, and no sea trial can be conducted. As stipulated by the parties, since the Petitioner purchased The Lady, she has been under repair and has never left Florida waters.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is therefore, RECOMMENDED THAT: A final order be entered denying Petitioner's claim for a refund, finding the Petitioner liable for a sales tax equal to four percent of the purchase price, together with interest and filing fees, but finding the penalty assessed against Petitioner to be erroneous and therefore invalid. DONE AND ENTERED this 8th day of October 1981 in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October 1981. COPIES FURNISHED: Michael Lechtman, Esquire 801 N.E. 167th Street, Suite 301 North Miami Beach, Florida 33162 John Browdy, III, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301
Findings Of Fact Petitioner is a corporation organized and existing under the laws of Florida with its sole place of business located at 6186 Southwest 8th Street, Miami, Florida. Petitioner operates a delicatessen and restaurant in the same building at the above location. Petitioner's restaurant prepares food to be served to paying customers who consume that food at tables provided in the restaurant for that purpose. This food is served by waiters and waitresses who prepare guest checks which separately indicate the amount of sales tax charged thereon. Petitioner's delicatessen sells unprepared food to customers who do not consume that food on the premises and for whom no eating facilities are provided. The items sold by Petitioner's delicatessen are grocery-type items. A common cash register serves the two facilities, which cash register has a separate key for the sale of delicatessen items and a separate key for the sale of restaurant items. The restaurant and delicatessen occupy the same general space and are not separated by a wall or other physical barrier. Petitioner's Exhibit 4 contains a list of those items sold on the delicatessen or grocery side of Petitioner's business. The accuracy of that list was not challenged in this proceeding and it is found as a matter of fact that those items on Petitioner's Exhibit 4 accurately reflect the items sold by Petitioner across his delicatessen counter. That list includes items such as bread, rolls, bagels, milk, beer, soda, catsup, canned goods and various meats such as salami, bologna, franks, fish and ham. Petitioner collects sales tax for those items sold in the restaurant portion of the business and does not collect sales tax on those items sold in the delicatessen portion of the business. The taxable and nontaxable items are segregated and distinguished on the cash register tapes. Petitioner has so conducted his business from its inception in 1959 through the audit period in question. Throughout that period of time Petitioner regularly maintained separate and distinct records sufficient to allocate sales between taxable restaurant sales and nontaxable delicatessen or grocery sales. Petitioner's tax returns have reflected this behavior for the above period of time. When the business first opened Mr. Leo Hoffman, the owner of Petitioner corporation, contacted the Department of Revenue by telephone and was told that the foregoing method of operation was proper. Petitioner has always filed tax returns reflecting this activity and such returns were apparently not questioned until the audit at issue here. The period of time for which Petitioner was audited in this cause was January 1, 1976, to December 31, 1978. On March 12, 1979, Respondent issued a proposed sales and use tax delinquency assessment against Petitioner in the amount of $40,018.14. This assessment was based on the total sales revenue generated by both of Petitioner's enterprises and did not allocate sales revenue between the delicatessen portion of the business and the restaurant portion of the business. On May 10, 1979, the Respondent issued a revised proposed sales tax delinquency assessment against Petitioner in the amount of $33,259.20. This revised assessment was based on the total sales revenue generated by both of Petitioner's separate enterprises and did not allocate sales revenue between the delicatessen portion of the business and the restaurant portion of the business. Petitioner did pay approximately $12,000 in sales tax for the subject audit period. That was the sales tax Petitioner believed he owed for the restaurant portion of his business. The additional assessment is apparently the sales tax (with penalty and interest) Respondent believes is owed for the delicatessen portion of Petitioner's business. The items sold on the delicatessen side of Petitioner's business represent approximately 75 percent of his gross revenue. The items sold on the restaurant, or taxable side of Petitioner's business, represents approximately 25 percent of his gross revenue. The assessment by Respondent against Petitioner was based, at least in part, upon Rule 12A-1.11(1), Florida Administrative Code. Petitioner holds a restaurant license from the State of Florida, Division of Hotels and Restaurants. Petitioner also holds a retail sales license from Dade County for its delicatessen operation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED: To the extent that the assessment for unpaid sales tax is based upon sales made by the delicatessen or grocery side of Petitioner's business, such assessment is invalid and should be withdrawn. DONE AND ENTERED this 4th day of June 1980 in Tallahassee, Florida. CHRIS H. BENTLEY Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of June 1980. COPIES FURNISHED: Mark J. Wolff, Esquire Sparber, Shevin, Rosen, Shapo & Heilbronner, P.A. First Federal Building, 30th Floor One Southeast Third Avenue Miami, Florida 33131 Linda C. Procta, Esquire Department of Legal Affairs Office of the Attorney General The Capitol, LL04 Tallahassee, Florida 32304
The Issue The issue for determination is whether Petitioner is liable for use tax, pursuant to Chapter 212, Florida Statutes, to the Florida Department of Revenue for the use and storage of a vessel.
Findings Of Fact Camden Corporation (Petitioner) is a foreign corporation, incorporated in Delaware on August 7, 1990. Petitioner is a solely owned, closed corporation. Petitioner has two officers: a President, who is the sole owner, and a Treasurer. At all times material hereto, Petitioner's President and Treasurer were residents of Jacksonville, Florida. Petitioner's business address is in Jacksonville, Florida. Petitioner's officers handled its day-to-day activities and records from Jacksonville, Florida. Prior to the Petitioner's incorporation, its President wanted to purchase a vessel to take a world wide cruise. He obtained the services of a law firm to advise him on avoiding a state's sales and use tax on the purchase of a vessel, with Florida being one of the states. A lawyer in the firm contacted the Florida Department of Revenue (Respondent) and inquired, without relating any of Petitioner's factual circumstances, as to whether the case of Department of Revenue v. Yacht Futura, 510 So.2d 1047 (Fla. 1st DCA 1987) was still good case law in Florida. Yacht Futura was a case in which the parameters of Florida's sales and use tax were interpreted regarding repairs and personal use of vessels while in Florida waters. Respondent's representative informed the firm's lawyer that Yacht Futura was still being followed by Respondent and that no exceptions existed; but Respondent's representative further cautioned that the factual circumstances must conform to Yacht Futura. The firm's lawyer prepared a memorandum advising Petitioner's President, among other things, that no liability for Florida's sales and use tax would be incurred for repairs and personal use of a vessel in Florida's waters, so long as the circumstances complied with Yacht Futura. After having received the firm's advice and advice from tax advisors, Petitioner's President created and incorporated Petitioner. On August 14, 1990, Petitioner purchased a used motor vessel in international waters for $5,618,000. The vessel was a 131' Feadship with Coast Guard documentation number 623589. Petitioner named the vessel "CAMDEN." The CAMDEN was the only assest owned by Petitioner. Petitioner did not pay any Florida sales tax at the time of CAMDEN's purchase. From August 14, 1990 through October 15, 1990, the CAMDEN was outside the State of Florida. Petitioner's President had taken the vessel on a cruise. During the time period that the vessel was on the cruise, Petitioner did not pay any sales or use tax in any jurisdiction in the United States. Also, during the time period that the vessel was on the cruise, Petitioner did not license, title, or register the CAMDEN in any jurisdiction in the United States. On October 15, 1990, relying on the law firm's advice, Petitioner imported the CAMDEN into Florida waters for major repairs, with the intention of departing after the repairs and not returning to Florida waters. Petitioner obtained the services of Huckins Yacht Corporation, a registered repair facility, in Jacksonville to perform repairs to the CAMDEN, which had a dock in Huckins Marina. However, the dock at Huckins Marina was unable to accommodate a vessel the size of the CAMDEN. The vessel was docked at Southbank Marina which could accommodate the vessel and which was the closest marina to Huckins Marina. Petitioner's President was not in the State of Florida when the CAMDEN arrived in Florida waters. He did not return to Florida until October 24, 1990. Petitioner did not have a written contract with Huckins Yacht Corporation (Huckins) to perform any repairs on the CAMDEN. However, Huckins did perform some minor repairs to the CAMDEN. Also, Huckins arranged for a major repair to the CAMDEN. It arranged for Petitioner to purchase a global position satellite electronic system as a nonwarranty repair. The electronic system was to be installed by someone who was not an employee of Huckins and who did not have a contractual agreement with Huckins for the installation. The electronic system was installed on the CAMDEN at the Southbank Marina. During the time that repairs were being made to the CAMDEN, its crew remained on board. Petitioner never received any bill from Huckins for any repairs made to the CAMDEN, including the installation of the electronic system. While the vessel was docked for repairs at the Southbank Marina, it was used for personal entertainment. On October 25, 1990, Petitioner's President and his friends had an open house type of party on the CAMDEN. On October 26, 1990, Petitioner had a luncheon cruise on the CAMDEN. On October 27, 1990, Petitioner had a dinner cruise and a birthday party for the daughter of Petitioner's President. On October 28, 1990, Petitioner took the CAMDEN from Jacksonville to St. Augustine for a pleasure trip. Leaving St. Augustine, the CAMDEN traveled to Miami, Florida and docked there on October 30, 1990, to get the vessel prepared for world travel. In Miami, the CAMDEN was docked at the Moorings Yacht Services, Inc. (Moorings), a registered repair facility. In November 1990, the Moorings began repairs to the CAMDEN, and in December 1990, the vessel departed the Moorings. In November 1990, Petitioner hired a tax consultant, who was a former employee of Respondent, for advice regarding Petitioner's liability for sales and use tax of the CAMDEN in Florida. The tax consultant advised Petitioner to register the CAMDEN as a charter for sales and use tax. Further, he advised Petitioner to late-file with Respondent an Exemption Affidavit for Boats Placed in a Registered Repair Facility, referred to as a Safe Harbor Affidavit, pursuant to Subsection 212.08(7)(t), Florida Statutes. On December 19, 1990, a Safe Harbor Affidavit was executed by both Huckins and Petitioner's President. The Safe Harbor Affidavit indicated, among other things, that Huckins was a registered repair facility in Jacksonville, Florida and that, from October 16, 1990 through October 25, 1990, the CAMDEN was under the care, custody, and control of Huckins for the purpose of installing electronics, which was the electronic system. Even though the Safe Harbor Affidavit does not provide that Huckins installed the electronic system on the CAMDEN, it does infer that Huckins had installed the electronic device. Respondent interprets "care, custody, and control" as the vessel being in the "physical" care, custody, and control of the registered repair facility. Clearly shown on the Safe Harbor Affidavit is that it is to be filed with the Respondent within 72 hours after the repair facility takes possession of the vessel. Additionally, clearly shown on the Safe Harbor Affidavit is that a copy of it is to be filed with Respondent within 72 hours after the work is completed and the vessel is released to the owner. On or about December 22, 1990, the CAMDEN departed Florida waters for a pleasure cruise to the Bahamas. In early January 1991, the vessel returned to Florida. The CAMDEN remained in Florida until mid-January 1991, when it traveled to the Caribbean. Around mid-May 1991, the vessel returned to Florida. In 1990, Petitioner was not issued a permit by any agency of the United States government to use the CAMDEN in Florida waters. In April 1991, one of Respondent's representatives discovered, during a routine examination of the records of the Miami Marina, that the CAMDEN was named as a boat docked in Florida with an out-of-state hailing port. On May 13, 1991, Respondent's representative sent a Declaration for Florida Sales and Use Tax (Declaration) to Petitioner for it to complete and return to Respondent. Instead of completing the Declaration, on December 10, 1991, Petitioner's tax consultant delivered the Safe Harbor Affidavit executed on December 19, 1990, to Respondent's representative. Additionally, Petitioner's tax consultant verbally supported the Safe Harbor Affidavit by stating that the CAMDEN was docked at Southbank Marina in Jacksonville while the repairs to the vessel were being completed by Huckins and the nonemployee. The Moorings filed a Safe Harbor Affidavit with Respondent, providing that the CAMDEN entered the facility in November 1990 and departed in December 1990. The Safe Harbor Affidavit was not submitted to Respondent within 72 hours of the CAMDEN either entering the facility for repairs or departing the facility after the repairs were completed. 1/ Respondent has a practice of accepting late-filed Safe Harbor Affidavits, with the condition that all documents supporting repairs are also to be submitted. A subsequent review of all the documents submitted would determine whether a person would be responsible for sales and use tax. On December 10, 1991, based on the Safe Harbor Affidavit and the representations by Petitioner's tax consultant, Respondent's representative closed her file regarding the sales and use tax, without assessing any sales or use tax against Petitioner. However, she forwarded neither a closing letter nor a closing agreement to Petitioner. Even though Petitioner had not received a closing letter or a closing agreement from Respondent, it believed that Respondent had terminated its inquiry of any assessment against it. In or around November 1991, another of Respondent's representative (Respondent's second representative) observed, while performing a routine marina check, the CAMDEN docked at the Palm Harbor Marina in West Palm Beach, Florida. Subsequently, he opened a new file on the CAMDEN. Petitioner was unaware that Respondent's second representative had opened a new file. Respondent's second representative performed an investigation of the vessel, including reviewing the Safe Harbor Affidavit submitted to the Respondent's other representative on December 10, 1991. His investigation led to the assessment at issue. The investigation by Respondent's second representative showed, and it is determined as a finding of fact here, that the CAMDEN was not in the physical care, custody, and control of Huckins during the repairs for the period October 16, 1990 through October 25, 1990. From October 15, 1990, when the CAMDEN entered in Florida waters for repairs, the vessel remained in Florida for more than a total of 10 days. Petitioner decided to sell the CAMDEN and listed it for $6.9 million. On February 14, 1992, Petitioner sold the CAMDEN for $5.3 million, which was $1.6 million less than it was originally listed. For 1991 and 1992, Petitioner's President treated the CAMDEN as his personal second home and took a home interest deduction for federal income tax purposes. On October 10, 1992, Respondent notified Petitioner that it was assessed, as of April 10, 1992, a tax of $337,080, representing: 6 percent of the CAMDEN's purchase price of $5,618,000; $84,270 in penalty; $168,540 in specific penalty; and $59,826.60 in interest. On October 26, 1992, Respondent issued a notice of final assessment to Petitioner which included the above assessment and the facts and reasons, including legal reasons, for the assessment. Petitioner contested the assessment. On January 14, 1994, Respondent issued a notice of reconsideration of the assessment and revised final assessment, withdrawing the $168,540 in specific penalty but sustaining the remaining assessment of $503,113.02, which represented: $337,080 tax; $84,270 penalty; and $81,763.02 interest. In its notice of reconsideration, Respondent determined, among other things, that Petitioner was issued an out-of-state registration, effective December 1, 1990, as a result of Petitioner submitting an application for sales and use tax registration, listing the major business activity as rental of tangible personal property. Additionally, Respondent determined, among other things, that Petitioner, as the corporation, maintained control and use of the CAMDEN during the period December 1990 through February 1992 when the CAMDEN was sold. No tax at issue was assessed for this period of time. Petitioner protested the revised assessment. Petitioner has not paid any Florida use tax.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order affirming the assessment of use tax against the Camden Corporation in the amount of $503,113.02, plus accrued interest. DONE AND ENTERED on this 30th day of September, 1996, in Tallahassee, Leon County, Florida. ERROL H. POWELL, 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 30th day of September, 1996.
Recommendation It is, therefore, recommended that the petition be dismissed for lack of standing on the part of the Petitioner to bring such action. DONE AND ENTERED this 7th day of May, 1979, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Trace H. Bolosky, Esquire Carroll, McPeak, Bolesky & Schryver 1169 Eighth Street South Naples, Florida 33940 George L. Varnadoe, Esquire Post Office Box 17907 Naples, Florida 33941 Joseph C. Mellichamp, III, Esquire Assistant Attorney General The Capitol, LL04 Tallahassee, 32301 John D. Moriarty, Esquire Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32301
The Issue Petitioner's liability for tax, interest, and penalty, pursuant to Chapter 212, Florida Statutes, as set forth in Notice of Assessment, dated December 9, 1975. At the hearing, it was stipulated that the sale by Petitioner to one Norady as set forth in Paragraph B of the Petition was no longer in issue, and accordingly this count was withdrawn by Petitioner. The amount of sales by Petitioner to Triumpho Electric as shown in Paragraph C of the Petition was stipulated to be in the amount of $243,724.34 instead of $248,255.26. In view of the above Stipulations, the Hearing Officer requested that a revised assessment be prepared and submitted after the hearing to reflect the amount now sought by Respondent and to indicate thereon the taxes, penalty aid interest attributable to sales to Ivan Alexander, Triumpho Electric, Grand Bahama Development Company, and Agregados de Cal, purchasers from Petitioner. The revised schedule in the total amount of $12,358.37 was submitted on April 30, 1976, received by the Hearing Officer on May 4, 1976, and is marked as Respondent's Exhibit 1. The parties stipulated at the hearing that the method of computation was correct and Petitioner has filed no objections to the counts of the revised assessment. Accordingly, it is deemed to reflect the amount due and owing if imposition of tax is valid.
Findings Of Fact During the period November 1, 1973 to February 28, 1975, Petitioner made sales of merchandise to the following: Ivan Alexander, Triumpho Electric, Grand Bahama Development Company and Agregados de Cal. the circumstances of each of these transactions are set forth below. Ivan Alexander Construction Co., Ltd. a. Petitioner made sales of electrical equipment in amount of $1,646.50 to Ivan Alexander Construction Co., Ltd. Freeport, Grand Bahamas1 on September 24, 1974. Petitioner delivered e merchandise to Lindsley-RBC, Miami, Florida. Lindsley-RBC was not licensed exporter, but acted in an agency capacity for the purchaser. Subsequent to Petitioner's delivery, Lindsley-RBC consolidated the merchandise with other purchases made by Ivan Alexander, for shipping purposes. After consolidating the merchandise, Lindsley-RBC delivered the merchandise to the shipping vessel, the Tropic Day. It was received by the purchaser in Freeport on October 11, 1974. (Stipulation, Petitioner's Composite Exhibit 7). Triumpho Electric, Inc. Petitioner made sales of electrical construction equipment n the amount of $237,634.57 to Triumpho Electric, Inc., Christiansted, St. Croix, Virgin Islands, during the period under consideration. The procedures used in purchasing, delivering and shipping the merchandise are s follows: Ivan M. Bauknight, an employee of Triumpho, placed the order or the merchandise "on behalf of Triumpho" personally at Petitioner's - place of business, by telephonic communication with a salesman employed by Petitioner, or by contacting its sales representative who took the order in person from Bauknight. In August of 1972, Triumpho had formed Caribbean Supply Company, Inc., a wholly-owned subsidiary, for purposes of purchasing merchandise, consolidating said merchandise in its own warehouse, and shipping. To further effectuate their purposes, warehouse pace was secured at Miami International Airport. Although Bauknight as in charge of Caribbean Supply Company, Inc., he was not an employee of that company. In fact, Caribbean Supply Company, Inc., had no employees during the period in question, excepting casual labor at intervals who were supervised by Mr. Bauknight. Although it was not a "licensed exporter", Caribbean possessed an export sales tax number issued by Respondent. Subsequent to the placing of orders in the above-described manner, Petitioner delivered the merchandise to Caribbean Supply Company, Inc.'s warehouse located at Miami International Airport where the merchandise was consolidated with other purchases. After delivery, and after packaging and consolidating the merchandise in Caribbean Supply Company, Inc.'s warehouse, Bauknight contacted a shipping company and requested that a "piggyback" trailer be provided on which to load the merchandise. The shipping company then placed the trailer upon Caribbean Supply Company, Inc.`s loading lock where Bauknight and laborers would load the merchandise onto the trailer, seal it, and then inform the shipping company which would take it to Dodge Island Seaport, Miami, Florida, and load it upon a ship. During the assessment period in question, all trailers were loaded at Caribbean Supply Company, Inc. Another method of transportation was shipment by air from Miami International Airport. In such cases, the merchandise was delivered by Petitioners to Caribbean's warehouse where it was packaged and taken to commercial airlines for shipment. (Testimony of Bauknight, Petitioner's Composite Exhibits 1-4). Grand Bahama Development Company, Ltd. Petitioner made sales of merchandise in the amount of $21,407.55 to Grand Bahama Development Company, Ltd., during the period in question. Procedures used in purchasing, delivering and shipping were as follow: America Devco, Inc., Miami, Florida, a wholly-owned company of Grand Bahama Development Company, Ltd., was created by the latter to represent its interests in the United States. At all times pertinent to the instant transactions, America Devco, Inc., was not a licensed exporter but was acting as Grand Bahama Development Company, Ltd's agent. It did, however, possess an export sales tax number issued by Respondent. America Devco, Inc., contacted Petitioner's sales representative by telephone and placed orders subsequently issuing a confirming purchase order to Petitioner. In about 60 percent of the transactions, Petitioner delivered the merchandise to America Devco, Inc.'s warehouse. In about 40 percent of the transactions, America Devco, Inc., went to Petitioner's business site, picked up the merchandise and took it to its warehouse. By both methods, the merchandise usually remained at America Devco, Doc's warehouse from one to three days in order to create shipping documents or to take advantage of the hundred pounds air shipping minimum. America Devco, Inc., utilized its trucks to deliver the merchandise to the airline cargo loading platform. All supplies were kept in the original containers supplied by Petitioner and America Devco, Inc., only affixed shipping label. Shipping documents were prepared by the shipping company. In one transaction, Petitioner delivered purchased merchandise to Alco Shipping Company at the dock in Port Laudania, Florida. (Testimony of Gomez, Petitioner's Composite Exhibit 5). Agregados de Cal. Petitioner made sales of merchandise in the amount of 905.90 to Agregados de Cal during the period in question. The merchandise was delivered by Petitioner to Mr. Robert de la-Puirtilla, in employee or representative of Agregados de Cal, at Petitioner's lace of business, at which time he took possession of the merchandise nd delivered it to the airport. (Stipulation, Petitioner's Composite Exhibit 6).
Recommendation That the tax assessment of $12,358.37 against Petitioner under the provisions of Section 212.05, F.S., including interest and penalties be imposed by the Department of Revenue and enforcement thereof be effected in accordance with the provisions of law. DONE and ENTERED this 12th day of July, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Patricia S. Turner Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 George A. Buchmann Penthouse B2 7000 S.W. 62 Avenue South Miami, Florida 33143 Attorney for Petitioner
Findings Of Fact Petitioner is engaged in the cattle business and sells these cattle to in-state and out-of-state buyers who purchase the cattle at Clewiston, Florida, and have them transported either by the purchaser's own equipment or by a commercial carrier to their in-state or out-of-state destination. Those sales determined to be out-of-state sales are not included in the numerator of the fraction used to compute what percentage of Petitioner's income results from Florida sales and is therefore subject to Florida income tax. In making the determination respecting out-of-state sales Respondent applies the destination test if the cattle are shipped by common carrier but treats all other carriers as agents of the buyer to whom the cattle are delivered at Clewiston, thereby making such sales in-state sales. It is this policy determination which Petitioner contends is a rule. The policy has not been promulgated in accordance with Chapter 120, Florida Statutes, and, if this interpretation constitutes a rule, it is invalid because it was never promulgated as required. In determining whether certain sales are subject to the Florida sales tax, the Legislature in Section 212.06(5)(a), Florida Statutes, excluded from tax that tangible property imported or manufactured for export and provided such tangible property shall not be considered as being manufactured for export unless the manufacturer delivers the same to a licensed exporter for exporting or to a common carrier for shipment outside the State or mails the same by United States Mail to a destination outside the State. The rationale of the sales tax provision is used by Respondent in determining whether the sales are in-state sales for the purpose of computing Florida income tax. Respondent has promulgated, to its auditors, as a policy and as an interpretation of the statute, the directive to apply the destination test in determining out-of-state sales only when the merchandise sold is shipped by common carrier to a destination out of state. It is this policy determination or interpretation of the statutes that Petitioner contends is a rule and attacks in these proceedings. In the testimony Respondent acknowledged that this policy determination is uniformly applied. It also has application both within and outside the agency. Respondent further testified that if the merchandise (here cattle) had been delivered by Petitioner to the buyer outside the State of Florida by any means of transportation Petitioner chose, it would have treated the sale as an out-of-state sale.
The Issue Whether petitioner taxpayer is liable for delinquent sales tax, penalties, and interest under Chapter 212, Florida Stat utes, as alleged by respondent Department in its notice of proposed assessment.
Findings Of Fact The Taxpayer Taxpayer is a family-operated Florida corporation which has engaged in retail sales at the Tampa Port Authority since 1975 or 1976; it is a licensed dealer registered with the Department. (Testimony of Roberts, Marylis.) Taxpayer's Sales During Audit Period From June 1, 1977, through July 31, 1980 (the audit period covered by the Department's proposed assessment), Taxpayer had gross sales in the approximate amount of $691,013.46. (Testimony of Roberts; Exhibit 2.) During that period, Taxpayer filed the required DR-15 monthly sales tax reports and paid taxes on all retail sales transactions which took place on the premises of its store located at 804 Robinson Street, (Tampa Port Authority) Tampa, Florida. (Testimony of Roberts.) During the same audit period -- in addition to sales on its store premises -- Taxpayer sold goods to merchant seamen on board foreign vessels temporarily docked at the Port of Tampa. These vessels operated in foreign commerce, entering the port from and returning to international waters outside the territorial limits of the United States. Taxpayer did not report these sales on its monthly sales tax reports; neither did it charge or collect sales tax from the on-board purchasers. (Testimony of Marylis.) Taxpayer failed to charge or collect sales tax in connection with its on-board sales because it relied on what it had been told by Department representatives. Prior to forming Taxpayer's corporation Thomas Marylis went to the local Department office to obtain a dealer's certificate. While there, he asked Manuel Alvarez, Jr., then the Department's regional audit supervisor, whether he was required to collect sales tax on ship-board sales. Alvarez replied that he didn't have to collect sales taxes on sales made to seamen when he delivered the goods to the ship. 1/ (Testimony of Marylis.) The on-board sales transactions took place in the following manner: Taxpayer (through its owner, Thomas Marylis) would board the foreign vessel and accept orders from the captain, chief mate, or chief steward. (Earlier, one of these persons would have taken orders from the rest of the crew.) If individual crewmen tried to place orders, Marylis would refer them to the captain, chief mate, or chief steward. After receiving orders from one of these three persons, Marylis would return to Taxpayer's store, fill the order, and transport the goods back to the vessel. Whoever placed the order would then examine the goods and give Marylis the money /2 collected from the crew. (Testimony of Roberts, Marylis.) The goods sold in this manner were ordinarily for the personal use of individual crew members; typical items were: shoes, underwear, working clothes, small radios, watches, suitcases, soap, paper towels, and other personal care products. (Testimony of Marylis.) Department Audit of Taxpayer In 1980, the Department audited Taxpayer's corporate books to determine if sales tax had been properly collected and paid. Taxpayer could produce no dock or warehouse receipts, bills of lading, resale certificates from other licensed dealers, or affidavits verifying that its on-board sales were made to out-of-state purchasers for transportation outside of Florida. (Testimony of Roberts, Marylis.) Due to Taxpayer's failure to supply documentation demonstrating that its ship-board sales from June 1, 1977, to July 31, 1980, were exempt from sales tax imposed by Chapter 212, Florida Statutes, the Department issued a proposed assessment on September 23, 1980. Through that assessment, the Department seeks to collect $21,201.01 in delinquent sales tax, $5,131.39 in penalties, and $3,892.18 in interest (in addition to interest at 12 percent per annum, or $6.97 per day, accruing until date of payment). (Exhibit 5.) Informal Conference with Department; Alvarez's Representations to Taxpayer In October 1980 -- after the audit -- Taxpayer (through Marylis) informally met with Manuel Alvarez, the Department's regional audit supervisor, to discuss the tax status of the shipboard sales. Specifically, they discussed the Department auditor's inability to confirm that Taxpayer delivered the items to the ships, as opposed to the buyers picking up the goods at the store. Alvarez told him: [I]f the buyers would come and just pick them up and take them. And I [Alvarez] think I told him that, if that was the case, it was taxable. But, if they just placed their orders there -- like we have had other ship supplies -- and they them- selves, or one of their employees, would take the items aboard ships, that would be an exempt sale. I did make that state ment. If we had any type of confirmation to that effect, when it comes to that. (Tr. 61.) 3/ (Testimony of Alvarez.) Alvarez then told Marylis to obtain documentation or verification that the sales were made on foreign vessels, i.e., proof that Taxpayer delivered the goods to the vessels. He assured Marylis that if he could bring such verification back, such sales "would come off the audit." (Tr. 62.)(Testimony of Alvarez.) Alvarez was an experienced Department employee: he retired in 1980, after 30 years of service. It was Alvarez's standard practice -- when dealing with sales tax exemption questions -- to reiterate the importance of documentation. He would always give the taxpayer an opportunity -- 30 days or more -- to obtain documentation that a sale was exempt from taxation. (Testimony of Alvarez.) Taxpayer's Verification In response to the opportunity provided by Alvarez, Taxpayer (through Marylis) obtained affidavits from numerous captains of foreign vessels and shipping agents. Those affidavits read, in pertinent part: I, [name inserted] , am the Captain aboard the vessel [name inserted] from [place of origin]. I am personally aware that Speros International Ship Supply Co., Inc. sells various commodities, supplies, clothing, and various sundry items to for eign ship personnel by delivering the said items to the ships docked at various termi- nals inside the Tampa Port Authority and other locations in Tampa, Florida from [date] to the present. (Testimony of Marylis; Exhibit 8.) Moreover, in an attempt to comply with the tax law and avoid similar problems in the future, Taxpayer printed receipt books to be used in all future on-board sales. The receipts reflect the type of goods sold, the date of delivery to the vessel, the foreign vessel's destination, and the total purchase price. Also included is a signature line for the individual who delivers and receives the goods. (Testimony of Marylis; Exhibit 7.)
Recommendation Based on the foregoing, it is RECOMMENDED: That Department's proposed assessment of Taxpayer for delinquent sales tax, penalties, and interest, be issued as final agency action. DONE AND RECOMMENDED this 17th day of February, 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 17th day of February, 1982.
The Issue The issues to be resolved in this proceeding concern whether the Petitioner, a Delaware Corporation with its principal place of business and domicile in Texas, has an obligation to collect and remit Florida sales taxes on sales it made to a Massachusetts-domiciled corporation, in view of the facts found below.
Findings Of Fact The Petitioner is a Delaware Corporation whose principal place of business is in Austin, Texas. The Petitioner designs, develops, and markets portable computer equipment, chiefly portable "tablet" personal computers with related "peripherals," which it sells and delivers in multiple states, including Florida. It sells these products to "re-sellers" and distributors, as well as to "end users." The Petitioner, by the Department's admission in Exhibit "A" (audit) does not maintain a physical presence in the State of Florida. It does employ one sales person for business in Florida, but maintains no warehouse or other facilities, vehicles nor other indicia of physical locations or operation in the state of Florida. The Petitioner is registered as a "dealer" with the State of Florida, Department of Revenue under the Florida Sales and Use Tax Law. The Petitioner does engage in some sales to Florida "end customers" or to re-sale purchasers in Florida. These transactions, however, are not at issue in this case. The dispute solely relates to transactions between the Petitioner and Advantec Computer System, Inc., of Marlboro, Massachusetts. The Respondent is an agency of the State of Florida charged with the regulation, control, administration, and enforcement of the sales and use tax laws of the State of Florida embodied in Chapter 212, Florida Statutes, and as implemented by Florida Administrative Code Chapter 12A-1. The Respondent conducted an audit of the books and records of the Petitioner, resulting in this proceeding, for the audit period April 1, 2003 to March 31, 2006. That audit was conducted by Xena Francis, and revealed, according to the Department's position, a purported sales tax payment deficiency on the part of the Petitioner in the above-referenced amounts. The Department, upon completion of the audit, issued a Notice of Intent to Make Audit Changes, thus advising the Petitioner of the amount of the tax penalty and interest it was assessing as a result of the audit. The transactions which the Department maintained were questionable, in terms of taxes not being paid with regard thereto, were those where the Petitioner sold computer products to entities who did not produce to the Petitioner a certificate of exemption from collection of sales tax by Florida on that transaction, and where the product was shipped by the Petitioner into Florida by common carrier. The Department essentially takes the position that, since the Petitioner has a state sales and use tax "dealer certificate," that it is responsible to prove any transactions as being exempt from the relevant taxing provisions of Chapter 212, Florida Statutes, and the above rule chapter. The Department apparently presumes as a part of this position that the fact that the product in question was shipped to ultimate users in Florida by common carrier from the Petitioner's place of business outside the state that such were Florida sales tax transactions. It thus contends that the burden is on the Petitioner to prove that they are exempt from such tax and collection. After it was advised of the audit findings and the basis for the assessment, the Petitioner provided to the Department certain exemption certificates for a number of the entities and transactions for which shipment had not been made into Florida. The Department accepted these and the assessment was adjusted downward to reflect the exempt status of those transactions, pursuant to the further information provided the Department by the Petitioner. The other disputed transactions for which no exemption certificate was provided by the Petitioner, were deemed by the auditor to be taxable. In essence, the auditor took the position, as does the Department, that every person making sales into the State of Florida is subject to sales and use tax unless specifically exempt and that it is incumbent upon the selling dealer (which it maintains is the Petitioner) to establish the exempt status of the transaction, at the time of sale, with a supporting re-sale certificate or some documentation to support the transactions, exempt status.1/ The sales which are the subject of this dispute are exclusively those between the Petitioner and Advantec Computer Systems, Inc. Advantec is a Massachusetts Incorporated and domiciled corporation. It apparently does not possess a Florida "re-sale certificate" or "dealer certificate." The Petitioner sold various computers and related products, as shown by the invoices in evidence, to Advantec. The invoices and the testimony adduced by the Petitioner established that those sales were between the Petitioner and Advantec, the Massachusetts corporation. Advantec, in turn, sold the products or some of them to Florida customers. Those customers did not pay the Petitioner for the sales, but paid Advantec. Advantec directed that delivery from the Petitioner be made not to Advantec itself, but to its Florida-end customer via common carrier from the Petitioner's out-of-state location or from its overseas supplier. In any event, delivery was made from outside Florida to the Florida Advantec customers by common carrier. The Petitioner billed no Florida customer and had no relationship with any Florida customer of Advantec. Instead it invoiced and billed Advantec for the price of the products involved on a "net 30-day" basis. Advantec would then pay the Petitioner for the amount invoiced by the Petitioner to Advantec. As to the Advantec sales at issue, there was no nexus, substantial or otherwise, between the Petitioner and Advantec's customers in Florida, except that the product was "drop shipped" from the Petitioner's relevant location out of the State of Florida to the Florida customer by common carrier, not by any vehicle owned, leased, or operated by any person or entity affiliated with the Petitioner. In fact, the deliveries in question were made by Federal Express as a drop shipment. Advantec's principal business activity is the re-sale and distribution of computers and related products. It has no presence in Florida and is not a registered dealer in Florida. When the Petitioner made the sales to Advantec Computer Systems, as shown by the invoices and testimony in evidence, it billed Advantec for the sales and did not collect sales tax. While the Petitioner has in its possession Advantec's Massachusetts-issued tax-exempt certificate, the Petitioner does not have a Florida tax-exempt certificate on-file for Advantec, because Advantec is not registered in Florida, and the sale by the Petitioner to Advantec is a Massachusetts sale with no Florida nexus. The Petitioner offered three Technical Assistance Advisements (TAA) into evidence, which it obtained from the Department in support of the fact that the transactions in question are not taxable. (See Exhibits 2, 3, 4 in evidence.) These exhibits were admitted on a limited basis over the Department's objection as being possibly material to a determination as to the weight and credibility of the Department's evidence in this case, but not as being legally binding or constituting legal precedent, which last quality is precluded by Section 213.22(1), Florida Statutes (2006). Additionally, the Petitioner offered and had admitted Petitioner's Exhibit 7, which was an e-mail received from a representative of the Department, in response to an inquiry by the Petitioner. This was admitted over hearsay objection as a party statement offered by the opposing party.2/ In that exchange between the Petitioner and the Department, the Petitioner, as shown by testimony and the exhibit, related the facts involved in the sales to Advantec. The Department's response indicated that, if indeed, the buyer and seller were both located outside the State of Florida and the goods when purchased were outside the State of Florida, then the sale is not a Florida sale, between the out-of-state buyer and the out- of-state seller (the Petitioner). If the goods were then delivered by common carrier to the out-of-state buyer's ultimate customers in Florida, from the Petitioner's out-of-state location, then the transaction between the Petitioner and the out-of-state buyer is not subject to the Florida sales tax law and, in essence, is non-jurisdictional, not as a "Florida nexus sale." In summary, the Petitioner sold the goods in question to Advantec and invoiced Advantec at its Massachusetts domicile and address on "net 30-day" term. No Florida customer, person, or entity was billed for the sales in question, nor was any payment collected from any individual or business entity located in the State of Florida. Once the sale was consummated between the Petitioner and Advantec, the Petitioner merely "dropped shipped," by common carrier, the goods purchased by Advantec to Advantec's ultimate customer located in the State of Florida.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Revenue, vacating and dismissing the assessment of the subject sales tax and interest to the Petitioner, Motion Computing, Inc. DONE AND ENTERED this 24th day of December, 2007, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 24th day of December, 2007.
