The Issue There are two issues raised in this case: Whether the transaction evidenced by the written instrument is taxable-under provisions of Sections 201.08, F.S., 201.01 and 201.08(1), F.S.; and Whether the amendment to the note and mortgage involved in this case is a promissory note taxable pursuant to Section 201.08(1), F.S.
Findings Of Fact There are two issues raised in this case: Whether the written document which evidences the transaction is taxable under the provisions of Sections 201.01 and 201.08(1), F.S.; and Whether the amendment to the note and mortgage involved in this case is a promissory mote or written obligation to pay money and taxable pursuant to Section 201.08(1), F.S. The facts are that on February 28, 1974, the Petitioners, except for Joe R. Hughes, III, and W. Comer Cherry, executed a promissory mote to Lewis State Bank for $405,000 with interest at 10 percent per annum, payable monthly, beginning March 1, 1974, with the entire amount of the principle ($405,000) due on or before February 28, 1975. Said Petitioners executed a mortgage to Lewis State Bank as security for said loan. On April 8, 1975, the due date of the principle was extended to August 28, 1975. The Lewis State Bank then assigned the note and mortgage to Thomas County Federal on July 7, 1975. On July 2 and July 7, 1975, the Petitioners including Hughes and Cherry, but not Rainey, signed the instrument in Tallahassee, Florida, upon which the tax being challenged is assessed. Rainey took the instrument which appears on its face to be an Amendment to the aforementioned Note and Mortgage dated February 28, 1974, to Thomas County Federal Savings and Loan, Thomas County, Georgia. The Amended Note and Mortgage was signed by Rainey and accepted by Thomas County Federal as assignee of said original note and mortgage in Thomas County, Georgia, on July 7, 1975. The other obligors who were jointly and severally liable had signed in Florida. See R-16-21. The purpose of the amendment to the note and mortgage was to refinance the Jefferson Towers Apartments project located in Tallahassee, Florida. See R-14. Thereafter, the money was tendered under the Amendment to Note and. Mortgage, in Georgia, by Thomas County Federal to the agent of the borrowers [Petitioners] Rainey. R-14. The Petitioners, on July 8, 1975, in Leon County, recorded the amendment to note and mortgage, the only instrument reflecting the new outstanding obligation of $412,000 and the only instrument setting forth the Petitioner's promise to pay this new obligation in O. R. Book 724, page 24, et. seq. The Petitioners affixed documentary stamp taxes in the amount of $10.50 on the amendment to the note and mortgage. (See R-21) Whether the instrument entered into between the Petitioners and Thomas County Federal is considered a new obligation or an amendment of the assigned note and mortgage, the essential factors are that the execution and delivery of the instrument, and exchange of the funds therefor occurred in Georgia. Based on the foregoing facts, the Department of Revenue finds as a matter of law that: To be taxed there must be a Florida transaction evidenced by a promissory note or written obligation to pay money. Sec. 201.08(1), F.S. The Amendment to Note and Mortgage involved in this case was made, signed and executed, in the State of Florida, save one signature of the multiple obligors, who were jointly and severally liable and the loan was used in Florida to refinance a Florida project which had been originally financed in Florida. The Amendment to Note and Mortgage, the only instrument reflecting the outstanding obligation of $412,000 and evidencing the Petitioners' promise to pay this new obligation, was recorded in Leon County, Florida, and has all essential factors of a Florida transaction percent thus subject to documentary stamp tax provided for in Sections 201.01 and 201.08(1), F.S. The Amendment to Note and Mortgage clearly evidences a transaction between the Petitioners and Thomas County Federal pursuant to which the Petitioners are obligated to pay suns of money to Thomas County Federal. Such a written obligation to pay money may be exempt if it meets the criteria of Sec. 201.09, F.S. The document in question does not meet the criteria of Sec. 201.09, F.S., because it did not extend or continue only the identical contractual obligations of the original promissory note but there was a substantial change in the principle amount. No documentary stamps have been affixed to the document which was recorded nor is there any notation on the document that said stamps were placed on any other document, except affixing of documentary stamps in the amount of $10.50; therefore, the document in question is subject to tax under Sec. 201.08(1), F.S., in the amount of $607.50 plus penalty at $607.50. Section 201.08(1) and Section 201.17(2), F.S. Regarding the issue of whether the document would have been taxable as an amendment to the original note and mortgage, the Department concurs with the findings of the Hearing Officer that the document does evidence a transaction in which the taxpayer would have been obligated to pay money to the lending institution. Because the principal amount was increased from $406,000 to $412,000 there was a substantial change in principal amount. Therefore, the exemption provision of Section 201.09, F.S., would not apply.
Conclusions The assessment of the Department of Revenue in the amount of $607.50 under Section 201.08(1), F.S., for delinquent documentary stamp taxes on the amendment to Note and Mortgage and the assessment for penalty under Section 201.17(2), F.S., in the amount of $607.50 are valid. CERTIFICATION I certify that the foregoing is the Final Order of the Department of Revenue adopted by the Governor and Cabinet on July 20, 1976. J. Ed Straughn, Executive Director State of Florida Department of Revenue Room 102, Carlton Building Tallahassee, Florida 32304 Dated this 21st day of July, 1976
Recommendation The Hearing Officer recommends based on the foregoing findings fact and conclusions of law, than neither the tax or penalty be assessed. Done and ordered this 10th day of May, 1976, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph C. Mellichamp, III, Esquire Assistant Attorney General Attorney for Respondent Department of Legal Affairs The Capitol Tallahassee, Florida 32304 Edgar M. Moore, Esquire Attorney for Petitioner Smith and Moore, P.A. P.O. Box 1169 Tallahassee, Florida 32302 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF REVENUE I. RAINEY, JR., et al., Mortgagors; THOMAS COUNTY FEDERAL, Thomasville, Georgia, Mortgagee, Petitioners, vs. CASE NO. 75-1899 DEPARTMENT OF REVENUE, Respondent. /
Findings Of Fact From February 5, 1976, to March 31, 1976, Rosenbaum was a registered real estate salesman in the employ of FAR, a registered corporate broker, located in Dade County, Florida. During that period of time, FAR was engaged in an enterprise whereby advanced fee listings were obtained from Florida property owners. Salesmen known as "fronters" or "qualifiers" were employed to place calls to Florida property owners whose names and phone numbers had been provided to the salesmen by FAR. The prospects were asked if they cared to list their real estate with FAR in anticipation of resale. It was explained that there would be a refundable fee to be paid by the property owner for the listing. The refund was to occur upon sale of the property. If the prospect was interested, then certain literature was mailed out to them. Other salesmen were employed as "drivers" who would make the second contact of the prospect who indicated an interest in listing his property. The driver would secure a signed listing agreement along with a check for $375.00 which constituted the refundable listing fee. There was no evidence that any of the listings obtained by FAR were ever resold. There were, however, three parcels of land in negotiation for sale when the operations of FAR were terminated in June, 1976. There was to be a division separate and apart from the "fronters" and "drivers" to do the actual selling of the property. The listings were advertised in the Fort Lauderdale area but there was no evidence to establish whether or not other advertising occurred. There was a total absence of evidence and, hence, a failure of proof as to the allegations of misrepresentations by Rosenbaum. FREC introduced no evidence to show that Rosenbaum represented that the property could be sold for several times the purchase price, that it would be advertised nationwide and in foreign countries or that the company had foreign buyers wring to purchase United States property listed with the company. There was no evidence introduced to show that Rosenbaum either made the representations or knew them to be false. There was no evidence introduced to show that Sherman knew that no bona fide effort would be made to sell the property listed. There was no evidence of any nature introduced by FREC to show that Rosenbaum was dishonest or untruthful. No evidence was introduced to establish the amended allegation that Rosenbaum was guilty of a violation of a duty imposed by law.
Findings Of Fact In accordance with Joint Exhibit 1, the parties have stipulated to the following facts: FLAME MEATS, INC. That Flame Meats, Inc., a corporation for profit was incorporated on February 28, 1973. That in May of 1973 the corporation applied for a certificate of registration from the State of Florida, Department of Revenue and was issued such a certificate under sales tax number 60-23-35552-02. That Flame Meats, Inc., did not hold title to the real property on which it conducted its business at 1141 U.S. Highway No. 1, North Palm Beach, Florida, during the audit period. That the corporation had exclusive occupancy of the premises described above on which it conducted its business during the audit period. That as to Flame Meats, Inc., the real property on which it conducted its business was owned by Peter G. Makris, Trustee, and encumbered by mortgages on which Peter G. Makris, Trustee, joined by Gloria Makris his wife, were mortgagors, both deed and mortgage recorded in OR Book 2137, Pages 1247 through 1251 in the records of the clerk of the circuit court, Palm Beach County, Florida. That Flame Meats, Inc., had not made itself liable for the payment of any encumbrances on said real property on which it conducted its business by either signing, co-signing, endorsement or guarantee during the audit. That Flame Meats, Inc., made payments on the mortgage set forth in (4) above, during the audit period, in monthly amounts of $2,109.19 for a total amount of $82,258.41. Flame Meats, Inc., paid the ad valorem real property tax on said real property as described in the deed in (4) above for the tax years 1973, 1974 and 1975 in the yearly amounts respectively of $42.24, $1,651.79 and $1,740.19 for a total amount during the audit period of $3,834.22. The Flame Meats, Inc., paid insurance premiums monthly to the Home Indemnity Company, P. O. Box 1856, Jacksonville, Florida 32216, Policy Number B0BB8307236, for a total amount of $5,622.63 during the audit period. That Flame Meats, Inc., received a sales tax assessment dated October 27, 1976. That Flame Meats, Inc., received the sales tax revised assessment dated January 10, 1977, after an informal conference held in the West Palm Beach Area Office on January 6, 1977. FLAME OF NORTH PALM BEACH, INC. That the Flame of North Palm Beach, inc., a corporation for profit was incorporated on November 4, 1968. That in November, 1968, the corporation applied for a certificate of registration from the State of Florida, Department of Revenue and was issued such a certificate under sales tax number 60-23-26281-08. That the Flame of North Palm Beach, Inc. as a corporation did not hold title to the real property on which it conducted its business at 200 Yacht Club Drive, North Palm Beach, Florida, during the audit period. The corporation had exclusive occupancy of the premises on which it conducted its business during the audit period. That as to the Flame of North Palm Beach, Inc., the real property on which it conducted its business was owned by Peter G. Makris and Gloria Makris as husband and wife recorded in OR Book 1666, Page 1520 and 1521, in the records of the clerk of the circuit court of Palm Beach County. That the Flame of North Palm Beach, Inc., as a corporation had not made itself liable for the payments of any encumbrances on said real property on which it conducted its business by either signing, co-signing or endorsement or guarantee during the audit period. That the Flame of North Palm Beach, Inc., made payments on the mortgage which encumbered the real property set forth in (14) above, during the audit period, in monthly amounts of $2,920.21 until September, 1974, then in the amount of $3,300.00 for a total of $123,382.94. That the Flame of North Palm Beach, Inc., paid the ad valorem real property tax on said real property as described in the deed in (14) above for the tax years 1973, 1974 and 1975, in the yearly amounts respectively of $6,936.80, $6,342.46, and $6,101.95 for a total amount during the audit period of $19,381.21. That the Flame of North Palm Beach, Inc. paid insurance premiums monthly to the Home Indemnity Company, P. O. Box 1685, Jacksonville, Florida 32216, Policy Number BOP8307327, for a total amount of $4,419.87 during the audit period. That the Flame of North Palm Beach, Inc., received the sales tax assessment dated October 27, 1976, represented in Composite Exhibit 6. That the Flame of North Palm Beach, inc., received the sales tax revised assessment, dated January 10, 1977, after an informal conference held in the West Palm Beach Area Office on January 6, 1977. LORD CHUMLEY'S OF JUPITER, INC. That Lord Chumley's of Jupiter, Inc. a corporation for profit was incorporated on December 12, 1972. That in March of 1973 the corporation applied for a certificate of registration from the State of Florida, Department of Revenue and was issued such a certificate under sales tax number 60-11-17282-09. That Lord Chumley's of Jupiter, Inc. did not hold title to the real property on which it conducted its business at Highway A-1-A, Ocean Drive, Jupiter, Florida, during the audit period. The corporation has exclusive occupancy of the premises described above on which it conducted its business during the audit period. That as to Lord Chumley's of Jupiter, Inc., the real property on which it conducted its business was owned by Peter G. Makris, Trustee, as recorded in OR Book 2099, Page 735 in the records of the clerk of the circuit court of Palm Beach, County, Florida. That Lord Chumley's of Jupiter, Inc., had not made itself liable for the payment of any encumbrances on said real property on which it conducted its business by either signing, co-signing, endorsement or guarantee during the audit period. That Lord Chumley's of Jupiter, Inc. made payments on the mortgage which encumbered the real property set forth in (24) above, during the audit period in monthly amounts of $3,247.24 for a total amount of $126,642.36 during the audit period. That Lord Chumley's of Jupiter, Inc. paid the ad valorem real property tax on said real property as described in the deed in (24) above for the tax years 1973, 1974 and 1975 in the yearly amounts respectively of $1,862.35, $1,756.01 and $1,731.46, for the total amount during the audit period of $5,349.82. That Lord Chumley's of Jupiter, Inc., paid insurance premiums monthly to the Home Indemnity Company, P. O. Box 1685, Jacksonville, Florida 32216, Policy Number BOP8307329, for a total amount of $17,169.75 during the audit period. That Lord Chumley's of Jupiter, Inc., received the sales tax assessment dated October 27, 1976. That Lord Chumley's of Jupiter, Inc., received the sales tax revised assessment dated January 10, 1977, after an informal conference held in the West Palm Beach Area Office on January 6, 1977. LORD CHUMLEY'S OF STUART, INC. That Lord Chumley's of Stuart, Inc., a corporation for profit, was incorporated on November 14, 1973. That in December, 1973, the corporation applied for a certificate of registration from the State of Florida, Department of Revenue and was issued such a certificate under sales tax number 53-07-034130-08. That Lord Chumley's of Stuart, Inc., did not hold title to the real property on which it conducted its business at 52 U.S. No. 1, Stuart, Florida, during the audit period. The corporation had exclusive occupancy of the premises described above on which it conducted its business during the audit period. That as to Lord Chumley's of Stuart, Inc., the real property on which it conducted its business was owned by Peter G. Makris, Trustee, recorded in OR Book 358, Pages 1283 and 1284, the records of the clerk of the circuit court of Palm Beach County, Florida. That Lord Chumley's of Stuart, Inc., had not made itself liable for the payment of any encumbrances on said real property on which it conducted its business by either signing, co-signing, endorsement or guarantee during the audit period. That Lord Chumley's of Stuart, Inc., made payments on the mortgage which encumbered the real property as set forth in (34) above during the audit period in the monthly amounts of $4,923.70 for a total amount of $132,939.90. That Lord Chumley's of Stuart, Inc., paid the ad valorem real property tax on said property as described in the deed in (34) above for the tax years 1974 and 1975 in the yearly amounts respectively of $9,680.49 and $10,519.85 for a total amount during the audit period of $20,200.34. That Lord Chumley's of Stuart, Inc., paid insurance premiums monthly to Home Indemnity Company, P. O. Box 1685, Jacksonville, Florida 32216, Policy Number BOP8307328, for a total amount of $4,274.91 during the audit period. That Lord Chumley's of Stuart, Inc. received the sales tax assessment dated October 27, 1976. That Lord Chumley's of Stuart, Inc., received the sales tax revised assessment dated January 10, 1977, after an informal conference held in the West Palm Beach Area Office on January 6, 1977. The parties have further stipulated that there were no formal trust agreements between the Makrises and any of the four corporations respecting these transactions. Flame Meats, Inc. operates a retail meat market, a butcher shop, and a liquor store. The other three corporations operate restaurants. There are no formal rental or lease agreements between the Makrises and any of the corporations. Peter G. Makris purchased the properties upon which each of the corporations do business. He purchased the properties for the sole purpose of establishing the businesses. It was never his intention to undertake the business of renting or leasing the property to the corporations. Although he took legal title to the properties, and held legal title during the entire period that is the subject of the instant audits, he did not personally enjoy any of the benefits of ownership. The corporations occupied and controlled the properties. They paid no rent to Makris. They did make payments on outstanding mortgages, which were the obligation of Peter G. Makris, and they paid real property taxes and insurance premiums. These payments did not amount to rental payments, but rather reflected the fact that Makris purchased the properties for the corporations. A further reflection of this relationship is the fact that subsequent to the instant audits, Makris conveyed each of the properties to the respective corporations through quitclaim deeds. He received no consideration for the quitclaim deeds, as he had received no consideration for permitting the corporations to do business on the properties while he held legal title. Makris, either in his personal or trustee capacity, never received any compensation or consideration of any kind for owning the properties.
The Issue Whether or not the Respondent, State of Florida, Department of Revenue, is entitled to documentary stamp tax in accordance with Section 201.02, Florida Statutes, in the amount of $1,450.50 and a penalty in the amount of $1,450.50 under Section 201.17, Florida Statutes; and documentary surtax under Section , Florida Statutes, in the amount of $531.85 and penalties thereon in the amount of $531.85, pursuant to Section 201.17, Florida Statutes; as entered by the Respondent, State of Florida, Department of Revenue, on a transaction between Petitioners and Stam-Mil, Inc., are proper.
Findings Of Fact The Petitioners were the stockholders of Gallagher's of Miami, Inc. Among the assets of Gallagher's of Miami, Inc., were the rights under a sublease undertaken between B.G.L. Corporation and Gallagher's of Miami, Inc. dated September 25, 1976 and recorded in Official Record Book 5663, at page 261 of the Public Records of Dade County, Florida. This sublease was an amendment to a sublease which was dated June 1, 1965, recorded in Official Record Book 5768, Page 176 of the Public Records of Dade County, Florida, between B.G.L. Corporation, a Florida corporation as lessor, and KSJ Corporation, a Florida corporation as lessee. One of the conditions of Gallagher's lease obligation was responsibility for the payment of a mortgage dated May 1, 1965, recorded in Official Record Book 4592, at Page 161, of the Public Records of Dade County, Florida, from KSJ Corporation, a Florida corporation to Joseph Z. Lipsky and Evalyn Lipsky, as amended by agreement dated August 30, l65 between KSJ Corporation and Joseph Z. Lipsky and Evalyn Lipsky. Pursuant to a plan of liquidation of Gallagher's of Miami, Inc. that corporation executed and delivered to Petitioners an assignment of the lessee's interest in the aforementioned lease to which Gallagher's of Miami, Inc. was a party. The assignment of lease can be found as Exhibit A to the petition filed by the Petitioners. The contents of such assignment are found to be fact. By letters of July 30, 1975 and March 10, 1975, the Respondent indicated its intention to assess tax in the amount of $326.10 upon the document representing the assignment between Gallagher's of Miami, Inc. and the Petitioners. The amount of documentary stamp tax was premised on the aforementioned mortgage which at the time of the proposed assessment was valued at $108,750. In addition the Respondent indicated its intention to impose a penalty in a like amount of $326.10. The assignment was in fact executed, pursuant to a plan of liquidation, which plan is shown as Petitioner's Exhibit C attached to the petition. The Petitioners' Exhibit C is established as fact. Petitioners in receiving the assignment in liquidation Gallagher's of Miami, Inc. received such assignment in proportion to their stock holdings in that corporation. Subsequent to the assignment of leases and agreement between Gallagher's of Miami, Inc. and the Petitioners a further assignment was made between the Petitioners and Stan-Mil, Inc. of the same property, which took place on December 16, 1974. The Petitioners executed and delivered to Stan-Mil, Inc. a Florida corporation, the assignment of lease of lessee's interest in a lease, as shown in Petitioner's Exhibit A attached to its petition challenging the assessment in the transfer of Petitioners' interest to Stan-Mil, Inc. The facts of Exhibit A are admitted. The assignment was excluded pursuant to an agreement for the sale of a restaurant (Gallagher's Restaurant) , the lease assignment being of the assets of the restaurant which was sold. A copy of the closing statement, upon the sale of the restaurant, a copy of the bill of sale of all assets sold and a copy of an appraisal report allocating the purchase price for the restaurant, among all of the assets sold is attached as Petitioner's Exhibit D to the petition challenging the assessment on the transaction between the Petitioners and Stan-Mil, Inc. The facts of Exhibit D are admitted. The Respondent, through its letter of March 8, 1976, proposes to assess documentary stamp tax under 201.02 F.S. in the amount of $1450.50 and a penalty in like amount under 201.17 P.S. In addition the letter notices a proposed assessment of documentary surtax under 201.021 F.S. in the amount of $531.85 and a penalty of $531.85 pursuant to 201.17 F.S. These amounts represent the tax on the appraised value of the lease-land and building in the amount of $83,500.00 and the leasehold improvements in the amount of $400,000.00. These lease-hold improvements are to be distinguished from such tangible items as furniture, fixtures, equipment, dishes and silverware, which were separately appraised in the valuation of the assets of the restaurant, known as Gallagher's of Miami, Inc. The Petitioners are challenging the proposed assessment of tax on the transaction between the Petitioners and Stan-Mil, Inc.
Recommendation It is recommended that the documentary stamp tax in the amount of $1450.50 and a like penalty of $1450.50, and the documentary surtax in the amount of $531.85 and a like penalty of $531.85, as assessed against the Petitioners, be upheld. DONE and ENTERED this 28th day of February, 1977, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Lewis M. Kanner, Esquire 1003 DuPont Building 169 E. Flagler Street Miami, Florida 33131 Caroline E. Mueller, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304 ================================================================= AGENCY FINAL ORDER =================================================================
Findings Of Fact Paragraph 3 of the Petitioner's petition for administrative hearing provides: "That the Petitioners accepted a conveyance of certain real property in Brevard County, Florida in lieu of foreclosure of a mortgage held by them. The Department of Revenue contends that the documentary surtax should be paid on the deeds based on the amount of the outstanding mortgage at the time of the conveyances. It has served notice of the proposed assessments against each of the Petitioners in the following amounts, to wit: Jesse Jackson Parrish, Jr., tax - $187.00, penalty - $187.00, interest - $5.61, total due to date - $379.61; Ralph Bernard Parrish, tax - $187.00, penalty - $187.00, interest - $5.61, total due to date - $379.61; J.J. Parrish & Company, Inc., tax - $374.55, penalty - $374.55, interest - $11.24, total due to date - $760.34, and Pauline Bryan, tax - $187.00, penalty - $187.00, interest - $5.61, total due to date - $760.34, and Pauline Bryan, tax - $187.00, penalty - 187.00, interest - 5.61, total due to date - $379.61. That the statutes, Florida Statutes, 201.02, does not require payment of the documentary sur tax in such a case. The condition of this statute, by the court, in Leadership Housing, Inc., a Delaware corporation vs. Department of Revenue of the State of Florida, Fla. App. 336 So 2d 1239, holds that the statute should be strictly construed in favor of the tax payer and against the Government." In its answer the Respondent admitted the allegations contained in the first three sentences of the above quoted paragraph. In response to the last sentence of Paragraph 3 of the petition, the Respondent answered as follows: "Respondent denies the following allegations contained in the fourth sentence of paragraph three, if Petitioners are refering to section 201.021 Florida Statutes, and asserts that the conveyance which is the subject of this cause is subject to the imposition of documentary surtax stamps pursuant to section 201.021, Florida Statutes. Respondent, with respect to the allegations contained in the last sentence of Paragraph 3, admits to the existence of the decision in the Leadership Housing Inc., a Delaware corporation v. Department of Revenue of the State of Florida case, but asserts that such decision is not applicable in the instant cause." Since the allegations of the first three sentences of Paragraph 3 of the petition have been admitted by the Respondent, the allegations will be accepted as facts, and are intended to be construed as findings of fact herein. In Paragraph 2 of their petition, the Petitioners alleged: "There are no issues of material fact." In its answer the Respondent did not admit this allegation, but rather asserted that it was without knowledge with respect to it. The position taken by the Respondent at the final hearing clearly indicates that the Respondent is in agreement that there are no issues of fact to be determined in this case. On or about December 23, 1975, Alexander H. Clattenberg, Jr. and John Lowndes, Trustees, executed warranty deeds granting to Jesse Jackson Parrish, Jr., Ralph Bernard Parrish, and Pauline Parrish Bryan three separate parcels of land located in Brevard County, Florida. These warranty deeds were received in evidence respectively as Respondent's Exhibits 4, 2, and 3. On or about July 8, 1976, Alexander H. Clattenberg, Jr. and John F. Lowndes, Trustees, executed a warranty deed granting to J. J. Parrish & Company, Inc., certain real property located in Brevard County, Florida. A copy of this deed was received in evidence as Respondent's Exhibit 1. On or about December 29, 1976, the Respondent issued notices of proposed assessment against Jesse Jackson Parish, Jr., Ralph Bernard Parrish, and J. J. Parrish & Company, Inc. based upon Respondent's Exhibits 4, 2, and 1. Copies of these notices of proposed assessment were received in evidence as Respondent's Exhibit 5. A copy of a proposed assessment against Pauline Parrish Bryan was neither offered into evidence nor received. It is alleged in the Petitioners' petition, and admitted in the Respondent's answer, however, that a notice of proposed assessment was served upon Pauline Bryan. Except insofar as the pleadings contain undisputed allegations respecting the consideration for the warranty deeds that were received in evidence as Respondent's Exhibits 1 through 4, there was no evidence presented at the final hearing from which any findings can be made respecting the consideration for the deeds.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED: That the Respondent assess documentary surtaxes, interest, and penalties against the Petitioners in the amounts set out in Paragraph 3 of the Petitioners' petition for administrative hearing. RECOMMENDED this 31st day of May, 1977, in Tallahassee, Florida. STEVEN PFEIFFER Assistant Director Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Mr. Harry L. Coe Executive Director Department of Revenue Room 102, Carlton Building Tallahassee, Florida 32304 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 Joe D. Matheny, Esquire Henderson, Matheny & Jones P. O. Box 6536 Titusville, Florida 32780
Findings Of Fact From December 29, 1975, to January 15, 1976, and from February 5, 1976, to September 30, 1976, Leichus was a registered real estate salesperson in the employ of FAR, a registered corporate broker, located in Dade County, Florida. During those periods of time, FAR was engaged in an enterprise whereby advanced fee listings were obtained from Florida property owners. Salesmen known as "fronters or qualifiers" were employed to place calls to Florida property owners whose names and phone numbers had been provided to the salesmen by FAR. The prospects were asked if they cared to list their real estate with FAR in anticipation of resale. It was explained that there would be a refundable fee to be paid by the property owner for the listing. The refund was to occur upon sale of the property. If the prospect was interested, then certain literature was mailed out to them. Other salesmen were employed as "drivers" who would make the second contact of the prospect who indicated an interest in listing his property. The driver would secure a signed listing agreement along with a check for $375.00 which constituted the refundable listing fee. There was no evidence that any of the listings obtained by FAR were ever resold. There were, however, three parcels of land in negotiation for sale when the operations of FAR were terminated in June, 1976. There was to be a division separate and apart from the "fronters" and "drivers" to do the actual selling of the property. The listings were advertised in the Fort Lauderdale area but there was no evidence to establish whether or not other advertising occurred. There was a total absence of evidence and, hence, a failure of proof as to the allegations of misrepresentations by Leichus. FREC introduced no evidence to show that Leichus represented that the property could be sold for several times the purchase price, that it would be advertised nationwide and in foreign countries or that the company had foreign buyers wanting to purchase United States property listed with the company. There was no evidence introduced to show that Leichus either made the representations or knew them to be false. There is no evidence introduced to show that Leichus knew that no bona fide effort would be made to sell the property listed. There was no evidence of any nature introduced by FREC to show that Leichus was dishonest or untruthful. No evidence was introduced to establish the amended allegation that Leichus was guilty of a violation of a duty imposed by law.
Findings Of Fact The parties stipulated to the facts-of the case as follows: On March 2, 1972, the petitioners, Fred W. Baggett and John S. Miller, Jr., along with one Michael W. Duggar, incorporated a Florida corporation known as Tallahassee Properties , Inc. and filed Articles of Incorporation with the Secretary of State, State of Florida. On June 29, 1972, the above described corporation took title to the property described as follows: All that part of Lot Number 176 in the Original Plan of the City of Tallahassee, in the County of Leon, State of Florida, described as follows: to-wit: Begin at the Northwest corner of said lot and run thence East along the South line of College Avenue (formerly Clinton Street) 39 feet to the wall of a brick building, thence run South along the side of said building 60 feet, thence run West 39 feet to the East line of Adams Street, thence run North along the East line of Adams Street 60 feet to the Northwest corner of said Lot 176, being the point of beginning; from LeRoy Collins and Mary Call Collins, said deed being recorded in Official Records Book 532, Page 327 of the Public Records of Leon County, Florida. On that same date, Tallahassee Properties, Inc. executed a note and mortgage in the amount of $55,000 to Leon Federal Savings and Loan Association, said mortgage being recorded in Official Records Book 532, Page 328 of the Public Records of Leon County, Florida. The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Michael W. Duggar. On June 29, 1972, Tallahassee Properties, Inc. executed a note in the original principal amount of $72,405.84 to LeRoy Collins and Mary Call Collins secured by a second mortgage on the property and as recorded in Official Records Book 532, Page 376 of the Public Records of Leon County, Florida, The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Michael W. Duggar. On September 8, 1972, an agreement was entered into between Michael W. Duggar and Ronald C. LaFace of Tallahassee, Florida, wherein the said Michael W. - Duggar conveyed his interest in Tallahassee Properties, Inc. to Ronald C. LaFace and the said Ronald C. LaFace agreed therein to hold Michael W. Duggar harmless and relieve him of liability and indemnifying him for any liabilities which Michael W. Duggar may or could have as a result of his interest in Tallahassee Properties, Inc. This is the reason that the said Ronald C. LaFace is the proper party petitioner in this action. On April 18, 1973, Tallahassee Properties, Inc. executed an additional note to Leon Federal Savings and Loan Association in the amount of $17,500 which said note was also secured by that certain mortgage dated June 29, 1972 and recorded June 29, 1972 in Official Records Book 532, Page 328 of the Public Records of Leon County, Florida. The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Ronald C. LaFace. On April 23, 1973 by an instrument recorded in Official Records Book 584, Page 94 of the Public Records of Leon County, Florida, Tallahassee Properties, Inc. conveyed an equal one-third interest in the subject property to John S. Miller, Jr., Fred W. Baggett and 5 Ronald C. LaFace. Affixed to the said deed were documentary surtax stamps in the amount of 55 cents and State of Florida documentary stamp tax in the amount of 30 cents. By letter dated September 24, 1975, the respondent, State of Florida, Department of Revenue, informed the petitioners that they had failed to pay an additional documentary stamp tax in the amount of $434.70 due on that certain warranty deed described above as having been recorded on April 23, 1973 in the Public Records of Leon County, Florida. This proceeding was initiated by petitioners after having received said letter from the respondent for a determination that the assessment was improper in that the subject conveyance was not a taxable event. Respondent has asserted that a tax of $434.70 is due and owing from the petitioners. In addition, they have assessed an additional 100 percent penalty for a total claim of $869.40 exclusive of interest or other penalties. The assessment was determined by the Department of Revenue on the basis of adding the original principal balance of the three above described notes secured by mortgages. The original principal amount of the notes was $144,905.84. By the application of the tax imposed by Section 201.02, Florida Statutes, if the petitioners have any liability for payment of the documentary stamp tax, then the determination of $434.70 as an assessment is a correct figure. Petitioners' exhibits 1 through 4, respondent's exhibit 1 and 2, and posthearing briefs of counsel are appended to the record.
Recommendation That petitioners be, found not liable for the proposed assessment of documentary stamp tax and penalty under Chapter 201, Florida Statutes. Done and Entered this 10th day of August, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Edwin J. Stacker, Esquire Department of Legal Affairs the Capitol Tallahassee, Florida 32304 Daniel J. Wiser, Esquire Post Office Box 1752 Tallahassee, Florida 32302
Findings Of Fact From September 22, 1975, to December 24, 1975, Kopf was a registered real estate salesman in the employ of FAR, a registered corporate broker, located in Dade County, Florida. During that period of time, FAR was engaged in an enterprise whereby advanced fee listings were obtained from Florida property owners. Salesmen known as "fronters" or "qualifiers" were employed to place calls to Florida property owners whose names and phone numbers had been provided to the salesmen by FAR. The prospects were asked if they cared to list their real estate with FAR in anticipation of resale. It was explained that there would be a refundable fee to be paid by the property owner for the listing. The refund was to occur upon sale of the property. If the prospect was interested, then certain literature was mailed out to them. Other salesmen were employed as "drivers" who would make the second contact of the prospect who indicated an interest in listing his property. The driver would secure a signed listing agreement along with a check for $375.00 which constituted the refundable listing Fee. There was no evidence that any of the listings obtained by FAR were ever resold. There were, however, three parcels of land in negotiation for sale when the operations of FAR were terminated in June, 1976. There was to be a division separate and apart from the "fronters" and "drivers" to do the actual selling of the property. The listings were advertised in the Fort Lauderdale area but there was no evidence to establish whether or not other advertising occurred. In November of 1975, Kopf telephoned Mr. Harold E. Triplett, a resident of Pomeroy, Ohio. Mr. Triplett was the owner of two lots in the Cape Coral residential development. Kopf represented to Mr. Triplett that he, Kopf, had a buyer for the Triplett property which was a foreign company seeking tax advantages. Kopf guaranteed that the property would be sold by November 29, 1975. November 29 came and went without a closing on the Florida property. This, notwithstanding the fact that Kopf had advised Triplett that the property was already sold and that the $347.20 check that Triplett had sent to Kopf was for closing costs. Triplett tried unsuccessfully to contact Kopf but was advised that the telephone had been disconnected. Notwithstanding the fact that FAR had never resold any of its listings Kopf represented to Triplett that he had successfully concluded similar transactions. As to the remaining allegations numbered 1, 3 and 4 above, there was a total absence of evidence and, hence, a failure of proof as to misrepresentations of those facts. FREC introduced no evidence to establish that the prices for which the properties were listed were reasonable listing prices and further introduced no evidence to show that Kopf represented that the property would be advertised nationwide and in foreign countries, or that the company had foreign buyers wanting to purchase the property listed with FAR, with the exception of Kopf's property, or that such representations, if made, were false. However, the evidence establishes that Kopf represented that the property would be sold within 30 days of the listing, which representation was false, and that Kopf knew that the representation was false.
Findings Of Fact The area of dispute involves an alleged insufficiency of payment of documentary stamp tax and documentary surtax, and associated penalties for the insufficiencies, in transactions which are reflected in the Exhibit "C" to the Petition. The parties did not dispute the accuracy of the computation found in the Exhibit "C" to the petition, which was prepared by an investigator of the Respondent. The Petitioner contends that he is only responsible for paying the amount of documentary stamp tax and documentary surtax on the value of the real estate which was conveyed to the several grantees shown in Exhibit "C", as opposed to paying documentary stamp tax and documentary surtax on the value of the real estate, together with the value of the home which was built on that real estate. The facts show that the Petitioner has only paid documentary stamp tax and documentary surtax on the value of the real estate which he conveyed to the several grantees in Exhibit "C". In describing the arrangement between the Petitioner and his wife with the several grantees, The Petitioner and Respondent stipulated that Petitioner's Exhibit #1 accurately represents the documents involved in the initial contact between the Petitioner and the grantee. The Petitioner's Exhibit #1 is a composite exhibit which shows a blank sales contract and installment contract prepared by the Petitioner, together with a copy of an executed sales contract and installment contract in behalf of one of the several grantees. This document has as its function providing a rough estimate in behalf of the parties on the question of the cost of a lot and home, together with the attendant tangible property items that go with the sale. This document is subject to the special conditions of the Farmers Home Administration of the United States Department of Agriculture and is not binding on the grantee. The parties stipulated that Petitioner's Exhibit #2, a composite exhibit, was utilized in the case of the several grantees in this matter. The Petitioner's Exhibit #2 is a construction contract in blank form and a form as executed in behalf of one of the grantees. This construction contract is prepared by the Farmers Home Administration, United States Department of Agriculture. This construction contract identifies the price and contains a general description of the lot which was sold by the Petitioner, and is executed after the grantee has met with the Farmers Home Administration and been approved for a loan. Prior to the execution of the construction contract, the grantees came to the place of business of the Petitioner, which is an office in the back of his home. This meeting was not pursuant to any advertising other than communication by other parties who had sought the services of Jerry W. Thomas, who is a general contractor, certified by the Farmers Home Administration to build homes which the Farmers Home Administration is financing. The grantee would come to Mr. Thomas's office and discuss the construction of a home, and, in the case of the grantees in Petitioner's Exhibit "C", it is contemplated that that home would be built on a lot which Mr. Thomas and his wife owned and would convey to the grantee. In fact, in every instance reflected in Exhibit "C" the home was constructed by Mr. Thomas and was constructed on a lot which Mr. Thomas and his wife sold to the grantee. Before the construction contract was signed, it was necessary for the grantee to be approved for financing by the Farmers Home Administration. It was also necessary under the system that was utilized in financing the matters set forth in the Exhibit "C", that the Petitioner sign an irrevocable option to purchase realty, which was executed in favor of the several grantees. A replica of this form is made a part of the record as Petitioner's Exhibit #4. The meaning of the option to purchase real property, was that the Petitioner stated a price for his real estate and he was bound by that price and must sell the real estate to the grantee, whether or not the Petitioner ever built a home on the real estate. This option to purchase real property was a precondition to the overall financing scheme which was utilized by the Farmers Home Administration. This particular method was identified as a contract method. Should the appraisal of the property as conducted by the Farmers Home Administration indicate that the asking price stated in the option to purchase real property was in excess of the appraised value, then the Petitioner could have refused to sell. In the case of all the grantees found in Exhibit "C", the price stated for the real property was acceptable and the contract was consummated. The technique for executing the contract conditions once the option to purchase real property had been completed and accepted was as follows: A closing was held at which point a warranty deed was executed by the Petitioner and his wife in favor of the several grantees. Payment for the real estate was made from a supervised account in behalf of the several grantees. The warranty deed, which form is shown in Petitioner's Exhibit #3 and is stipulated as being the form utilized in all conveyances alluded to in Petitioner's Exhibit "C" was then recorded. At the moment of recording, documentary stamp tax and documentary surtax was paid on the amount of the real property only. On the day that the warranty deed was recorded, a mortgage and note was also recorded in favor of the Farmers Home Administration for the amount financed by the grantees. Subsequent to the closing alluded to in paragraph one and two of this explanation, the grantee, at his option, had the home constructed. The option referred to, pertains to the ability to hire any contractor that he desired to construct the home on the property which had been conveyed to him. The Petitioner would not have had the right to oppose the grantees' choice of contractor. Had the several grantees desired to choose other contractors, then the Petitioner would have been required to sell his real estate at the option price and that would have concluded the contract. In all cases shown in the Exhibit "C" to the petition, Mr. Thomas not only conveyed the property but constructed the homes on the property as the chosen contractor and was paid out of the supervised account through scheduled payments and a final disbursement made at the 100 percent completion point. Subsequent to the time that the warranty deed conveying the lot, together with the mortgage and note, were recorded, an audit was performed by the Respondent and an assessment placed for the additional value reflected in the the cost of constructing the home. This assessment was for the unpaid documentary stamp tax, documentary surtax and penalties associated with those deficiency assessments.
Findings Of Fact Petitioner is incorporated under the laws of the State of Virginia and is registered to conduct business in the State of Florida. Robinson's of Florida is a Division of Petitioner, and is currently engaged in the sale of merchandise and retail through four Robinson's of Florida department stores situated in the Florida counties of Pinellas, Orange, Hillsborough and Seminole. Respondent is an agency of the State of Florida whose duties include the assessment of taxes and penalties imposed under Chapter 201, F.S. An unspecified portion of Robinson's retail sales in Florida is made pursuant to revolving charge agreements between Robinson's and its customers. These sales are made under retail charge agreements (Petitioner's Exhibit 1) which provide that in consideration of credit to be extended by Robinson's of Florida, the customer agrees to pay the full amount owing on the account within 25 days from the billing date of each monthly statement or monthly payments of not less than the payment required by a table included in the agreement which lists minimum monthly payments based upon the unpaid balance of the account. The agreement further provides that in case of a failure to pay the minimum payment due on the monthly statement, that the amount shown as the new balance on the monthly statement shall at the option of Robinson's become due and payable immediately. It provides that the charge card issued to the customer may be terminated or revoked at any time and must be surrendered to Robinson's upon demand. It states that the agreement constitutes a "revolving account" within the meaning of Section 2 subsection 8 of the Florida Retail Installment Sales Act, Chapter 59-414, Laws of Florida, 1959. Each time a customer purchases merchandise pursuant to a Robinson's revolving charge account, he executes a sales ticket (petitioner's Exhibit No. 2 and Exhibit B to Petition) which includes the following printed statement on the face of the ticket. "I agree to pay the total amount of this sales check in accordance with my credit arrangements with you." During March, 1975, Respondent conducted an audit of all of Robinson's revolving charge account sales records in its Florida stores. As a result of the audit, Respondent issued to Petitioner a proposed notice of assessment of tax and penalty under Chapter 201, F.S., dated March 20, 1975, (Exhibit C to Petition). The proposed notice of assessment requested payment of documentary stamp taxes in the amount of $17,925.00, pursuant to Section 201.08(2), F.S., and a penalty in -- the same amount pursuant to Section 201.17(2), F.S., (Exhibit's C & E to Petition). Petitioner requested and was afforded an opportunity to meet with a representative of Respondent for the purpose of objecting to the aforementioned assessment of taxes and penalty on May 6, 1975, in St. Petersburg, Florida. Subsequent to this conference, Petitioner received a letter dated May 9, 1975, from Respondent reaffirming the proposed total assessment and penalty in the total amount of $35,850.00 (Exhibit E to Petition). No evidence has been presented that documentary tax stamps for the sales in question were purchased, affixed to, or placed on the instruments in question.
Recommendation It is recommended: That the proposed assessment of documentary stamp taxes against the Petitioner in the amount of $17,925.00 under Section 201.08(2), Florida Statutes, be determined valid, and that collection thereof be made in accordance with appropriate law and regulations. That the proposed assessment of a penalty against thee Petitioner in the amount of $17,925.00 under Section 201.17(2), Florida Statutes, be determined invalid and set aside. DONE and ORDERED this 30th day of September, 1975, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Larry Levy, Esquire James D. Beasley, Esquire Assistant Attorney General P.O. Box 391 Department of Legal Affairs Tallahassee, Florida The Capitol For the Petitioner Tallahassee, Florida 32304 For the Respondent ================================================================= AGENCY FINAL ORDER =================================================================
