The Issue The issue in this case is whether Respondent failed to pay tax surcharges, penalties, and interest owed on the sale of cigarettes, and, if so, the amount that is currently due and owing.
Findings Of Fact The Department is the state agency responsible for monitoring the sale of tobacco products and for assuring that all businesses selling such products pay the requisite surcharges on each pack of cigarettes sold. Respondent is a convenience store which is licensed to sell tobacco products. The store also sells alcoholic beverages, food items, and miscellaneous other products. The sales tax associated with the sale of tobacco products (only) is at issue in this proceeding. The 2009 Florida Legislature enacted legislation imposing a $1.00 per pack surcharge on each pack of cigarettes sold in this state beginning July 1, 2009. Retailers having a cigarette inventory and, as of that date, would be required to pay a "floor tax" of $1.00 per pack in their inventory. In February 2010, the Department received a letter from an anonymous source (who identified himself as "A Good Civilian (Business Owner) (Who always pays tax)[sic]." The letter had a flyer attached to it which had been distributed by Respondent. The flyer identified a number of products for which buyers could realize "[t]he lowest prices in Polk County." Included in the list of products were various tobacco items, including cigarettes. The anonymous source's letter suggested that anyone who could sell the tobacco products at those prices must be doing something illegal. Based on the allegations in the anonymous letter, the Department decided to investigate. A team was sent to one of Respondent's stores (hereinafter referred to as "Store 1") on February 18, 2010. The team did an inventory of tobacco products at Store 1. There were 2,855 packs of cigarettes at Store 1. Some of the cigarettes were in individual packs; some were still in cartons (which contain ten packs each). The cigarette packs had the requisite state stamp on them. However, most of the packs had a stamp which had been in existence prior to the change in law on July 1, 2009. The fact that most of Store 1's cigarette packs had the old stamp meant that the cigarettes had been around for a while. The inventory eventually formed the basis for an audit performed on Respondent's other store ("Store 2"). Store 2 had just recently opened and was stocked with cigarettes brought over from Store 1. There were, therefore, no invoices available at Store 2 as to the purchase of the cigarettes it had on hand. The audit process involved a determination of distributors from which Respondent purchased its cigarettes. The two primary distributors were Sam's Club and Dosal. The Department ascertained from those distributors how many packs of cigarettes Respondent had purchased over a given span of time. Sam's Club provided records seeming to indicate the purchase of 37,770 packs between February 1 and June 29, 2009; another 9,090 packs were purchased between July 4, 2009, and January 29, 2010. Dosal said 65,490 packs had been purchased between March 3 and June 23, 2009; another 17,800 were purchased between July and December 2009. An audit investigation was commenced at Store 2 on March 17, 2010. The auditors did not ascertain the actual number of packs of cigarettes on hand at the store on that date. The auditors talked with the owners of the stores (Salah Rabi and his brother, Mohammed Rabi) about their sales history. Pursuant to requests of the auditors, the owners also sent in some additional records reflecting their sale of cigarettes. In order to calculate the number of cigarette packs sold by Store 2 during a four-month period, the auditors determined how much business the store had done in all products (including non-tobacco products) for that period. Respondent gave the Department a list of daily sales on all products sold and the taxes paid on those products for the period February 2009 through January 2010. The average monthly sales amount for the store during the audit period was $25,000. However, the Department found the information provided by Respondent to be incomplete and, thus, unreliable. The auditors then assumed that 80 percent of the store's sales were for cigarettes1/ and that the average price per pack was $4.50. Using this formula, the auditors found that approximately 4,444 packs of cigarettes were sold each month, which the auditors rounded up to 4,500. Thus, for the audit period, the auditors estimated that 18,000 packs of cigarettes were sold. Neither of the auditors testified at final hearing as to the reasonableness of the formula or as to their alleged conversations with the owners. Based on their findings, the auditors concluded that Respondents owe a balance of $77,798.23. That figure was derived as follows: Total packs purchased 3/09 - 6/09 from Dosal 65,490 from Sam's 37,770 Total purchases prior to 7/1/09 103,260 Estimated monthly sales at 4,500 packs per month for four months 18,000 Total estimated inventory on 7/1/09 85,260 Floor tax due on estimated inventory $85,260 Floor tax paid $ 4,963,09 Unpaid floor tax $80,296.91 Overpayment on other tobacco product $(2,498.54) Total cigarette floor tax due $77,798.37 Missing from the evidence presented was any statement by the Department as to whether, on March 17, 2010, or any other date, there were 80,000-plus packs of cigarettes visible at the store. It seems plausible that so many packs, even if in cartons of 10 packs apiece, would be easy to identify. Respondent refutes the basic premise of the auditor's findings. Using cash register receipts (called Z Tapes) from March and May 2009 (two of the four months at issue), Respondent was able to establish a more accurate percentage of cigarette sales versus all products sold. The Z Tapes are printed out each day by way of turning a key on the cash register. The tapes print out a receipt showing the date, the number of packs of cigarettes sold, the number of food items sold, and the number of taxable items sold. According to the Z Tapes, close to 90 percent2/ of Store 2's total sales for those months were cigarette sales, i.e., a much higher percentage than used by the auditors. The evidence presented by the owners is credible and persuasive. Respondent also provided a calculation of its price per pack of cigarettes. The price depends, in part, on how much they pay the distributors for each pack or carton of cigarettes. Of its four best selling cigarettes, the following costs were determined for the period March through June 2009: Brand Cost Markup Markup% Price 305's 2.93 .06 2 2.99 Marlboro 4.66 .08 1.7 4.74 Romy 2.75 .21 7.0 2.96 Newport 4.45 .34 7.6 4.79 Then, using the inventory of products on hand, a weighted average markup percentage was calculated as follows: Brand Weighted Number Weighted Cost Weighted Price Markup 305's 5,900 17,287 $17,641 Marlboro 1,957 9,394 9,276 Romy 1,611 4,430 4,769 Newport 108 454 517 TOTAL 31,565 $32,203 2.02% Based on the foregoing calculation, the owners estimated an average price per pack of $3.00, i.e., much less than the $4.50 per pack figure utilized by the auditors. The unrefuted testimony of the owners is credible and seems reasonable based upon the facts. Inasmuch as neither of the auditors was available to provide further justification for their price-per-pack estimation, the owners' calculation is accepted for use in this proceeding. Respondent purchased 91,520 packs of cigarettes during the period of March 2009 through June 2009. Respondent sold 55,634 packs of cigarettes during that same period. The average price per pack sold was $3.00 (three dollars). Based on the foregoing, Respondent had a floor inventory of 35,886 packs of cigarettes on July 1, 2009. Respondent paid a cigarette surcharge floor tax of $4,963.09 on July 15, 2009. Respondent also overpaid its floor tax for other tobacco products by $2,948.54 for a total of $7,815.83 in payments to the Department. That amount should be credited against any tax liability determined in this proceeding. The Department provided bank statements for Store 1 and Store 2 showing much larger monthly transactions than evidenced by the stores' sale of products. That fact raised a red flag justifying further investigation into Respondent's business. However, the discrepancy was explained by the fact that Respondent does a large amount of check-cashing business at its stores. The large bank transactions are not relevant to the issue in this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, imposing a cigarette surcharge in the amount of $35,886 (thirty-five thousand, eight hundred and eighty-six dollars) against Respondent, Discount Zone, Inc., d/b/a Lakeland Discount Beverage, Inc., minus $7,815.83 already paid. DONE AND ENTERED this 12th day of May, 2011, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2011.
The Issue The issues in this case are whether the allegations of the Administrative Action are correct, and, if so, what penalty should be imposed.
Findings Of Fact At all times material to this case, the Respondent was the operator of Mi Gente Market and held Florida license number BEV6803562, Series-2APS. The license permitted the Respondent to sell packaged beer, wine, and tobacco products. An investigator employed by the Petitioner entered Mi Gente Market on April 18, 2008, while conducting an investigation into the sale and distribution of alcoholic beverages by Azteca Imports, LLC. Azteca Imports, LLC, is not licensed to sell or distribute alcoholic beverage products in Florida. The investigator observed two one-liter bottles of "Tres Coronas Mexican Sherry Wine" available for sale at Mi Gente Market. Upon inquiry, Cornelio Reyes-Vazquez, a relative and employee of Mayra N. Vazquez, stated that the Tres Coronas wine had been purchased from Azteca Imports, LLC. The investigator also observed approximately 115 packages of “Belmont” cigarettes available for sale at Mi Gente Market. The Belmont cigarette packages did not have State of Florida excise tax stamps. Cornelio Reyes-Vazquez admitted to the investigator that the cigarettes had been purchased from an unregistered distributor. The Florida excise tax for cigarettes is 33.9 cents per pack. The total unpaid excise tax for the Belmont cigarettes at Mi Gente Market is $38.98.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order finding Mayra N. Vazquez, d/b/a Mi Gente Market, in violation of the statutes referenced herein and imposing an administrative fine of $3,500.00 plus applicable excise tax of $38.98 for a total fine of $3,538.98. DONE AND ENTERED this 5th day of January, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 2009. COPIES FURNISHED: Michael John Wheeler, Esquire Department of Business and Professional Regulation Northwood Center, Suite 40 1940 North Monroe Street Tallahassee, Florida 32399-2202 Mayra N. Vazquez Mi Gente Market 1155 G N Washington Boulevard Sarasota, Florida 34236 Ned Luczynski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Cynthia Hill, Director Division of Alcoholic Beverages and Tobacco Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondent’s consumer tax exemption certificate should be revoked.
Findings Of Fact Respondent, The Seminole Tribe of Florida (Tribe), is a federally chartered Indian tribe pursuant to Section 16 of "The Indian Reorganization Act of 1934," 48 Stat. 987 (1934), (current version at 25 U.S.C.A. Sections 476-477 (1996)). Petitioner, the Department of Revenue (Department) is the agency of the State of Florida which is authorized to administer the collection of taxes and the issuance of consumer certificates of exemption, pursuant to Chapter 212, Florida Statutes. The consumer certificate of exemption at issue in this proceeding, certificate number 16-199584-51C, was issued to the Tribe by the Department on May 13, 1987. This certificate reflects an expiration date of July 13, 1992, and indicates that the Tribe is exempt as "Federal." The Department has continuously treated the Tribe as an exempt organization since at least May of 1987 and possibly as early as 1960. The Tribe timely sought renewal of certificate number 16-199584-51C by filing a DR-5R, "Renewal Application for Consumer Certificate of Exemption." Prior to the time for renewal of the Tribe’s consumer certificate of exemption, its file was "flagged" for special review. Flagging is the standard procedure used by the Department when the Department becomes aware or receives information that a consumer certificate of exemption may have been issued in error. Although the Tribe’s consumer certificate of exemption expired in 1992, the Tribe has been allowed to continue to use the exemption from the expiration date up to the present time. It is the policy of the Department to honor any expired consumer certificate of exemption until the Department either grants an application for renewal or enters a final order denying the renewal. From May 7, 1992, to June 20, 1994, the Department sent five substantially identical form letters to the Tribe evidencing this policy of maintaining the status quo until a final determination is made. The letters contain the following statement: Please be advised the department does realize that the aforementioned organization is recognized as a political subdivision by the federal government. However, this office will require additional time to review pertinent documentation and assess the department’s technical opinion before responding to the organization’s request for renewal of its Consumer Certificate of Exemption. The Seminole Tribe of Florida is still authorized to make sales tax exempt purchases in the state of Florida. The organization’s Consumer Certificate of Exemption is still valid and shall remain in effect until the department has completed the review process. On August 24, 1993, Rick McClure, an Assistant General Counsel of the Department, advised Bonnie Garris, an accounting administrator for the Tribe, that the Department took the position that the Tribe was not entitled to an exemption certificate, but that the Tribe would be immune from taxation on certain transactions. Mr. McClure further advised Ms. Garris that the Department was in the process of drafting a rule and a certificate dealing with immunity. The Department has not promulgated a rule dealing with the subject of Indian tribes' immunity from sales and use taxation, and the Department has not developed immunity certificates. Certificate number 16-199584-51C was not renewed by the Department; instead, on June 28, 1996, the Department issued an administrative complaint seeking to revoke the certificate on the basis that the Tribe does not meet the statutory requirements for exemption contained in Section 212.08(6), Florida Statutes. The Tribe has its own government with a tribal constitution and by laws. All laws enacted by the tribal government must be approved by the federal government. The reservation lands of the Tribe are owned by the federal government. The Tribe has numerous contracts, grants, and cooperative agreements with the federal government. In particular, the Tribe enters into a large number of contracts in accordance with Public Law 93-638, codified in 25 U.S.C. Section 450 et seq., known as the Indian Self Determination and Education Assistance Act (ISDEAA) of 1975, as amended in 1988 and thereafter. These contracts are hereinafter referred to as "ISDEAA contracts" or "self-determination contracts." Through the self-determination contracts, the Tribe provides law enforcement, education, medical, dental, and other health related services which would otherwise be provided directly by the federal government. The Tribe submits budgets to the federal government for approval for the use of the federal funds for the self- determination contracts. These budgets do not account for state sales taxes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered revoking the Seminole Tribe of Florida's consumer certificate of exemption. DONE AND ENTERED this 7th day of July, 1997, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 1997. COPIES FURNISHED: Tracy Allen, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Donald A. Orlovsky, Esquire Servico Centre South 1601 Belvedere Road, Suite 402 West Palm Beach, Florida 33406 John Mellichamp, III, Esquire Department of Legal Affairs The Capitol Tallahassee, Florida 32399-1050 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399
Findings Of Fact Respondent is the holder of a beverage license grand-fathered in by Section 561.20(2)(b), Florida Statutes (1975), which has as a condition that respondent maintain facilities for serving full course meals to 200 patrons. After being closed for some years, respondent reopened for business on May 13, 1977. David Maloney was hired as cook and manager and became an officer of respondent. On June 3, 1977, Mr. Grady Leon Broxton, Jr., a beverage officer in petitioner's employ, inspected respondent's premises and inventoried chairs, tables, and tableware. He found 204 chairs and 51 tables, 176 plates, 125 forks, 80 knives, 250 bread dishes, 250 salad bowls, 86 cups and less than 200 spoons. Accordingly, Officer Broxton issued a formal notice of these deficiencies, directing respondent to bring up to 200 the numbers of plates, spoons, forks, knives and cups. When Officer Broxton returned on June 9, 1977, he found that respondent had cured the deficiencies and was in full compliance with the conditions of its license. By enacting Florida Laws Chapter 77-409, the 1977 Legislature increased the excise tax on packages containing 20 cigarettes from 17 to 21 cents per package, effective July 1, 1977, Florida Laws, Chapter 77-409, ss. 1 and 5. On July 7, 1977, Officer Broxton entered respondent's premises and advised David Maloney that he should multiply by $.04 the number of cigarette packages respondent had for sale on July 1, 1977, and send a check or money order in that amount to petitioner. Officer Broxton noticed approximately five cartons of cigarettes on the premises at that time. On July 10, 1977, David Maloney wrote petitioner that, as of July 1, 1977, "only two packs of cigarettes were on hand," petitioner's exhibit No. 2, and enclosed a check in the amount of eight cents ($.08). In the cover letter, Mr. Maloney addressed petitioner's employees as "you Assholes." Shortly after mailing the letter and check, Mr. Maloney quit respondent's employ without notice. When respondent's president, William B. Miller, III, discovered that Mr. Maloney had left, he also noticed that cigarettes, liquor and silverware were missing. On July 21, 1977, petitioner's Lieutenant George Fader entered respondent's premises and noticed customers drinking alcoholic beverages at the bar. He introduced himself to Mrs. Miller, who was behind the bar. She said the eight cents ($.08) must have been a mistake and that Mr. Maloney had gone but that she did not know where. Lt. Fader noticed that there was a pool table in the restaurant. At the time of Lt. Fader's visit, Mr. Miller was at respondent's bank putting in stop payment orders for fear Mr. Maloney might have drawn checks on respondent's account for unauthorized purposes. Before leaving, Lt. Fader made a hurried count of chairs, exclusive of folding chairs, and concluded that there were some 185 on the premises. The following day, Lt. Fader and Officer Broxton returned to respondent's premises and advised Mr. Miller that respondent could be charged criminally with tax fraud. When petitioner's agents told Mr. Miller that they estimated that there were 60 packages of cigarettes on the premises on July 1, 1977, Mr. Miller offered to write a check for two dollars and forty cents ($2.40). Mr. Miller wrote petitioner a check, but, at Lt. Fader's suggestion, the amount was reduced by eight cents ($.08) to two dollars and thirty-two cents ($2.32). Officer Broxton counted 44 tables and 140 chairs, excluding folding chairs, even though he had included these on his earlier visit. He did not count folding chairs on July 22, 1977, because Lt. Fader directed him not to. Officer Broxton found 121 teaspoons, 112 forks, 154 knives and 118 cups on July 22, 1977. Lt. Fader told Mr. Miller that there need not be 200 cups, if glasses and cups together numbered 200 and if there were 200 water glasses. There was no evidence as to the number of glasses on respondent's premises on July 22, 1977.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner assess a civil penalty against respondent's license in the amount of twenty-five dollars ($25.00). DONE and ENTERED this 27th day of February, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Francis Bayley, Esquire The Johns Building 725 South Bronough Street Tallahassee, Florida 32304 Mr. W. R. Phillips, Esquire Post Office Box 594 Carrabelle, Florida 32322
The Issue Did Respondent, Tarpon Liquors LLC (Tarpon Liquors), timely request a hearing to contest the Amended Order of Penalty Assessment issued by Petitioner, Department of Financial Services, Division of Workers' Compensation (Division)?
Findings Of Fact The Division is the state agency responsible for enforcing the statutory requirement that employers secure payment of workers' compensation for the benefit of their employees. § 440.107(3), Fla. Stat. (2019). Christina Brigantty is a Division compliance investigator. She checks employers for compliance with Florida's workers' compensation law. If an investigator concludes that an employer is not in compliance, she issues a Stop-Work Order along with a penalty assessment for the asserted periods of non- compliance. The Division determines periods of non-compliance by examining a business's records obtained from the business through a business records request. Investigator Brigantty performed a compliance check of Tarpon Liquors on July 31, 2018. As a result of that check, the Division issued Tarpon Liquors a Stop-Work Order and Order of Penalty Assessment. Subsequently the Division issued an Amended Order of Penalty Assessment dated December 13, 2018. It included a Stop- Work Order and Notice of Rights advising that Tarpon Liquors had 21 days from receipt of the Amended Order to file a petition for a hearing challenging the assessment. The Notice of Rights also stated that failure to request a hearing during that period waived the right to challenge the assessment. The Division transmitted the Amended Order to Tarpon Liquors, attention Ronald J. Maniscalco, registered agent, at 907 Narragansett Lane, Key Largo, Florida, by certified mail. The Narragansett Lane address was the residence of Mr. Maniscalco and Tarpon Liquors' managing member, Mr. Maniscalco's wife, Lorraine Maniscalco. The Division received the certified mail receipt from the postal service with the name Lorraine Maniscalco signed in the box for "Agent", and December 28, 2018, indicated as the date of delivery. Tarpon Liquors maintains that the signature on the certified mail receipt for the Amended Order is not Ms. Maniscalco's signature. Mr. Maniscalco believed that the mail carrier forged the signature. Mr. Maniscalco thought the signature was a forgery because Lorraine Maniscalco always signs her signature the same way and her signature does not match the signature on the certified mail receipt. Mr. Maniscalco filed a complaint with the United States Postal Service, which investigated the matter. The investigation included questioning the mail carrier who could not remember the certified mail document in question. The postal service reached no conclusions. During December 2018, Mr. and Ms. Maniscalco were in the process of moving. They were traveling between Tampa, Punta Gorda, and Key Largo frequently. Mr. and Ms. Maniscalco are unsure whether they were home December 28, 2018, and if they were, when they may have been there. In addition, their Narragansett Lane house was for sale. Consequently, they had to vacate the house frequently when the realtor was showing the house to potential buyers. There is a possibility the realtor signed in an effort to be helpful. Mr. Maniscalco, Ms. Maniscalco, and Ms. Shea, their daughter and also a manager of Tarpon Liquors, are all confident that the signature on the certified mail receipt is not Ms. Maniscalco's signature. There are significant differences between the signature on the receipt and Ms. Maniscalco's signature on her driver's license and on the sample signature admitted into evidence. The bottom loop of the "L" is notably different. The angle of the "M" is different. In addition, Ms. Maniscalco's "M" drops below the signature line while the "M" on the receipt does not. The evidence does not prove who signed the receipt. The weight of the credible, persuasive evidence, however, proves that Ms. Maniscalco did not sign it. In June 2019, Ms. Shea learned of the Amended Order in conversations with Investigator Brigantty. On July 3, 2019, Ms. Brigantty provided Ms. Shea a copy of the Amended Order, including the Notice of Rights. This was the first time that Tarpon Liquors received written notice of the Amended Order and the right to request a hearing. On July 9, 2019, the Division received a request for hearing dated July 5, 2019, from Mr. Maniscalco, challenging the Amended Order. This is more than 21 days after the December 28, 2018, date on the receipt for certified mail. The request for hearing stated: I never received notice of the Amended Order of Penalty Assessment that was sent on 12/12 and signed for on 12/28. The signature on the Return Receipt is not Lorraine Maniscalco's signature. Please see attached Drivers licenses for verification of Lorraine Maniscalco's actual signature for comparative purposes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, accept the request for hearing of Tarpon Liquors LLC as timely. DONE AND ENTERED this 3rd day of January, 2020, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January, 2020. COPIES FURNISHED: Leon Melnicoff, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Ronald Maniscalco Tarpon Liquors LLC 1421 Pine Island Court Punta Gorda, Florida 33950 Lena Marie Shea, Manager Tarpon Liquors LLC 4978 Edgewater Lane Oldsmar, Florida 34677-6342 Rean Knopke, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
Findings Of Fact Respondent Yazgi has an ownership interest in respondent Stop N Shop and is the only individual named on respondent Stop N Shop's license. Respondent Yazgi has a one-third interest in a different store at a different location in Jacksonville, which is also called Stop N Shop. Sometime before noon on October 15, 1976, Mr. Yazgi took one carton of Winston menthol cigarettes and one carton of Silver Thin cigarettes from this second store and transferred them to respondent Stop N Shop where they were offered for resale and where petitioner's agents discovered them, except for one package which was missing. The store from which respondent took the cigarettes is not a licensed cigarette wholesaler.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner impose a civil penalty against respondent in the amount of one hundred dollars ($100.00) DONE and ENTERED this 6th day of December, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Tom Yazgi c/o Stop N Shop 2039 West 12th Street Jacksonville, Florida Mr. J. M. Ogonowski District 3 Department of Business Regulation 1934 Beachway Road Jacksonville, Florida 32207 Mr. Francis Bayley, Esquire Department of Business Regulation Legal Section Johns Building 725 South Bronough Street Tallahassee, Florida 32304
The Issue Petitioner's liability for proposed assessment of fuel tax and penalty pursuant to Chapter 206, Florida Statutes.
Findings Of Fact Petitioner Barkett Oil Company, Miami, Florida, is a distributor of motor fuel and a dealer in special fuel licensed by Respondent. During the period 1971 through 1974, it held three licenses for motor fuel and three for special fuel. It owned over 100 fuel service stations during that period. At the time petitioner obtained its licenses, it provided Respondent with a list of its stations' fuel storage tank capacities. However, over the years and prior to 1971, the fuel capacity of 12 stations was increased by the addition of tanks in the total amount of some 57,000 gallons, but Petitioner did not advise Respondent of such changed capacity. (Testimony of Barkett, Respondent's Exhibit 3). In May 1974, D. L. Hunt, Respondent's auditor, conducted an audit of Petitioner's business for the period April 1971 through March 1974. Petitioner made most of its existing records available to the auditor, including purchase and sale invoices, and monthly tax reports which had been timely filed with Respondent during the audit period. Petitioner used Respondent's standard forms for the monthly tax returns which reflected an inventory of fuel at the beginning of the month plus gallons acquired during the month, less nontaxable sales. These computations resulted in net gallonage subject to fuel tax on which the tax was remitted, less a collection fee. Petitioner's standard business practice had been to conduct its monthly inventory in the morning of the last day of the monthly period. However, by this method, sales and deliveries which were made during the remaining portion of the day, and fuel contained in its trucks were reflected in the next month's report. Once the inventory was made, Petitioner recorded the "stick" measurements of fuel on hand at the various stations in its computer and discarded the individual station inventory records. State tax returns were then prepared using the figures derived from the computer "print-out." (Testimony of Hunt, Barkett, Petitioner's Exhibit 1,3). During the course of his audit, Mr. Hunt ascertained that the recorded purchases and sales as reflected on the monthly tax returns were correct. However, he noted that fuel on hand at the end of each month apparently exceeded Petitioner's storage capacity. He therefore asked for inventory records in the form of tank readings, but was informed that they had been destroyed and he was not informed that the readings from the "stick" measurements had been processed by computer and that this stored information was available. Hunt therefore made audit findings that the amount of gallonage on hand at the end of each month over and above Petitioner's storage capacity was taxable, even though there was no showing that the fuel had actually been sold. He also predicated penalties against Petitioner for late payment of tax because sales made during the latter half of the last day of the reporting month were carried over to next month's report. Additionally, he found that certain untaxed sales should have been taxed. In February 1975, a proposed assessment of tax and penalties was issued in the total amount of $375,543.27. A number of informal conferences were held by the parties which resulted in certain adjustments to the proposed assessment, primarily consisting of tax exempt sales. As a result of these conferences, the asserted tax was reduced to $245,652.96, with penalties of $39,405.04, for a total amount of $285,058.00. Thereafter, further reductions were made in the assessment, as reflected in a letter from Respondent's counsel to Petitioner's counsel, dated July 22, 1977. This letter stated that the remaining assessment consisted of tax due in the amount of $27,216.05, with penalties of $63,269.22, for total amount due of $90,485.27. The letter explained that the differences in the penalties consisted of instances where the tax had not been timely paid on fuel which had been sold. For instance, as to license No. 391, the letter showed that although only $2,378.46 in additional tax was due, penalties over the audit period amount to $38,769.19. (Testimony of Hunt, Barkett, Petitioner's Exhibit 2, Respondent's Exhibits 1-2, 5, Hearing Officer's Exhibit 1). During the course of informal negotiations, Petitioner's counsel, by letter of April 17, 1978, to Respondent's counsel, provided a corrected list of the capacity of twelve of its stations. Respondent's auditor Hunt had checked four of these stations, but was unable to determine the existence of additional tanks at those locations. He also declined to accept the computer printout sheets as a basis for determining inventory because the actual tank reading reports were not available. At the hearing, Petitioner's president, Harry Barkett, established that additional tanks had existed at the four locations during the audit period. (Testimony of Hunt, Barkett, Petitioner's Exhibit 4-8, Respondent's Exhibit 3, 4). A certified public accountant retained by Petitioner testified that he had audited Petitioner's books and had personally reconciled inventory amounts for the fiscal year 1972-73. He further testified that Petitioner's accounting procedures were proper and that even if inventory had been overstated, it had no effect on sales, and that any unreported sales during one monthly period would be overstated in the following month, which would balance out any prior underpayments. He had never found any discrepancy in Petitioner's fuel reports and found no accounting reason for retaining "stick" readings after the information had been placed in the computer. (Testimony of Pfeiffer).
Recommendation That Respondent proceed to collect the amount of $5,707.50 from Petitioner for unpaid fuel tax under Chapter 206, Florida Statutes, but that the remainder of the proposed assessment be withdrawn. DONE AND ENTERED this 4th day of October 1979 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October 1979. COPIES FURNISHED: Maxie Broome, Jr., Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Milton J. Wallace, Esquire 2138 Biscayne Boulevard Miami, Florida 33137
Findings Of Fact This case is presented for consideration based on the Notice to Show Cause filed by the Petitioner, Division of Alcoholic Beverages and Tobacco, against Rose L. Lee, who trades as Lee's Grocery. The exact details of the allegation are as found in the issue statement of this Recommended Order, which comments are hereby incorporated into the Findings of Fact. The Petitioner, Division of Alcoholic Beverages and Tobacco, is a division of an agency of State Government, namely, a part of the State of Florida, Department of Business Regulation. One of the functions which the Division of Alcoholic Beverages and Tobacco serves is to regulate those individuals who are licensed to sell alcoholic beverages in the State of Florida. The Respondent, Rose L. Lee, who trades as Lee's Grocery in a location at 2210 Central Avenue, Tampa, Hillsborough County, Florida, is a holder of an alcoholic beverage license issued by the Petitioner. That license number is 39- 0292 and all times pertinent to these proceedings the Respondent held such license. On May 23, 1979, Officer Donald Clifford Levengood went to the licensed premises. Officer Levengood is an employes of the Division of Alcoholic Beverages and Tobacco. The purpose of Officer Levengood's visit was twofold. First, Officer Levengood was there to make a routine inspection of the licensed premises, as is authorized by the statutes which regulate the sale of alcoholic beverages. The second reason that Officer Levengood went to the licensed premises was based upon certain information that he had obtained from an informer, to the effect that cigarettes not bearing the proper Florida tax stamp were sold in the vicinity of the Respondent's licensed premises. The testimony did not reveal that the Respondent had sold that class of cigarettes from her store prior to the officer's inspection. When Officer Levengood arrived at the licensed premises, he spoke with the store manager, one Columbus Lee, the husband of the Respondent. Lee had been running the store as manager for a considerable period of time, to include the month of May, 1979. In keeping with a checklist Officer Levengood began to check items against that list and in that Process found a pack of Pall Mall cigarettes in the licensed premises in a location where the cigarettes were being offered for sale. Levengood noted that this particular pack did not show a Florida tax stamp and after removing this pack from its location he proceeded to remove a number of other packs, all of which were missing the necessary Florida tax stamp. All total, there were fifteen packs in this location which did not evidence the proper Florida tax stamp. Those items were removed from the licensed premises and placed in a bag and those packs and bag were admitted in the course of the hearing as Petitioner's Exhibit No. 1. Further inspection by the officer uncovered eight cartons of Pall Mall cigarettes and those cigarette containers did not carry the necessary Florida tax stamp. Those cartons were consolidated into a bag and became the Petitioner's Exhibit No. 2. Admitted into evidence in the course of the hearing. (By agreement between the parties, the items of evidence were left in the custody and control of the District Office of the Division of Alcoholic Beverages and Tobacco located in Tampa, Florida.) Columbus Lee, when questioned about the origins of those packs of cigarettes that were missing the Florida tax stamps, indicated that a couple of days before the inspection he had purchased ten cartons of Pall Mall cigarettes from persons who were vending these cigarettes from their car at a location across the street from the licensed premises. The number of total packs of cigarettes was ninety-five (95), which is less than fifty (50) cartons. The Respondent, Rose L. Lee, was not in attendance at the licensed premises on May 23, 1979, at the time that the employee of the Petitioner discovered the unstamped cigarettes.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is recommended that the Respondent, Rosie L. Lee, be fined in the amount of Two Hundred Fifty Dollars ($250.00) and in the event that the Respondent fails to pay that fine within thirty (30) days of the date of the final order, that her license to sell alcoholic beverages be suspended for a period of thirty (30) days. DONE and ENTERED this 16th day of November, 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: Daniel Brown, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Rose L. Lee t/a Lee's Grocery 2204 Central Avenue Tampa, Florida 33602
The Issue Whether or not on or about October 28, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, failed to notify in writing, the Division of Beverages, of its change of name, 30 days in advance of such change, contrary to s. 561.33, F.S. Whether or not on or about November 4, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, did fail to submit and certified copy of the minutes of the stockholders' meeting, changing corporate officers, to the Division of Beverages, in violation of Rule 7A-2.07, F.A.C. Whether or not on or about November 12, 1976, investigation revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, had entered into an agreement with one Billy Gene McKinney, which agreement relinquished all or part of the management and control of the licensed premises contrary to Rule 7A-3.17, F.A.C.
Findings Of Fact The Zig Zag Bar, Inc. is the holder of license number 23-2702, series 2-COP, held with the State of Florida, Division of Alcoholic Beverages and Tobacco. This license is held to do business under the name Zig Zag Pub, located at 800 Alibaba Avenue, Opa-Locka, Florida. This case arises on the basis of an investigation conducted by Agent James P. Bates, State of Florida, Division of Alcoholic Beverages and Tobacco. On October 19, 1976 Agent Bates received information from an unidentified confidential informant that the Zig Zag Pub had been sold or leased to one Billy McKinney, a convicted felon. Having received that information, Bates took action to determine whether the Respondent, Zig Zag Bar, Inc. had entered into an agreement with Billy McKinney, which agreement possibly would have relinquished all or part of the management and control of the licensed premises contrary to Rule 7A-3.17, F.A.C. One aspect of the investigation, was the review of the records maintained by the Division of Alcoholic Beverages and Tobacco to determine if Bill McKinney was listed as one of the officers of the subject corporation. This record examination took place in October or November, 1976. This search did not show Bill McKinney being listed as a corporate officer. The corporate officers listed were Phyllis Charlene Henry, President, Sigride Kienle Sowell, also known as Sigride Kienle, Vice-President and Richard M. Knowles, Secretary- Treasurer. Agent Bates went to thee location of the Zig Zag Pub, at 800 Alibaba Avenue, Opa-Locka, Florida, on October 28, 1976. When he arrived he discovered an advertising sign in the front of the licensed premises reflecting the name "Bill's Place". On October 28, 1976 the records of the Petitioner indicated the official name of the licensed premises was Zig Zag Pub. This prompted Agent Bates to make a further inquiry into the true status of the licensed premises, on the subject of ownership and control. Agent Bates checked with the City of Opa-Locka, Florida and discovered that Bill McKinney had completed a questionnaire for an operating license to be held with the City of Opa-Locka, Florida. The license was issued to Zig Zag Pub in the name of Richard M. Knowles; however, the questionnaire application was completed by Bill McKinney who indicated that he was the owner-operator. This information is shown in Petitioner's Exhibits number 1 & number 2 admitted into evidence. Petitioner's Exhibit 1 is the questionnaire and Petitioner's Exhibit number 2 is the city license. Agent Bates also ascertained that Bill McKinney had obtained a water permit from the City of Opa-Locka for the benefit of the licensed premises. In the course of his investigation, Bates talked to Phyllis Charlene Henry, the named President of the Zig Zag Pub, Inc. Ms. Henry stated that the Zig Zag Pub, Inc. still maintained control of the licensed premises, even though the operating manager and Vice-President Sigride Kienle Sowell had left, leaving McKinney as the manager. Bates went to the licensed premises on November 12, 1976 and found Bill McKinney working behind the bar. McKinney explained that he was the manager of the licensed premises. In checking the business records of the licensed premises, a lease agreement was discovered which was signed between McKinney and Richard M. Knowles as an officer with the Zig Zag Pub, Inc. This lease agreement was a two year agreement with an option for McKinney to become a full partner in the corporation known as Zig Zag Pub, Inc. The agreement also authorized Bill McKinney to take full control to operate the business under the present licenses, one of those licenses being the license being held with the State of Florida, Division of Alcoholic Beverages and Tobacco. Petitioner's Exhibit number 3, admitted into evidence is the business contract spoken of. Agent Bates also discovered a number of checks written on an account of Bill McKinney which pertained to expenses of the Zig Zag Pub, Inc. Some of these checks are found in Petitioner's Composite Exhibits number 4 & number 5. Petitioner's Exhibit number 6 is a ledger showing expenditures of the business and reflects entries which correspond to the checks found in Petitioner's Composite Exhibit number 4. Petitioner's Exhibit number 7, admitted into evidence, is a composite exhibit containing invoices that are reflected in the ledger and shows that the invoices were made out to Bill's Place, and paid by the Zig Zag Pub or Bill McKinney. Petitioner's Exhibit number 8, admitted into evidence, is a receipt for a water bill charged to the licensed premises and paid by Bill McKinney. In following up the explanation of the sign found on the outside of the licensed premises, showing the name to be "Bill's Place," an invoice was located in the records. This invoice is Petitioner's Exhibit number 9, admitted into evidence, and shows that the sign had been delivered August 21, 1976. Another exhibit showing the connection of Bill Kinney to the licensed premises is a health inspection form made in the name of "Bill's Place" for the licensed premises and acknowledged by Bill McKinney. This is reflected in Petitioner's Exhibit number 10, admitted into evidence. Finally, there is a letter from the law firm of Bergstresser and DuVal, which indicates a request for payment of the November, 1976 rent due from the licensed premises under terms of a lease entered into by the principles of Zig Zag Bar, Inc. This letter is addressed to Bill McKinney, and is Petitioner's Exhibit number 11, admitted into evidence. While in the licensed premises on November 12, 1976, Agent Bates discussed McKinney's position with the Zig Zag Bar, Inc. McKinney indicated that he had been the manager since June, 1976. In an effort to determine McKinney's position in the corporation of Zig Zag Bar, Inc., Bates inquired of the Secretary of State, State of Florida. A teletype message was forward to Agent Bates indicating that the corporation had been cancelled for nonpayment of corporate fees. However, this message indicated that the last named officers were shown as Phyllis Charlene Henry, President, Sigride Kinele, Vice President and Richard M. Knowles as Secretary-Treasurer. This is reflected in Petitioner's Exhibit number 13, admitted into evidence. On November 19, 1976, the corporation was reinstated upon the payment of its fees. At the time the corporation was reinstated it listed Phyllis C. Henry, President, Kathlene McKinney as Vice-President and Richard M. Knowles as Secretary-Teasurer. Kathlene McKinney is the wife of Bill McKinney. Petitioner's Exhibit number 14, admitted into evidence are the documents showing the reinstatement of corporation and indicates the named officers. The Petitioner had not been made aware of the change of officers, nor received a certified copy of the stockholders' meeting held by the Zig Zag Bar, Inc., which changed the corporate officers. After discovering the change in the corporate officers, Agent Bates met with Richard Knowles and Knowles stated that Sigride Kienle Sowell had been removed as manager and McKinney had been brought in to salvage the Zig Zag Bar, Inc., from its financial difficulties in the licensed premises. Knowles was instructed that he could take action to rectify the problem that he was having and gain compliance with the laws and rules of the State of Florida, Division of Alcoholic Beverages and Tobacco. At the date of hearing, Bill McKinney was still acting as the operator of the licensed premises, and the Zig Zag Bar, Inc., had not filed a certified copy of the minutes of the stockholders' meeting changing the corporate officers, to those reflected in the November 19, 1976 reinstatement of the corporation with the Secretary of State of Florida. Furthermore, the name displayed on the sign in front of the licensed premises was "Bill's Place," and not Zig Zag Bar. After concluding his investigation, Agent Bates related his findings to his superiors and this led to the filing of the notice to show cause which is the subject of this hearing. The notice to show cause contains three counts. The first of those counts alleges that on October 28, 1976, it was shown that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub had failed to notify in writing, the State of Florida, Division of Alcoholic Beverages and Tobacco of its change of name in 30 days in advance of such name change, contrary to s. 561.33, F.S. Specifically, s. 561.33(2) , F.S. states: "no licensee may change the name of his place of business without first giving the Division 30 days' notice in writing of such change." In fact, the name was effectively changed from Zig Zag Pub to "Bill's Place" as discovered on October 28, 1976 and the Petitioner had not been notified 30 days in advance of such change. The Petitioner still has not been notified of such change. The second count of the notice to show cayuse alleges that on or about November 4, 1976 it was discovered that Zig Zag Bar, Inc. d/b/a Zig Zag Pub failed to submit a certified copy of the minutes of the stockholders' meeting changing corporate officers, to the State of Florida, Division of Alcoholic Beverages and Tobacco in violation of Rule 7A-2.07, F.A.C. The pertinent provision of the Rule, is Rule 7A-2.07(2), F.A.C., which states the following: "If any corporation holding a beverage license shall change corporate officers, such corporation shall within 10 days of such change submit a certified copy of the minutes of the stockholders' meeting at which the change in officers was effected to the district office of the district of the Division of Beverage wherein the license held by such corporation is located." The Respondent had changed the Vice-President in its corporation from Sigride Kienle Sowell to Kathlene McKinney, sometime prior to November 19, 1976, as evidenced by their filing with the Secretary of State of Florida. After making this change they failed to submit a certified copy of the minutes of the stockholders' meeting changing the corporate officer to the State of Florida, Division of Alcoholic Beverages and Tobacco within the allotted 10 day requirement. This change still has not been submitted. The third count in the notice to show cause was an allegation that the investigation on November 12, 1976, revealed that the Zig Zag Bar, Inc., d/b/a Zig Zag Pub, entered into an agreement with Billy Gene McKinney which agreement relinquished all or part of the management and control of the licensed premises and alleged that this was contrary to Rule 7A-3.17, F.A.C. Rule 7A-3.17, F.A.C. contains this language: "All business conducted on the licensed premises under the beverage law shall be managed and controlled at all times by the licensee managed by or his authorized employee or employees. The term "employee," as used herein, shall mean a person who received a salary or wages for services performed, for and in behalf of a licensee, under the exclusive control and direction of the latter. It does not include a lessee, and independent contractor or any person employed by collateral agreement to independently manage and control the said business on the licensed premises. Indicia for determining whether a purported managerial contract conforms to this rule are as follows: The licensee must retain control of the operation of the business. Salary or wages must be paid by the licensee to the manager or employee for conduct of the business under the ultimate direction of the former. Social Security and workmen's compensation coverage must be paid and accounted for by the licensee. The licensee must be responsible for all debts of the business and legally entitled to all incomes therefrom. All alcoholic beverages for the business must be purchased in the licensee's behalf and under the license covering the premises. The licensed premises must be operated for all purposes in the name of the licensee or his legal trade name as distinguished from the name or names of any other person or persons. The licensee must be responsible for all conduct of the business and the license involved must be subject to suspension and revocation for any illegal acts committed on the premises or under the beverage law. Complete ultimate authority for the hiring and dismissal of all employees on the premises must rest with the licensee. The licensee must be primarily responsible for the rent, utilities and insurance covering the premises, and all other incidental expenses occasioned in the operation of the business. The licensee must remain at all times responsible for the maintenance and proper operation of equipment on the premises. The contract must contemplate the formation of the relationship of principal and agent between the licensee and the employee within the limits defined and implied by the contract. A contract wherein the so-called employee or manager pays a fixed sum to the licensee whether from net profits or not would not create the employer/employee relationship as contemplated by the rule. Any agreement woven in such language so as to clothe or disguise the true character of a contract either as a lease or a managerial contract will be shorn in order to effect the intent and purpose of the law and rule in this regard. The Pole Star which will guide the Division in determining whether or not a purported agreement is a bona fide managerial contract as distinguished from a lease will depend upon who has ultimate overall control and direction of the licensed premises under the terms of the agreement." In reflecting on the requirements contained in the Rule and comparing it to the facts shown in this case, it is clear that the Respondent has failed to comply with Rule 7A-3.17, F.A.C.
Recommendation It is recommended that the Director of the Division of Alcoholic Beverages and Tobacco suspend license number 23-2702, for a period of 20 days, but that such suspension be withheld for 15 days from the date of the recommended order to: (1) allow Bill McKinney to try to transfer the license number 23-2702 into his name and control; or allow the Respondent to make him an officer, stockholder, or employee entitled to operate the licensed premises; or allow the Respondent to remove him as the manager and operator of the licensed premises; allow application for change of name from Zig Zag Pub to "Bill's Place" or remove a sign indicating that the licensed premises is called "Bill's Place" and to allow the Zig Zag Bar, Inc., to file a certified copy of the corporate minutes of the stockholders' meeting which changed its corporate officers to the present named corporate officers. After the 15 days if the items (1) through (3) haven't been complied with the suspension shall take effect. This recommendation does not consider the acceptability of Bill McKinney as a transferee of the license held with the Division of Alcoholic Beverages and Tobacco or the propriety of the name change; nor does it address the question of possible future violations. DONE AND ENTERED this 29th day of August, 1977, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Denise LaRosa, Esquire 725 South Bronough Street Tallahassee, Florida 32304 Richard M. Knowles Secretary- Treasurer Zig Zag Pub 800 Alibaba Avenue Opa-Locka, Florida
