Findings Of Fact Petitioner, Omni International of Miami, Limited (Omni), is the owner of a large complex located at 1601 Biscayne Boulevard, Miami, Florida. The complex is commonly known as the Omni complex, and contains a shopping mall, hotel and parking garage. On July 30, 1981, Petitioner filed two applications for refund with Respondent, Department of Banking and Finance, seeking a refund of $57,866.20 and $4,466.48 for sales tax previously paid to the Department of Revenue on sales of electricity and gas consumed by its commercial tenants from April, 1978 through March, 1981. On November 22, 1982, Respondent denied the applications. The denial prompted the instant proceeding. The shopping mall portion of the Omni complex houses more than one hundred fifty commercial tenants, each of whom has entered into a lease arrangement with Omni. The utility companies do not provide individual electric and gas meters to each commercial tenant but instead furnish the utilities through a single master meter. Because of this, it is necessary that electricity and gas charges be reallocated to each tenant on a monthly basis. Therefore, Omni receives a single monthly electric and gas bill reflecting total consumption for the entire complex, and charges each tenant its estimated monthly consumption plus a sales tax on that amount. The utility charge is separately itemized on the tenant's bill and includes a provision for sales tax. Petitioner has paid all required sales taxes on such consumption. The estimated consumption is derived after reviewing the number of electric outlets, hours of operations, square footage, and number and type of appliances and lights that are used within the rented space. This consumption is then applied to billing schedules prepared by the utility companies which give the monthly charge. The estimates are revised every six months based upon further inspections of the tenant's premises, and any changes such as the adding or decreasing of appliances and lights, or different hours of operations. The lease agreement executed by Omni and its tenants provides that if Omni opts to furnish utilities through a master meter arrangement, as it has done in the past, the tenant agrees to "pay additional rent therefor when bills are rendered." This term was included in the lease to give Omni the right to invoke the rent default provision of the lease in the event a tenant failed to make payment. It is not construed as additional rent or consideration for the privilege of occupying the premises. Omni makes no profit on the sale of electricity and gas. Rather, it is simply being reimbursed by the tenants for their actual utility consumption. If the applications are denied, Petitioner will have paid a sales tax on the utility consumption twice -- once when the monthly utility bills were paid, and a second time for "additional rent" for occupancy of the premises.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner's applications for refund, with interest, be approved. DONE and RECOMMENDED this 15th day of April, 1983, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of April, 1983.
The Issue The issues are whether Petitioner is delinquent in his child support payments; and if so, whether Respondent may levy the funds from Petitioner's bank account pursuant to Section 409.25656, Florida Statutes.
Findings Of Fact It is undisputed that Petitioner's child support obligation is ongoing. He admits that his overall monthly obligation is $312.00. As of October 24, 2001, Petitioner's was in arrears on his child support obligation in excess of $53.03. Petitioner has not made any payments toward his child support obligation since September 2000. On March 20, 2001, Respondent issued a Notice of Freeze. This notice advised Tampa Bay Federal Credit Union that Petitioner had a past-due and/or overdue child support obligation and that any funds held by Tampa Bay Federal Credit Union in Petitioner's name were frozen pursuant to Section 409.25656, Florida Statutes. At that time, Petitioner had funds in the amount of $53.03 in an account at Tampa Bay Federal Credit Union. On March 27, 2001, Respondent issued a Notice of Intent to Levy. This notice advised Petitioner that Respondent intended to levy on the $53.03 in Petitioner's account with Tampa Bay Federal Credit Union. According to the notice, Respondent intended to take the funds due to Petitioner's non- payment of child support. During the hearing, Petitioner stated that he did not object to Respondent's action to levy on the funds held by Tampa Bay Federal Credit Union. Accordingly, there are no disputed issues of material fact.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is ORDERED: That Respondent enter a final order directing that $53.03 currently held at Tampa Bay Federal Credit Union be applied towards meeting the Petitioner's unpaid child support obligation. DONE AND ENTERED this 13th day of December, 2001, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of December, 2001. COPIES FURNISHED: Michael A. Chang, DC #T18277 Gulf Forestry Camp 699 Ike Steele Road Wewahitchka, Florida 32465 Scott Edmonds, Esquire Department of Revenue Post Office Box 8030 Tallahassee, Florida 32314 Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact During the discovery phase of this proceeding, the Department ascertained from Echo Artz that $4,070 (the "Uncontested Amount") of the assessed tax was not contested. That is, Echo Artz agreed that it owed at least that amount of the total tax assessment of $67,757.46 set forth in the Notice. Of the total amount set forth in the Notice, $54,626.25 was the tax portion and the remainder was interest. No penalties were imposed as of the date of the Notice of Proposed Assessment. The Uncontested Amount was approximately 7.5 percent of the tax portion and approximately 5.9 percent of the total assessment. At the final hearing, during discussion of the Department's Motion to Dismiss, Echo Artz stated that the Uncontested Amount was erroneous. Instead, it stated that $23,135 of the total tax assessment was actually uncontested. The total tax portion of the assessment should be, according to Echo Artz, $57,730. The revised uncontested amount was approximately 40 percent of the total tax portion. Echo Artz did not pay any of the Uncontested Amount or any of the revised uncontested amount pursuant to its own calculations. The Department asserts that inasmuch as Echo Artz failed to pay the Uncontested Amount prior to filing its request for formal hearing, the case must be dismissed as required by law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Department of Revenue, enter a final order of dismissal. DONE AND ENTERED this 18th day of May, 2012, 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 18th day of May, 2012.
The Issue Whether Respondent is subject to a civil penalty for alleged violation of Section 400.424(3)(a), Florida Statutes, and Rule 58A-5, Florida Administrative Code, through failure to provide a timely prorated refund following the death of a resident of Respondent’s facility.
Findings Of Fact Petitioner is the agency responsible for the licensing and regulation of assisted living facilities, and, in this case, specifically “Holly Hill Care Center” in Holly Hill, Florida. Holly Hill Care Center is operated by a corporation owned by Harry Hartman, President, and Mr. Hartman’s wife. Pursuant to a complaint, Ernest H. Cartwright, a health care evaluator employed by Petitioner, conducted an investigation on November 20, 1997, of Respondent’s facility. The complaint, alleging that a timely prorated refund had not been made to a beneficiary following death of a resident, was confirmed. Beatrice Raverini moved into Holly Hill Care Center on August 24, 1997, and died on September 1, 1997. Her personal belongings were removed from her room on September 8, 1997. While the policy of the facility is to process refunds on the first day of the month following termination, an error in communication occurred between the onsite administrator and the facility’s bookkeeper who is located off-site. As a consequence, the refund was not mailed on October 1, 1997. A refund check was prepared and mailed on or about November 1, 1997, and deposited by Mrs. Raverini’s beneficiary on November 14, 1997, in Canada. Approximately 53 days elapsed before the refund was made. Section 400.424(3)(a), Florida Statutes, requires that the refund occur within 45 days or less. The refund check processed and mailed by Respondent erroneously refunded 958 dollars instead of 616 dollars. Since the room was not vacated of personal belongings until September 8, 1997, the refund should have been calculated from that date instead of the date of September 1, 1997. Respondent refunded 342 dollars in excess of what was owed to the beneficiary.
The Issue =================================================================
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing the following relevant facts are found. On November 25, 1974 the Circuit Court, Pinellas County, Florida entered a Final Judgement dissolving the marriage of James Richard Fortner, Jr. and his wife Joyce Adrienne Fortner, granting the father custody of the parties' minor child, James Richard Fortner, III, and incorporating the Property Settlement Agreement (Agreement) entered into by the parties and ordering the parties to comply with the Agreement. Paragraph 2 of the Agreement provides for the father to have the care, custody and control of the minor child, James Richard Fortner, III. The husband agreed to totally support the minor child and waived any contribution from the wife. Further, the father agreed to "always take care of and totally support the minor child." Subsequent to the Final Order dissolving the marriage, the father's mother, Mary J. Fortner, gained physical custody of the minor child. It is unclear how the grandmother gained custody of the minor child since there is no order granting her custody. Subsequent to the grandmother gaining custody of the minor child, she applied for AFDC and was granted public assistance. On June 20, 1985 the Circuit Court, Pinellas County, Florida, entered an Order of Support against the Petitioner in favor of the Department and Mary J. Fortner in the amount of $51.50 per month ($50.00 support + 1.50 fee) to repay the state of Florida for public assistance expended on the minor child. Subsequent to this Order of Support on June 28, 1988, the Circuit Court, Pinellas County, Florida heard a Motion for Contempt and Review for Increase. On August 3, 1988 the court entered an order continuing the matter until September 8, 1988 and ordered the Department to investigate how the grandmother, Mary J. Fortner obtained custody of the minor child from James R. Fortner, Jr. The court file reveals that the hearing scheduled for September 8, 1988 was never held nor does the court file in this case or the dissolution of marriage case reveal any order finding Petitioner in arrears for any child support. The Department claims $547.00 for reimbursement of monies paid through the AFDC program to Mary J. Fortner and $2,047.51 for reimbursement of monies paid to the custodial foster parents for the minor child. There was no evidence that the Department ever attempted to investigate how Mary J. Fortner gained custody of the minor child or ever attempted to collect any of the public assistance funds expended on the minor child from the minor child's father who was granted custody of child and who waived child support from the Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department enter a final order to the effect that the Department is not entitled to intercept the Petitioner's federal tax refund and further recommend that any federal tax refund which may already have been intercepted shall be returned to Adrienne Horne. DONE and SUBMITTED this 29th day of October, 1990, in Tallahassee, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of October, 1990. APPENDIX TO THE RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the Proposed Findings of Fact submitted by the Respondent in this case. The Petitioner did not file any proposed findings of fact and conclusions of law. Specific Rulings on Proposed Findings of Fact Submitted by Respondent 1.-2. Covered in Preliminary Statement. 3.-4. Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. Adopted in Finding of Fact 3. Adopted in Finding of Fact 4. Not material. First sentence adopted in Finding of Fact 7, otherwise not material or relevant. Adopted in Finding of Fact 8. Not material or relevant. Not a finding of fact but a quotation of Section 409.256(1), Florida Statutes, and the Department assertion as to the effect of the Order of Support which should handled in the conclusions of law. Copies furnished to: Adrienne J. Horne P.O. Box 2554 Lake Placid, FL 33852-2534 Lisa A. Heerman, Esq. Mensh and MacIntosh, P.A. 5536 Central Avenue St. Petersburg, FL 33707 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Linda Harris, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1-5, below. Zurich is an insurer domiciled in the State of New York. Zurich is authorized to do insurance business in the State of Florida. Zurich pays insurance premium taxes to the State of Florida. As a foreign insurer doing business in Florida, Zurich is subject to the provisions of Florida's retaliatory tax, Section 624.5091, Florida Statutes. Respondent Department of Revenue (Revenue) is the state agency charged with the duty to implement and enforce Section 624.5091, Florida Statutes. Zurich's interests are substantially affected by Revenue's Rule 12B- 8.016(3)(a)(4), Florida Administrative Code, by virtue of the tax assessment made against Zurich pursuant to the rule. OTHER FACTS Prior to 1989, the Department of Insurance administered insurance taxation. Now, Revenue has that responsibility. Section 213.05, Florida Statutes, directs Revenue to administer provisions of Sections 624.509 through 624.514, Florida Statutes. Section 213.06(1), Florida Statutes, authorizes Revenue to promulgate rules to implement those responsibilities. Rule 12B-8.016 was first promulgated by Revenue in December of 1989 to implement statutory authority of Section 624.429 (currently renumbered as 624.5091). This statute authorized retaliatory taxation against non-domiciled insurers in the amount by which their state of domicile would tax Florida insurers in excess of Florida's comparable tax. The statute provides in pertinent part: When by or pursuant to the laws of any other state or foreign country any taxes, licenses, and other fees, in the aggregate, and any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Florida insurers or upon the agents or representatives of such insurers, which are in excess of such taxes, licenses, and other fees, in the aggregate, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the agents or representatives of such insurers, of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the department upon the insurers, or upon the agents or representatives of such insurers, of such other state or country doing business or seeking to do business in this state. As it existed in 1989 and currently, the statute contains an exclusionary provision expressly excluding from the retaliatory tax any special purpose assessments in connection with insurance other than property insurance. This exclusionary provision is part of Subsection 3 of the current statute, 624.5091, and reads as follows: (3)This section does not apply as to personal income taxes, nor as to sales or use taxes, nor as to ad valorem taxes on real or personal property, nor as to reimbursement premiums paid to the Florida Hurricane Catastrophe Fund, nor as to emergency assessments paid to the Florida Hurricane Catastrophe Fund, nor as to special purpose obligations or assessments imposed in connection with particular kinds of insurance other than property insurance, except that deductions, from premium taxes or other taxes otherwise payable, allowed on account of real estate or personal property taxes paid shall be taken into consideration by the department in determining the propriety and extent of retaliatory action under this section. The parties concede that Revenue's Rule 12B-8.016 accurately tracts the first part of the retaliatory taxation statute. But a subpart of the Rule, 12B- 8.016(3)(a)(4), is challenged by Zurich in this proceeding because that subpart provides for inclusion of the assessment for administration of workers compensation in Florida and comparable assessments in other states. The rule subpart states: (3)(a) Other items which shall be included in the retaliatory calculations are: * * * 4. The workers compensation administrative assessment imposed by s. 440.51, F.S., as well as comparable assessments in other states. The State of Florida imposes assessment on workers compensation carriers such as Zurich in accordance with authority contained in Section 440.51, Florida Statutes, which is entitled "Expenses of Administration." Section 440.51 provides for the pro-rata assessment of all insurers and self- insurers of workers compensation to cover expenses of administering the workers compensation program. The assessment is a "special fund" that does not involve appropriated funds or general state revenues. Zurich's home state of New York imposes a comparable assessment. In accordance with Rule 12B-8.016(3)(a)(4), Florida Administrative Code, Revenue includes calculations for the Worker's Compensation Board Administrative Fund in the state of New York in Zurich's retaliatory tax calculation. In drafting the rule in 1989, Revenue relied upon Attorney General Opinion 057-173, which advised that Florida's Worker's Compensation Administrative Assessment should be considered a "tax" for purposes of retaliatory tax calculation. On this basis, Revenue's rule requires that such assessments be considered as "taxes" and included in the retaliatory tax calculation. However, following the issuance of Attorney General Opinion 057-173, the Florida legislature in 1959 enacted the present Subsection 624.5091(3), Florida Statutes, specifically excluding the consideration of "special purpose obligations or assessments imposed in connection with particular kinds of insurance other than property insurance" in retaliatory tax calculations. Following the 1959 enactment of the exclusionary language contained in Subsection 624.5091(3), Florida Statutes, the Department of Insurance did not include comparable worker compensation assessments of other states. The Department of Insurance administered insurance taxation until 1989. Department of Insurance forms introduced into evidence for 1986 showed that the Florida assessment, pursuant to Section 440.51 Florida Statutes, was treated as a deduction against Florida's premium tax and added back in on the Florida side of the retaliatory tax calculation. But the assessment was not included in a manner to inflate the calculation of the domiciliary state's comparative tax base. When Revenue assumed administration of insurance taxation in 1989, a proposed rule and an emergency rule were promulgated. Neither provided for inclusion of foreign states' special purpose administrative assessments in retaliatory tax calculation. In the course of the promulgation process, the determination to treat the worker compensation administrative assessment as a tax became a part of the rule. The purpose of Florida's retaliatory statute is to influence other states' legislative discretion to lower the tax burden on Florida insurers doing business in those other states. The items to be compared for retaliatory purposes are determined by the legislature and not by Revenue, Revenue auditors, or other states.
Findings Of Fact On September 16, 1981, the Circuit Court, Fourth Judicial Circuit, In And For Duval County, Florida, upon a Petition For Modification of the Final Judgment of Paternity, entered a Consent Order For Support requiring the Petitioner in this cause to pay Fifteen and No/100 Dollars ($15.00) per week as and for child support and assigning said support payments to the Respondent in this cause until such time as the child involved in the paternity suit no longer received assistance from the State of Florida. At the time Respondent caused Petitioner's Federal Income Tax Refund to be intercepted, the Petitioner was in arrears in the sum of Two Thousand Seven Hundred Ninety and 17/100 Dollars ($2,790.17) on child support payments assigned to the Respondent under the order referred to in paragraph 1 above. Petitioner's Federal Income Tax Refund in the amount of Eight Hundred Twenty Eight and No/100 Dollars ($828.00) has been intercepted and is in the possession of the Respondent.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that Respondent, Department of Health and Rehabilitative Services, enter a Final Order providing for the Petitioner's income tax refund in the amount of Eight Hundred Twenty Eight and No/100 Dollars ($828.00) be applied against his debt to the State of Florida for past due child support. Respectfully submitted and entered this 22nd day of April, 1988, in Tallahassee, Florida, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1988. COPIES FURNISHED: Gregory Alan Mitchell 439 Woodbine Street Jacksonville, Florida 32206 R. Craig Hemphill, P.A. 331 East Union Street, Suite 1 Jacksonville, Florida 32202 Frederick J. Simpson, Esquire Dept. of HRS Post Office Box 2417 Jacksonville, Florida 32231 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact The following are the facts to which the parties have stipulated: A Complaint to Determine Paternity was filed in Duval County, Florida, in May of 1984, alleging that Archie L. Atkins was the father of Jimmy Lemont Pickney. Jimmy Lemont Pickney was born on May 1, 1971, to Betty Ruth Pickney. The birth certificate of the child did not indicate the name of the father. In his Answer to Complaint, Archie L. Atkins denied any knowledge with regard to the paternity issue, and denied that he was, in fact, the father of the minor child who was thirteen years old at the time the petition was filed. A jury trial was held on the issue of paternity. At that time, Archie L. Atkins testified that although he had met Betty Ruth Pickney, he had not had sexual intercourse with her and was unaware that she had conceived a child which she claimed to be his. However, in March of 1985 the jury determined that Archie L. Atkins was, in fact, the father of Jimmy Lemont Pickney. A Final Judgment of Paternity was entered by The Honorable John S. Cox on March 21, 1985. (Copy attached) The Court reserved jurisdiction to determine the amount of child support to be paid by Archie L. Atkins and to establish a public assistance child support obligation and to tax costs. In its Order of Modification, the Court determined that the sum of $8,611.50 was the public assistance child support obligation owed by the Defendant to the State of Florida for assistance paid on behalf of the minor from October 1974 to April 1, 1985. (Copy attached) The Defendant was ordered to pay $25 per week for the support of the minor child and $5 per week toward the public assistance child support obligation. Approximately one year after the commencement of child support, it was determined that Archie L. Atkins was then in contempt due to his failure to make the payments previously ordered on April 8, 1985. Specifically, he was $897.78 behind through March 21, 1986. Mr. Atkins was ordered to pay $897.78 instantly plus $250 to be applied toward the public assistance child support obligation. (Copies attached) Mr. Atkins paid both the $897.78 and the $250 as ordered by the Court. At the same time the Court entered its Contempt Order, the Court directed that future payments be deducted from Mr. Atkins' pay check by his employer, the United States Postal Service. Archie Atkins and his wife, Richardine Atkins, overpaid their 1985 Federal Income taxes in the amount of $1,605.21 and were entitled to a refund in that amount. However, the Office of Child Support Enforcement sought to intercept that tax refund and to apply it toward the public assistance child support obligation. Mr. Atkins was notified of the interception on June 2, 1986, and requested a hearing on June 19, 1986.
Recommendation For the foregoing reasons it is recommended that the Department of Health and Rehabilitative Services enter a Final Order in this case to the effect that the Department is not entitled to intercept Archie L. Atkins' federal tax refund unless and until Atkins is delinquent in the periodic court-ordered payment, and to the further effect that any federal tax refund which may already have been intercepted shall be returned to Atkins. DONE AND ENTERED this 4th day of November, 1986, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of November, 1986. COPIES FURNISHED: R. Craig Hemphill, Esquire Assistant Counsel Child Support Enforcement Program 105 East Monroe Street Jacksonville, Florida 32202 Daniel Richardson, Esquire 1004 First Union Building Jacksonville, Florida 32202 William Page, Jr., Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue The issue in this case is whether a tax on a warranty deed is an allowable property cost, as claimed in Petitioner’s Medicaid cost report.
Findings Of Fact Venice operates Sunset Lake, a licensed nursing facility that participates in the Florida Medicaid program as an institutional provider. AHCA is the agency responsible for administering the Florida Medicaid program. On or about June 1, 2005, Venice (or an affiliate, which need not be distinguished from Venice for purposes of this proceeding) purchased the nursing facility that is now known as Sunset Lake from Bon Secours-Venice Healthcare Corporation. Venice filed its initial Medicaid cost report with AHCA for the fiscal period ending December 31, 2005. The initial Medicaid cost report for a nursing facility is used to set the per diem rates at which the Medicaid program will reimburse the facility, both retroactively for the initial period of operations, and prospectively until the next cost report is filed and used to set a new per diem rate. AHCA contracted with an outside auditing firm to audit Venice’s initial cost report. The auditing firm produced an audit report, which identified proposed adjustments to Venice’s cost report. The audit report was reviewed by AHCA analyst Steven Diaczyk before it was finalized and sent to Venice. Venice initially contested 17 adjustments in the final audit report. Before the final hearing, Venice withdrew its challenge to 16 of the 17 adjustments. The only remaining dispute to be resolved in this proceeding is whether audit adjustment number four, which disallowed $49,540.00 of costs in the category of “Property Taxes – Real Estate,” should be reduced by $12,203.80. The disallowed $12,203.80 represents one-half of the tax assessed pursuant to section 201.02, Florida Statutes (2005),1/ on the warranty deed conveying the Sunset Lake real property (including the land, land improvements, and the building) to Venice. Venice claimed one-half of the tax on its cost report because that is the amount paid by Venice; the other half was paid by the seller. Venice contends that this tax is an ad valorem tax and/or a property tax,2/ which is an allowable property cost on the Medicaid cost report. AHCA contends that the tax on the warranty deed is an excise tax, not a property tax, and, therefore, not an allowable property cost. The audit report did not explain the reason for disallowing the $12,203.80 tax, as part of the $49,540.00 adjustment. Instead, the audit report explained the entire $49,540.00 adjustment as necessary to “disallow unsupported costs,” suggesting a lack of documentation. However, no non- hearsay evidence was offered at hearing to prove that Venice failed to give the auditors sufficient documentation of the costs disallowed in adjustment number four. At least with respect to the disallowed $12,203.80 item, sufficient documentation was offered at hearing to support the cost as an actual cost incurred by Venice. The question is whether the documented cost is allowable as an ad valorem tax or property tax, as Venice claims. Documentation for the $12,203.80 tax on the warranty deed is found in the buyer/seller closing statement and on the face of the warranty deed. The closing statement sets forth the total purchase price of $7,500,000.00, which is also the amount of a mortgage loan from Bank of America. The closing statement allocates the total purchase price to the land ($477,000.00), land improvements ($496,500.00), the building ($2,513,250.00), FFE--furniture, fixtures, and equipment ($992,250.00), and personal property ($3,021,000.00). The closing statement also shows a separate category called credits and/or prorations, to appropriately account for items accruing over the calendar year. The first line item in this category is for “Ad Valorem Taxes.” If ad valorem taxes were due for calendar year 2005, they would have been prorated. However, the amount is shown to be zero. As confirmed at hearing, no ad valorem taxes were due for the Sunset Lake property in 2005, because as of January 1, 2005, the property was owned by a not-for-profit entity, making the property exempt from ad valorem taxes. The second line item in this category, for “Non-Ad Valorem Assessments,” for which there was no exemption, shows a total amount for 2005 of $8,235.29, which was prorated to credit the buyer for $3,270.65. The closing statement proration had the effect of charging the seller with its share of the assessments for the part of the year prior to closing.3/ A separate category on the closing statement addresses “Recording Fees.” The first line item in this category is for “Transfer Tax-snf [skilled nursing facility].” The taxable amount is shown as $3,486,800.00. The tax of $24,407.60 is split equally between buyer and seller, with $12,203.80 charged to each. The next line is for “Stamp Tax on mtg. [mortgage].” The taxable amount is shown as $7,500,000.00, the amount of the mortgage loan. The tax of $26,250.00 is charged to the buyer. Another line item is shown for “Intangible Tax on mtg.” Again, the taxable amount is shown as $7,500,000.00, and the tax of $15,000.00 is charged to the buyer. The top right corner of the warranty deed conveying the Sunset Lake property contains the following printed or stamped text in the space marked “(Space reserved for Clerk of Court):” RECORDED IN OFFICIAL RECORDS INSTRUMENT # 2005117710 7 PGS 2005 JUN 01 05:01 PM KAREN E. RUSHING CLERK OF THE CIRCUIT COURT SARASOTA COUNTY, FLORIDA MMARSH Receipt#635187 Doc Stamp-Deed: 24,407.60 [Bar/Scan Code with instrument number] As Venice’s representative confirmed, the reference on the face of the warranty deed to “Doc Stamp-Deed: 24,407.60,” affixed by the clerk of the court in the official records entry, means that a documentary stamp tax on the deed in the amount of $24,407.60 was paid. Because the tax was split between buyer and seller, Venice actually paid $12,203.80. Although the closing statement shows that the tax at issue was called a transfer tax and categorized as a “recording fee,” and not an “ad valorem tax,” Venice contends here that the documentary stamp tax on the deed was an ad valorem property tax, because the tax was assessed on the value of the property. As Venice summarized its position: That irrespective of whether the transfer tax is called an excise tax, a doc stamp tax or any other type of tax, the fact that it is based solely on the value of the assets makes it an ad valorem tax, which is considered by the state of Florida in all cases under Medicaid cost reporting purposes [sic] as a property tax. (AHCA Exh. 3, p. 14). AHCA disagrees. AHCA contends that the documentary stamp tax on the deed is an excise tax, assessed on the consideration for the property transferred by the deed. The parties do agree that the documentary stamp tax rate, applied to either the value of the property or the consideration for the property, was 70 cents per $100.00.4/ The parties also agree that the “property” at issue, which was conveyed by the warranty deed, includes the land, land improvements, and the building. That being the case, it appears from the closing statement that the “taxable amount” used to determine the documentary stamp tax on the deed (referred to as the “transfer tax-snf”) was the sum of the purchase price allocations for the land ($477,000.00), land improvements ($496,500.00), and the building ($2,513,250.00).5/ The documentary stamp tax on the warranty deed was based on the consideration for the property stated in the closing statement.6/ Venice asserts that the documentary stamp tax was based on the “assessed value of the property (land, land improvements and the building) [of] $3,486.750.00[.]” (Venice PRO at ¶ 24, n. 1). However, Venice offered no evidentiary support for this assertion. The amount Venice calls the “assessed value” is actually the amount of the total purchase price allocated in the closing statement to the land, land improvements, and the building. In contrast, the “assessed value” for this property in 2005, according to the Sarasota County Tax Collector’s bill, was $3,724,300.00. The documentary stamp tax on the warranty deed was not based on the assessed value of the property. Venice also contends that subsequent action by the Department of Revenue supports Venice’s position that the documentary stamp tax on the deed was based on the value of the property and not on the consideration for the property. Venice offered in evidence portions of correspondence between representatives of Venice’s parent company with the Department of Revenue in 2008 that resulted in a determination that Venice owed additional documentary stamp tax on the Sunset Lake warranty deed. According to Venice, “the Department [of Revenue] did not agree with the value of assets that Venice had reported and paid taxes on.” (Venice PRO at ¶ 32). Contrary to Venice’s characterization, the portions of correspondence with the Department of Revenue in evidence confirm that the documentary stamp tax on the Sunset Lake warranty deed was based on the consideration for the real property (i.e., the land, land improvements, and the building). The Department of Revenue sought additional information from Venice to establish what the consideration was. The Department of Revenue “Official Request for Information” form asked for “Total Consideration (Purchase/Transfer Price)” for the property conveyed by warranty deed. The form completed on Venice’s behalf reported that the consideration was $3,486,750.00--the purchase price allocation in the closing statement to the land, land improvements, and the building. Along with the completed form, a letter of explanation on Venice’s behalf (with attachments not offered in evidence) went into great detail in an attempt to justify these purchase price allocations, and ended on the following note: We are hopeful that the enclosed documentation and the foregoing explanation of the purchase price allocations will provide sufficient information for the Department to determine that the correct amount of documentary stamp taxes was paid on each of the deeds, based in each case on the agreed consideration paid for the respective real estate assets. Thus, from the evidence offered by Venice, the focus of the Department of Revenue inquiry, as well as the Venice response to the inquiry, was entirely on the consideration paid for the property. The fact that the Department of Revenue ultimately determined that Venice owed more documentary stamp taxes on the warranty deed than was paid is not evidence that the tax was assessed on the “value” of the real property, as Venice argues. Instead, the material suggests that the Department of Revenue disagreed with what Venice contended was the total consideration and/or with Venice’s allocation of the total purchase price to the real property (the land, land improvements, and the building) and to the other assets acquired in the transaction, including furniture, equipment, and personal property. Venice also takes the position that the tax on the warranty deed is an allowable cost pursuant to two provisions in the federal Provider Reimbursement Manual (PRM), which is one of the sources used to determine allowable costs. First, PRM section 2122.1 provides the “general rule” that “taxes assessed against the provider, in accordance with the levying enactments of the several States and lower levels of government and for which the provider is liable for payment, are allowable costs.” Next, PRM section 2122.2 provides in pertinent part: Certain taxes . . . which are levied on providers are not allowable costs. These taxes are: * * * C. Taxes in connection with financing, refinancing, or refunding operations, such as taxes on the issuance of bonds, property transfers, issuance or transfer of stocks, etc. Generally, these costs are either amortized over the life of the securities or depreciated over the life of the asset. They are not, however, recognized as tax expense. Venice contends that the documentary stamp tax paid on the warranty deed must be allowed because it is a tax that meets the general rule in section 2122.1, and it is not an excluded tax under section 2122.2(C). The documentary stamp tax paid by Venice on the warranty deed satisfies the general elements of section 2122.1; AHCA does not contend otherwise. Instead, AHCA contends that the documentary stamp tax must be considered an excluded tax under section 2122.2(C). AHCA is correct that the documentary stamp tax on warranty deeds transferring real property is essentially a transfer tax. However, it is not a tax in connection with financing, refinancing, or refunding operations. An example of such a tax would be the documentary stamp tax that Venice paid on the mortgage on Sunset Lake, because it was a tax in connection with the financing for the property. Venice correctly points out that, grammatically, section 2122.2(C) suggests that the only taxes excluded under that subsection are taxes in connection with financing, refinancing, or refunding operations. The use of the phrase “such as” suggests that everything that follows that phrase must be considered an example of what precedes the phrase. AHCA acknowledges that consideration of the grammatical structure of section 2122.2(C) alone would support Venice’s interpretation. However, AHCA’s expert testified, reasonably and without contradiction, that Venice’s interpretation would render the phrase “property transfers” meaningless. As AHCA’s expert explained, a tax on a property transfer is not a tax on financing, refinancing, or refunding operations. Therefore, despite the grammatical structure, taxes on property transfers must be considered a separate type of excluded tax under section 2122.2(C). As further support for this interpretation, AHCA’s expert pointed to the second sentence, providing that the excluded costs referred to in the first sentence “are either amortized over the life of the securities or depreciated over the life of the asset.” AHCA’s expert explained that taxes on financing, refinancing, or refunding operations would all be amortized, whereas taxes on property transfers would be depreciated over the life of the depreciable assets transferred (i.e., the land improvements and the building). Venice relies solely on the grammatical structure of section 2122.2(C), offering no response to AHCA’s reasoning for interpreting the subsection in a way that is contrary to the meaning suggested only by grammatical structure. Venice did not explain how a tax on property transfers could be considered a tax on financing, refinancing, or refunding operations (so as to give meaning to the phrase “property transfers”), nor did Venice explain when taxes on financing, refinancing, or refunding operations would be depreciated over the life of the asset (so as to give meaning to that phrase in the second sentence).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a Final Order disallowing $12,203.80 claimed as a property tax expense in Venice’s initial Medicaid cost report. DONE AND ENTERED this 25th day of July, 2014, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR 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 25th day of July, 2014.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: By Order of the Circuit Court of Pasco County, Florida, dated September 14, 1987, it was determined that Petitioner owed $1,560.40 in back child support payments which had been assigned to the state of Florida by the mother of the child on February 1, 1983, for assistance received by her from the state of Florida. Additionally, Petitioner was ordered to pay: (a) child support in the amount of $178.00 per month; (b) %15.00 per month on the arrearage and; (c) $5.00 per month clerk's fee for a total of $198.00 per month. Subsequent to this circuit court order, Respondent moved to intercept Petitioner's 1987 federal income tax refund, and Petitioner protested. An informal administrative hearing was held and the Respondent entered a Final Order wherein it was agreed between the parties that Petitioner owed $1,020.40 in past-due child support payments as of March 22, 1988. Although this figure of $1,020.40 cannot be reconciled with the Clerk's records in Pasco County, it is the figure agreed upon by the parties as being due as of March 22, 1988, and was used to intercept the Petitioner's 1987 federal income tax refund. On October 7, 1988, Petitioner, by order of the Circuit Court of Pasco County, Florida, was granted custody of the child for which he had been paying child support, and was no longer required to pay child support for the child. There is evidence that Petitioner had custody of the child in September 1988, but the Order states that "custody is to be upon the signing of the order". This order did not address the issue of current child support or past-due child support. Subsequent to March 22, 1988, the Petitioner was obligated to pay child support for the months of April 1988, through September 1988, for a total of $1,068.00. ( Six months at $178.00 per month). An Income Deduction Order entered by the Circuit Court of Pasco County, Florida, required Petitioner's employer to deduct $198.00 per month from Petitioner's salary and remit same to the Clerk's office for the payment ordered by the court on September 14, 1987. Respondent's employer accomplished this by rendering payment in bi-weekly amounts of $91.75. During the period from March 22, 1988, through October 7, 1988, Petitioner should be given credit for monies deducted by his employer and remitted to the Clerk's office in the net amount of $1,301.25 (Fifteen payments of $91.25 minus $75.00 Clerk's fee). Two biweekly payments remitted by Petitioner's employer during this period were improperly entered into the Clerk's record but were corrected between October 24, 1988 and November 14, 1988. The 15 payments for which Petitioner has been given credit take into consideration the 2 payments improperly entered into the Clerk's record. Respondent should be given credit for $365.60, the amount Respondent received as a result of the 1987 federal income tax refund intercept. Respondent should also be given credit for the following: (a) HLA blood test refund of $210.00 and; (b) Clerk's refund of fees of $65.00. The total amount owed by Petitioner as of October 7, 1988 was $2,088.00 ($1,020.40 arrearage as agreed by the parties and set forth in Respondent's Final Order plus $1,068.00 child support payments Petitioner was obligated to pay between March 22, 1988 and October 7, 1988) minus a credit of $1,941.85 ($1,301.25 employer payments, plus $365.60 tax intercept credit, plus $210.00 HLA credit, plus $65.00 Clerk's credit) for a net amount owed of $146.55 ($2,088.40 total amount owed after March 22, 1988 minus a total credit of $1,941.85).
Recommendation Having considered the foregoing Findings of Fact and Conlusions of Law, the evidence of record and the candor and demeanor of the witness, it is, therefore, RECOMMENDED that Respondent enter a Final Order finding that Petitioner owes the state of Florida the sum of $146.55 in past-due child support payments, and providing for Respondent to intercept Petitioner's 1988 federal income tax refund for the amount of $146.55 unless Petitioner pays this amount to the Respondent prior to the Respondent filing a federal income tax refund intercept with the Internal Revenue Service, in which case no tax refund intercept would be necessary. RESPECTFULLY submitted and entered this 28th day of March, 1989, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 28th day of March, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-0277 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. No posthearing Proposed Findings of Fact were submitted by the Petitioner. Specific Rulings on Proposed Findings of Fact Submitted by Respondent 1.-2. Adopted in Finding of Fact 1. 3.-4. Adopted in Finding of Fact 3. Subordinate to facts actually found in the Recommended Order. Adopted in Finding of Fact 2. Subordinate to facts actually found in the Recommended Order. Immaterial since the was an agreement as to the amount of arrearage owed as of March 22, 1988. Adopted in Finding of Fact 6. Adopted in Findings of Fact 7 and 8. Adopted in Finding of Fact 6. 12.-13. Subordinate to facts actually found in the Recommended Order. COPIES FURNISHED: Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Powers, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Judith Greene, Esquire CANDICE A. MURPHY, P. A. P. O. Box 4815 Clearwater Florida 34618 Roy K. Kalbach 512 12th Avenue Leisure Hills Brooksville, Florida 34610
