Findings Of Fact Petitioner Auto/Truck Plaza Specialists, Inc., a Florida Corporation, (formerly GHM, Inc. of Baldwin) operates a "truck stop" in Baldwin, Florida, which sells special fuel and motor fuel under a dealer's license issued by the respondent. The firm leases the buildings under an agreement with the Union Oil Company of California. Part of the rental for the leased premises consists of one cent per gallon on sales of special fuels based on monthly reports that reflect fuel inventory at the beginning of the month, gallons acquired during the month, and the amount sold during the month based on manual measurement of the storage tanks. In like manner, the required state monthly tax return is based upon gallons to be accounted for" and consists of basically the same method as used in accounting to Union Oil Company. However, in preparing bimonthly excise tax returns to the Internal Revenue Service, it is unnecessary to show the number of gallons sold, but just the dollar amount of sales. Petitioner used pump meter readings to arrive at federal tax figures computed from daily reports of station personnel who read the pump meters at the beginning and end of each of three eight-hour shifts. The daily reports are recapitulated by petitioner's bookkeepers into monthly reports that take certain adjustments into account, such as fuel that is pumped by mistake into trucks and then replaced in the tanks. The daily reports are subject to mathematical mistakes by station attendants and the meters themselves periodically become defective, thus necessitating repair or replacement. This type of report is used by petitioner also as a comparison of months to see how the business is progressing and to attempt to detect theft by employees. (Testimony of Hires, Morris, Petitioner's Exhibits 2-5) Although petitioner normally purchases all of its special fuel from Union Oil Company, there was a period from June, 1973, through February, 1974, when, due to a shortage of fuel, purchases of some 500,000 gallons were made from five other distributors. Petitioner was under the impression that it paid tax on these purchases because none of the firms asked for its license number and the price charged for the fuel appeared to be an amount sufficient to include the state tax. No taxes were separately stated on the invoices from these firms, but petitioner's license number appeared on some of them. All such purchases were made by checks drawn on petitioner's bank account. The state tax due on later resales of this special fuel was not collected or paid to the state by petitioner. Nevertheless, it is found that petitioner's explanation that it was unaware that tax had not been previously paid to distributors is credible and that there was no intent to purposely evade payment of state taxes. (Testimony of Hires) In the summer of 1976, respondent's tax examiner Heyward R. Steinhauser, learned that sales of special fuels had been made to petitioner without the payment of tax and had not been reported to his agency. Petitioner explained the situation concerning outside purchases to Steinhauser, and the latter thereafter conducted an audit of the firm's books covering the period June, 1973, through June, 1976. He examined petitioner's check register to determine how much excise tax had been paid to the federal government and determined that this amount corresponded substantially with the number of gallons sold as reflected on the monthly meter reading reports. During this audit, Steinhauser found no evidence of outside purchases except that reflected by checks issued by petitioner to the five firms during the latter half of 1973 and 1974. However, Steinhauser made no effort to verify the totals set forth on the monthly meter reports as far as accuracy of computation. Petitioner made all of its records available for the audit and offered the daily reports to Steinhauser which he declined to use due to their bulk. (Testimony of Hires, Steinhauser). An informal meeting was held between petitioner and representatives of respondent on September 28, 1976, based on a proposed assessment resulting from the audit. At this meeting, certain credits were allowed to petitioner. The meeting was followed by a formal Notice of Proposed Assessment, dated November 22, 1976, wherein respondent claimed tax due in the amount of $48,016.22, interest in the amount of $15,248.30, and penalties of $6,196.76, for a total of $69,461.01. After deducting a $10,000 payment made by petitioner on September 28, 1976, the total amount due as stated in the assessment letter was $60,316.07. This was followed by a subsequent meeting on February 2, 1977, whereby petitioner sought further adjustment of the proposed assessment. A letter of February 15, 1977, from respondent's audit supervisor of the Motor Fuel Tax Bureau reasserted the original assessment, plus additional interest making the total allegedly due, as of February 10, 1977, $61,582.00. In that letter, petitioner was advised that since the daily pump readings or reports had not been made available to reconcile any discrepancies in the monthly reports, no adjustment could be made as to the proposed assessment. The reason for the unavailability of the daily records was that they had been inadvertently destroyed by an employee of the petitioner several months after the audit. Another meeting was held on March 29, 1977, which apparently was unsuccessful because a further letter of respondent, dated March 31, 1977, again asserted the previous amount of tax due, plus additional interest, making a total due of $62,198.07. Thereafter, on April 28, 1977, petitioner filed its petition for an administrative hearing. (Testimony of Steinhauser, Hires, Morris, Petitioner's Exhibits 1, 9-10) At the hearing, petitioner submitted its own audit based on fuel purchases, its check register, and invoices from Union Oil Company and outside suppliers. After computing exempt purchases, collection fees, and taxes already paid to the state, petitioner admitted that taxes had been due in the total amount of $42,342, based on sales of 541,825 gallons of fuel. The state's figures had based tax due on 592,587 gallons sold. After deductions of the $10,000 payment made on September 28, 1976, and a further payment of $30,000 on August 11, 1977, plus penalties and interest, petitioner admits that a sum of $11,390 is still due and owing. A further audit presented by respondent at the hearing reflects a total due at the end of September, 1977, of $47,699.44. Petitioner pointed out at the hearing that various mistakes in addition had been made in the monthly meter reports utilized by respondent in arriving at its assessment. However, neither petitioner nor respondent had verified the accuracy of these figures. Accordingly, the Hearing Officer requested that this be accomplished subsequent to hearing and that a report be furnished as a late- filed exhibit. Petitioner submitted such a report on November 15, 1977, which shows that mathematical mistakes in the reports were made to the extent that they reflected 56,595.5 more gallons sold during the audit period than was actually the case. This figure corresponds favorably with petitioner's contention based on its audit that it had sold some 51,000 gallons less than that asserted by respondent. Respondent has not contested the late-filed exhibit of petitioner and it is found that the figures reflected therein are correct. (Testimony of Morris, Petitioner's Exhibits 6, 7, 11, Respondent's Exhibits 1, 2)
Recommendation That petitioner be held liable for special fuels tax, penalty and interest in the amount of $11,390. DONE and ENTERED this 29th day of November, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Linder Smith, Jr. Esquire 1320 Atlantic Bank Building Jacksonville, Florida 32202 Harold F.X. Purnell, Esquire Assistant Attorney General Department of Legal Affairs The Capital Tallahassee, Florida 32304
Findings Of Fact On January 13, 1983, an inspector from the Department of Agriculture and Consumer Services drew a sample of the gasoline in one of the pumps at the station of K & S Imports, Inc., in Fort Lauderdale, Florida, and submitted the sample for laboratory testing. This test determined that the evaporation rate for the sample was too high, having a 10 percent evaporated temperature of 155 degrees, instead of less than the allowable 140 degrees. Based on these test results, the Petitioner issued its stop-sale order to the Respondent on January 14, 1983. The tested sample came from a tank containing Cam 2 racing fuel. This is a special product distributed by Sun Oil Company, and it is not generally available to the public at gasoline stations. Cam 2 racing fuel performs well in engines designed for racing because racing cars often are pushed off in order to start the engines. However, the high evaporation rate of this fuel lessens the starting power of ordinary engines. The racing fuel tested at the Respondent's station came from a pump which was in the same location as the pumps containing other gasolines for sale to the public, and there was no obvious identification on the pump notifying purchasers that the product was a racing fuel not generally suitable for use in standard-use cars. Subsequent to the issuance of the stop-sale order, Sun Oil Company delivered another load of product, and added to the subject tank enough gasoline with a lower evaporation temperature to bring the sample at the pump down to an acceptable level. During the two to three month period prior to the issuance of the stop- sale order on January 14, 1983, the Respondent had sold 645 gallons of the Cam 2 racing fuel at a price of $3.50 per gallon. The Respondent contends that it informed the office of Consumer Services when it decided to market the Cam 2 fuel, and was advised that this fuel could be sold if the pump dispensing it was separated from other pumps, and if this pump was clearly marked to show that the fuel therein was sold as racing fuel not generally suitable for use in ordinary engines. However, there is not sufficient credible evidence to support a finding of fact that this instruction was implemented.
Recommendation From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the request of K & S Imports, Inc., for a return of the $1,000 bond posted by it to secure the release of the fuel confiscated by the Department, be DENIED. THIS RECOMMENDED ORDER ENTERED this 24 day of May, 1983, in Tallahassee, Florida. WILLIAM B. THOMAS 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 24 day of May, 1983. COPIES FURNISHED: Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Mark Klein, President K & S Imports, Inc. 3955 North Andrews Avenue Fort Lauderdale, Florida 33309 The Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
The Issue Whether or not Sohio, a subsidiary of BP Oil Company, Inc., is liable for the payment of certain local option gas taxes to the Department of Revenue under the facts of this case.
Findings Of Fact This cause was initiated by the Petition for Formal Hearing filed with the Department of Revenue on or about February 2, 1989. This petition was in response to the Department's assessment of February 29, 1988. During the period from January 1, 1986 to December 31, 1987, Petitioner Sohio made sales of gasoline to various customers including 290,698 gallons of gasoline to Enos Ying (Ying), and 634,555 gallons of gasoline to Basil Roberts (Roberts). Petitioner's sales to Ying and to Roberts occurred at their respective places of business in Broward County, Florida, which imposed a six cent per gallon local option gas tax, pursuant to Chapter 336, F.S. during 1986 and 1987. At all times material, Petitioner was licensed in the State of Florida as a "refiner". Petitioner collected motor fuel tax under Chapter 206, F.S., but did not collect or remit local option gasoline tax under Chapter 336, F.S., with regard to its sale of gasoline to Ying and to Roberts. Petitioner did not obtain resale certificates or affidavits from Ying or Roberts covering its sales to them. On November 1, 1985, the Department of Revenue published an "Important Notice to all Retail Gasoline Dealers" which stated that: Effective January 1, 1986, Sections 336.021 and 336.025, Florida Statutes, requires (sic) the Retail Gasoline Dealer to collect and remit the local option gas tax and the voted gas tax on the sale of motor or special fuel at the retail level within a county which imposes one of the above taxes. On January 17, 1986, the Department of Revenue issued an "Important Notice to Motor Fuel Wholesalers, Importers or Distributors Concerning 1986 Licenses" and a list of retail service stations licensed for 1986 as of January 10, 1986, which notice stated: Those accounts that are unlicensed in 1986 will be receiving notification concerning their account and should secure their licenses immediately in order to prevent further complications, On the reverse side of the aforesaid notice, it was stated, Those accounts that are licensed in 1986 are responsible for remitting the local option gas taxes under Chapter 336, Florida Statutes. If you sell to an unlicensed retail dealer, the wholesaler, importer or refiner is responsible for collecting and remitting the local option taxes due under Chapter 336, Florida Statutes. Evidence should be obtained from the retail dealers as to his (sic) current status with the Department prior to selling to the account on a tax-free (Chapter 336, F.S.) basis. No rules or regulations of the Respondent Department under Chapter 336, F.S. or which make specific reference to Chapter 336, F.S. were promulgated by the Department during the period in question. On February 29, 1988, the Respondent issued a notice of delinquent local option gas tax, penalty and interest due and assessed against Petitioner in the amount of $1,302,545.13 (tax of $956,420.65, penalty of $229,806.11 and interest of $116,318.37) regarding sales made by the Petitioner to its customers including Ying and Roberts. A schedule describing the items forming the basis of the assessment was enclosed therewith, which schedule described the transaction subject to the assessment as being sales made to unlicensed retail dealers. The Respondent has never pursued collection of the tax, penalty and interest at issue from either Ying or Roberts. Petitioner did not know or have reason to know whether or not Ying or Roberts had paid the tax in question. On March 17, 1988, Petitioner filed a protest with the office of the General Counsel of the Florida Department of Revenue objecting to the entire assessment on the grounds Petitioner was not liable for the local option tax in regard to the subject transactions and in the alternative, that the retail dealers involved were either listed by the Department of Revenue as being licensed or had filed returns and previously paid their tax. By letter dated April 5, 1988, Petitioner was informed by Christine F. McCann, Special Programs Analyst, Bureau of Enforcement of the Florida Department Revenue, that the above referenced assessment had been revised downward to reflect the liability of $253,260.11 (tax of $182,813.42, penalty of $45,370.91, and interest of $25,075.78) on the grounds that the Petitioner had identified certain dealers as being licensed by the Department, who were part of a transaction for which the Respondent sought to tax Petitioner. As a result of an informal conference held on May 27, 1988, a Notice of Reconsideration was issued on December 7, 1988 which further reduced the assessment against Petitioner to a total of $80,463.39 (tax of $57,769.38, interest of $8,251.61 and penalty of $14,442.40) on the grounds that the Petitioner either identified additional dealers as being licensed by the Department or demonstrated that the retail dealers though not licensed by the Department, had paid the tax in question in regard to the subject transactions. The assessment as revised by the Department's Notice of Reconsideration continues to be in error in that it yet includes certain retail dealers although not licensed and other than Ying and Roberts, who have already paid the tax in question and therefore the assessment should be revised downward further. After the above-referenced adjustment, there remains and is now in controversy in this case the following amounts: SALES TO YING SALES TO ROBERTS Tax $17,436.48 Tax $38,073.30 Penalty 4,359.13 Penalty 9,518.37 Interest to Interest to 4/20/89 4,073.15 4/20/89 9,679.30 TOTAL $25,868.76 $57,270.97 GRAND TOTAL $83,139.73 as of 4/20/89. Should the Respondent prevail in this matter, interest will continue to accrue until the tax is paid. During the course of the informal protest procedures before the Department of Revenue, Petitioner established that all the sales which were the subject of the original notice, except those to Ying and to Roberts, were either to licensed gasoline retailers or to unlicensed gasoline retailers who had collected and remitted the local option tax due. Upon the testimony of Charles (Chuck) M. Reed Jr., Retail Marketer, who has been a dealer lease and supply agent for Ying and for Roberts from Gulf BP, parent corporation of Petitioner Sohio, it is found that Sohio's customary sales both to Ying and to Roberts were made exclusively by filling underground gasoline tanks at the respective establishments of Ying and of Roberts on delivery by the truckload of no less than 7,100 gallons and no more than 8,402 gallons at a time. Also upon the basis of his testimony and the photographs he took which were admitted in evidence, it is found that Ying and Roberts made retail sales to the general motoring public. More specifically, signs posting product affiliation and prices [see Section 206.01 (7) F.S.] which were observed by Mr. Reed identified each of these establishments as retail outlets. The sales agreements between Petitioner and Ying and between Petitioner and Roberts are also clearly in support of this finding. It is also proper to infer from Mr. Reed's testimony that he watched a majority of the gasoline gallons sold to Roberts and to Ying pumped into their respective underground tanks and then observed them pumping gasoline out of those tanks into motorists' cars via the traditional hose arrangements found in commercial gasoline stations, that it was the same Sohio gasoline which was pumped and sold by Ying and Roberts at retail. It was not necessary for Mr. Reed to physically observe the gasoline coursing through the hoses or account specifically day by day from delivery in bulk by Sohio to dispensation one car gasoline tank at a time by Ying and by Roberts in light of the exclusivity clauses of their contracts with Sohio. Therefore, Sohio established that the gasoline it sold to Ying and to Roberts was resold by Ying and by Roberts to the general motoring public. Ying and Roberts therefore fall in the category of being gasoline retailers unlicensed by the Department of Revenue, of whom it is undetermined whether they submitted their county local option gas tax due and from whom Petitioner Sohio, licensed as a refiner, did not obtain resale certificates or affidavits covering Sohio's sales to them. Petitioner did not establish that Ying and Roberts had collected and remitted the local option gasoline tax in controversy. There is no statute or rule which precludes Petitioner selling to an unlicensed dealer. Respondent Department of Revenue requested that Petitioner Sohio provide information which would indicate whether Ying and Roberts had collected and remitted the local option gasoline tax. Since all of the revisions and reductions of the original assessment against Petitioner as set out above were done by the Respondent based on information supplied by the Petitioner, the Respondent anticipated that Petitioner also would be able to provide information on Ying and Roberts. Respondent could have searched its records to find out if Ying and Roberts had paid their tax, and then gone directly to Ying and Roberts to find out why they did not pay the tax, if that were the case. However, due to the agency's search system which is geared to retailer license numbers, Department of Revenue employees asserted that such a search is probably impossible and certainly is impractical. All retail gasoline dealers are required to be licensed in order to sell gasoline. Accordingly, income tax forms are mailed by the agency only to those retail dealers who have obtained a license, despite the assertion in the agency's Notice described in Finding of Fact 8 that unlicensed retailers who had paid their tax without such a number/license were traceable. The problem appears to be that Petitioner sold to persons (unlicensed retailers Ying and Roberts) who had no vehicles (respective retail license numbers) by which to submit the local option gas tax. Instead of pursuing Ying and Roberts for payment of the county local option gas tax, the agency chose to come back against Petitioner for either the certificates or affidavits specifically required with regard to collection and remittance of the state motor fuel tax under Section 206.425 F.S., or for other proof of Roberts' and Ying's compliance concerning the county local option gas tax. According to Mr. Zych, Administrator of the Disposition Section of the Office of the General Counsel and superior to Ms. McCann, the agency would have accepted properly executed retail certificates if Petitioner had gotten them. Without such proof forthcoming from Petitioner, the agency held Petitioner liable for the local option gas tax imposed by the statute upon the retailer. So far as Ms. McCann, Respondent's Special Program Analyst, was concerned, this election to proceed against Sohio was completely in the discretion of her superior. There is no rule that requires Petitioner to get an exemption certificate or affidavit before they sell to a retail dealer.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order rescinding its Notice of Assessment against Petitioner with regard to its sales to Ying and Roberts and letting Petitioner go hence without ay. DONE AND ENTERED this 16th day of June, 1989, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 16th day of June, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-0638 The following constitutes specific rulings pursuant to Section 120.59(2), Florida Statutes, upon the parties respective proposed findings of fact (PFOF): Petitioner' s PFOF: All of Petitioner's proposed findings of fact are accepted, but those not adopted have not been adopted because they are unnecessary, subordinate to the facts as found or mere legal argument. Respondent ` s PFOF: 1.-6. Accepted. 7. Accepted as modified to conform to the record and the natural inferences of the evidence of record. 8.-11. Accepted but not necessarily adopted as subordinate and unnecessary to the facts as found. 12. Accepted. 13.-15. Accepted but not necessarily adopted as subordinate and unnecessary to the facts as found. Rejected as not supported by the greater weight of the competent substantial evidence and the natural logical inferences there from. Accepted but not adopted because not dispositive of any material issue of fact in dispute in this cause. COPIES FURNISHED: Mark A. Taylor, Esquire Excise Tax Analyst Ira L Smith, Esquire Director, Ad Volorem Tax Division BP America, Inc. 200 Public Square 38-3600-L Cleveland, Ohio 44114-2375 Lealand McCharen Assistant Attorney General Department of Legal Affairs Tax Section, The Capitol Tallahassee, FL 32399-1050 William D. Townsend General Counsel Department of Revenue 203 Carlton Building Tallahassee, FL 32399-0100 Katie D. Tucker Executive Director 102 Carlton Building Tallahassee, FL 32399-0100
The Issue Whether the Department properly issued a warning letter for selling gasoline that failed to meet state standards regarding end point temperature contrary to Section 525.037, Florida Statutes.
Findings Of Fact Respondent is the state agency authorized to regulate the petroleum products (fuel) offered for sale in Florida for illuminating, heating, cooking, or power purposes. It does so by randomly sampling fuels offered for sale by vendors throughout the state to determine if the fuel meets standards set by the state pursuant to law. Petitioner operates a marina in central Florida where it offers gasoline for sale to its customers. Respondent's inspectors conducted a random sampling of Petitioner's gasoline. Subsequent testing revealed that the end point temperature of the gasoline was not in conformity with the standards for premium gasoline, the only grade sold by Petitioner. On this basis Respondent issued Petitioner a warning letter. It is undisputed that the gasoline sample failed to meet standards. The end point temperature of gasoline is not apparent from its color, smell, or appearance and can only be determined by testing in a laboratory equipped for that purpose. Petitioner has approximately 1,000 gallons of storage for gasoline and reorders when they have approximately 500 gallons on hand. The wholesaler will not hold Petitioner harmless for product that it sells. In order to assure the quality of the gasoline it sells, Petitioner would have to test each delivery. The cost to test a sample is approximately $100. This would add approximately 20 cents to the cost of each gallon sold on a 500-gallon order, and Petitioner asserts that it now loses 10 to 15 cents per gallon on the fuel it sells as a convenience to boaters at its marina. Respondent does free quality testing of gasoline for vendors as a service based upon the availability of its facilities and time. It takes at least 24 hours to test the fuel. These are unofficial, miscellaneous samples, and the results are reported to the person who provided the sample without follow up. The end point temperature of gasoline is typically altered by the addition of another type of petroleum product to the fuel being sold. This can occur at any point during the chain of delivery from the manufacturer to the ultimate vendor. While the standards of the depots have improved, contamination can and does occur there. Similarly, petroleum transporters have improved their standards, but contamination does occur by inadvertently mixing products when filling tank trucks. Lastly, contamination also occurs at the vendors where there are cases of unscrupulous vendors mixing waste oil with product to get rid of the waste oil. There is no evidence of the cause of the contamination in this case. The Department talked with the wholesaler of the gasoline that provided the gasoline to Petitioner, but that wholesaler was reticent to provide documentation for the fuel and to discuss the matter with representatives of the Department. The operation of engines with fuels that have the wrong end point can result in serious damage to a vehicular or marine engine. If Respondent finds Petitioner selling substandard fuel again, Petitioner will be liable to a fine up to $5,000. After three years, warning letters are expunged if there are no other violations, and Petitioner would receive a warning letter for another violation after three years.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That the Department should enter its final order confirming the issuance of its warning letter. DONE AND ENTERED this 12th day of November, 2004, in Tallahassee, Leon County, Florida. S STEPHEN F. DEAN 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 12th day of November, 2004. COPIES FURNISHED: David W. Young, Esquire Department of Agriculture and Consumer Services 407 South Calhoun Street Mayo Building, Suite 520 Tallahassee, Florida 32399-0800 Joseph T. Lewis Mount Dora Marina Company, Inc. 148 Charles Avenue Mount Dora, Florida 32757 Eric R. Hamilton, Chief Bureau of Petroleum Inspection Division of Standards Department of Agriculture and Consumer Services 3125 Conner Boulevard, Building 1 Tallahassee, Florida 32399-1650
The Issue The issue in this case is whether Petitioner is liable to Respondent for fuel taxes, and, if so, whether Respondent's levy on Petitioner's bank deposits is warranted and proper.
Findings Of Fact Petitioner was at all times relevant to this proceeding an active corporation in the State of Florida. Petitioner operated as a motor fuel dealer from its inception in 1984, but in 1996, its application for licensure as a motor fuel dealer was not renewed by Respondent due to the existence of fuel tax delinquencies. Respondent is the state agency responsible for collecting taxes paid by motor fuel dealers. On July 3, 1996, Respondent issued a Notice of Final Assessment and Jeopardy Finding to Petitioner indicating taxes, penalties, and interest due to Respondent in the sum of $74,423.25; a Warrant was issued in that amount and filed with the Pasco County Clerk's Office. On July 3, 1996, Respondent issued another Notice of Final Assessment and Jeopardy Finding to Petitioner indicating taxes, penalties, and interest due to Respondent in the sum of $12,625.64; a Warrant was issued in that amount and filed with the Pasco County Clerk's Office. On July 3, 1996, Respondent issued another Notice of Final Assessment and Jeopardy Finding to Petitioner indicating taxes, penalties, and interest due to Respondent in the sum of $15,245.84; a Warrant was issued in that amount and filed with the Pasco County Clerk's Office. On June 28, 1996, Respondent issued a Notice of Assessment and Jeopardy Finding to Petitioner indicating taxes, penalties, and interest due to Respondent in the sum of $90,317.87; a Warrant was issued in that amount and filed with the Pasco County Clerk's Office. On June 28, 1996, Respondent issued another Notice of Assessment and Jeopardy Finding to Petitioner indicating taxes, penalties, and interest due to Respondent in the sum of $57,864.24; a Warrant was issued in that amount and filed with the Pasco County Clerk's Office. On November 27, 1996, Respondent issued a Notice of Final Assessment and Jeopardy Finding to Petitioner indicating taxes, penalties, and interest due to Respondent in the sum of $81,094.54; a Warrant was issued in that amount and filed with the Pasco County Clerk's Office. Another Warrant was filed in the Pasco County Clerk's Office on May 24, 1996, reflecting delinquent taxes, penalties, and interest owed Respondent due to failure of an electronic transfer by Petitioner because of insufficient funds. The amount of that Warrant was $9,918.92. (A filing fee of $32.00 was assessed for each of the filed Warrants.) The time for challenging the assessments set forth in the notices and Warrants has passed. No credible evidence was presented at final hearing to suggest the assessed amounts were incorrect. Petitioner made some payments on the assessed amounts from time to time. Payments were applied to the outstanding balance in accordance with governing statutes: Filing fees, then accrued interest, then penalties, and then the tax liabilities. After applying the payments and taking into account accruing interest, Petitioner owes Respondent $377,074.29 as of the date of the final hearing. On September 13, 1996, Petitioner wrote a letter to Respondent asking that all penalties and interest on the outstanding balance be waived. The basis of the request was that only one officer of the corporation had actual knowledge of the unpaid fuel taxes. Once the other two officers were made aware, they immediately paid the current taxes and discontinued operation of the business. All assets of the business were sold, and the proceeds provided to Respondent to apply against the outstanding balance. Some revenue was being held by the corporation to provide for orderly termination of the business and upkeep of the real property owned by the corporation. Respondent denied Petitioner's request for compromise of the outstanding debt by letter dated December 19, 1996. Respondent requested from Petitioner evidence that Petitioner had exercised "ordinary care and prudence" in complying with state revenue laws. No evidence of a response by Petitioner was identified at final hearing. On August 27, 2009, Respondent, in recognition that the Warrants would expire after a period of time, notified Petitioner of the need to satisfy all the Warrants immediately. Upon Petitioner's failure to pay, Respondent issued a Notice of Freeze on October 8, 2009, to Synovus Bank where Petitioner's funds were being held. At that time there was $52,990.21 being held by the bank for Petitioner. On November 3, 2009, Respondent issued a Notice of Intent to Levy, advising Petitioner of its intent to seize the money being held at Synovus Bank. Petitioner timely filed a contest to the Notice of Intent to Levy. Respondent notified Synovus Bank of the contest. Petitioner was formed by three individuals: Earl Radcliff, president; Robert Spence; and R. Michal Marston. Spence and Marston were merely investors; Radcliff operated and controlled the business. Neither Spence, nor Marston was involved in the payment of fuel taxes during the period the business was operating. That duty was left entirely up to Radcliff. Upon Radcliff's failure to pay the taxes that were due, Respondent began issuing notices. Finally, in 1996, Respondent refused to renew Petitioner's motor fuel dealer's license, effectively terminating the business. Spence and Marston were not immediately made aware of this fact, but upon learning that the license had not been renewed, they began attempting to make the appropriate tax payments. When it became obvious there was not enough money available to pay the tax liabilities, Spence began taking steps to protect the real estate owned by Petitioner so that it could be sold to meet the tax liabilities. The funds held by Synovus Bank are being used solely to protect the existing real property. Neither Spence, nor Marston, was ever repaid for their initial investment to the corporation. The real property has not been sold due to many reasons, including the downturn in the economy, the existence of environmental problems on the site, and general deterioration of the property. The property is in two parcels: one is an empty lot and the other is being used as an automobile dealership.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Department of Revenue, upholding the Notice of Intent to Levy issued by Respondent as to property owned by Petitioner, Fuel Mart, Inc. DONE AND ENTERED this 28th day of May, 2010, in Tallahassee, Leon County, Florida. 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 28th day of May, 2010. COPIES FURNISHED: Lisa Echeverri, Executive Director Department of Revenue The Carlton Building, Room 104 501 South Calhoun Street Tallahassee, Florida 32399-0100 Marshall Stranburg, General Counsel Department of Revenue The Carlton Building, Room 204 501 South Calhoun Street Post Office Box 6668 Tallahassee, Florida 32314-6668 John Mika, Esquire Office of the Attorney General The Capitol - Tax Section Tallahassee, Florida 32399-1050 Robert Spence Fuel Mart, Inc. 250 North Belcher Road, No. 100 Clearwater, Florida 33765-2622
The Issue The issue is whether Respondent's use of the 1998 percentages to distribute the local option gas tax revenues for fiscal year ending 2001 is contrary to applicable law.
Findings Of Fact By Interlocal Agreement Between Indian River County, Florida and City of Sebastian, Florida, dated June 25, 1996 (Interlocal Agreement), Petitioner and Respondent agreed upon a distribution schedule for the county and five municipalities within the county of the local option gas tax (Gas Tax). The schedule was based on a formula weighing equally each local government's lane miles of road, transportation expenditures over the past five years, and population (Formula). The Interlocal Agreement, which expires in 2026, provides that the "[F]ormula shall be reviewed every two years starting September 1, 1998." Indian River County Code (Code) Section 209.04 also addresses the distribution of the Gas Tax. Section 209.04(a) describes the Formula and adds: "The method of distribution of the [Gas Tax] revenues shall be reviewed and a public hearing held at least every two (2) years by the parties to the agreement." However, Code Section 209.04(b) provides in part: Each year, during the term of the imposition of this tax, the division and distribution of tax proceeds under this article shall be evaluated and recalculated based upon the . . . [F]ormula: [Formula omitted]. By August 15 of each year, the county shall provide the Florida State Department of Revenue a certified copy of the distribution proportions established by interlocal agreement under this section. The revised distribution of tax proceeds shall become effective on September 1 of each year. Historically, the local governments of Indian River County may have used reporting deadlines for Gas Tax data that did not conform with the deadlines imposed by the Department of Revenue, but the local governments have since changed their reporting deadlines and eliminated any inconsistencies. However, such inconsistencies do not relieve the parties of their responsibilities under the Interlocal Agreement and Code in distributing the Gas Tax revenues. Intervenor describes the situation well in its proposed recommended order. Historically, the local governments of Indian River County did not worry about the distribution formula due to their equal, and generally low, growth rates, but disparate growth rates between Petitioner and Intervenor have eroded this easy custom. Disdaining any attempt to wring from the Code an interpretation that suits its needs, Intervenor instead contends only that it relied on the current distribution formula in preparing its current budget. Intervenor claims that it would not be good budget practice and, thus, would be contrary to the public interest, to require it to revise its budget in the middle of the year due to reduced Gas Tax revenues. As Intervenor implicitly concedes, the Code requires an annual recalculation of the distribution percentage, applying current data to the Formula and then distributing the Gas Tax revenues accordingly. Apparently, the effect of this recalculation for fiscal year ending 2001 would be to increase Petitioner's share by about $40,000, evidently largely at the expense of Intervenor. Although Intervenor's budget will be disturbed by the immediate implementation of this recalculation, the Code does not permit a contrary interpretation, and Intervenor was aware prior to adopting the current budget that Petitioner was insisting that the parties conform to the law in dividing the Gas Tax revenues. And it nearly goes without saying that the Formula is an equitable allocation of these revenues based on the respective needs of the local governments of Indian River County.
Recommendation It is RECOMMENDED that the Administration Commission enter a final order sustaining Petitioner's appeal of the distribution of the Gas Tax revenues for fiscal year ending 2001, requiring Respondent to recalculate each local government's distribution percentage in accordance with the Interlocal Agreement and Code, and providing for an equitable adjustment to Gas Tax revenues that the Department of Revenue is currently distributing to the local governments of Indian River County. DONE AND ENTERED this 16th day of November, 2001, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 16th day of November, 2001. COPIES FURNISHED: Donna Arduin, Secretary Administration Commission Executive Office of the Governor The Capitol--Suite 1601 Tallahassee, Florida 32399-0001 Rich Stringer City Attorney City of Sebastian 1225 Main Street Sebastian, Florida 32958 William G. Collins II Deputy County Attorney Indian River County 1840 25th Street Vero Beach, Florida 32960 Charles P. Vitunac Assistant City Attorney City of Vero Beach 1053 20th Place Vero Beach, Florida 32960
Findings Of Fact In a letter dated March 12, 1990, the Department informed the Petitioner, Howard Miller, that it was denying the Petitioner's request that the assessment of $2,150.00 which he had previously paid to the Department be refunded to him. In a letter received by the Department on April 12, 1990, the Petitioner requested an administrative hearing to contest the Department's decision . The address included on the Petitioner's letter was the address used by the Department to notify the Petitioner of its decision to deny his request for a refund. A Notice of Assignment and Order was issued on June 1, 1990, giving the parties an opportunity to provide the undersigned with suggested dates and a suggested place for the formal hearing. The information was to be provided within ten days of the date of the Notice. This Notice was sent by United States mail to the Petitioner at the address listed in his letter requesting a formal hearing. Neither party responded to the Notice. On July 12, 1990, a Notice of Hearing was issued setting the formal hearing for 10:00 a.m., September 11, 1990. The location of the hearing was listed in the Notice. The Notice of Hearing was sent by United States mail to the Petitioner at the address listed in his letter requesting a formal hearing. The Petitioner did not appear at the place set for the formal hearing at the date and time specified on the Notice of Hearing. The Department was present at the hearing. The Petitioner did not request a continuance of the formal hearing or notify the undersigned that he would not be able to appear at the formal hearing. After waiting fifteen minutes for the Petitioner to appear, the hearing was commenced. At the commencement of the formal hearing the Department was informed that it could proceed with the formal hearing or, since Petitioner had the burden of proof in this case, move for dismissal of the case. The Department elected to make an ore tenus motion for dismissal. The Department was informed that a Recommended Order would be issued recommending dismissal of this case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a Final Order dismissing the Petitioner's request for hearing in this case for failure to appear at the final hearing. RECOMMENDED this 18th day of October, 1990, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 18th day of October, 1990. COPIES FURNISHED: Howard Miller Route 2, Box 123 A Buffalo, MO 65622 Vernon L. Whittier, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Attn: Eleanor F. Turner, M.S. 58 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams, Esquire 562 Haydon Burns Building Tallahassee, Florida 32399-0458
The Issue Did the Respondent operate an unregistered commercial truck in Florida? Did the Petitioner correctly assess penalties of $4,101 pursuant to Section 316.545, Florida Statutes, regulating operation of commercial vehicles on a highway in the State of Florida?
Findings Of Fact On April 3, 1992, Beverly Griffin inspected and weighed two commercial vehicles owned and operated by the Respondent at the Sneads, Florida weigh station. The drivers produced the vehicles' Wisconsin apportioned registration, but the IRP permits and trip tickets were expired. The vehicles were weighed. One weighed 76,000 pounds, and the other weighed 76,020 pounds. The Respondent admitted the violation; however, the Respondent's representative indicated in his plea of mitigation that the company had obtained required permits and brought its equipment into the state on the trucks; however, it had taken longer than expected to complete the work with the machinery the trucks were carrying, and the permits had expired before the trucks and equipment could leave the state. The Department levied a fined in the amount of $4,101, at 5 cents/ pound for the overweight trucks plus $80 for new trip tickets, $90 for temporary fuel use permits, and $100 penalty for not having current fuel use permits. The Respondent paid the penalties. The statutes governing the operation of motor vehicles provide for strict liability against the owner of a vehicle.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a Final Order be entered finalizing assessment of the $4,351 in penalties against the Respondent pursuant to Section 316.545, Florida Statutes. DONE and ENTERED this 17th day of November, 1992, in Tallahassee, Florida. STEPHEN F. DEAN, 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 17th day of November, 1992. COPIES FURNISHED: Vernon L. Whittier, Jr., Esquire Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458 Gary Pomeroy, Vice President The Big Red Machinery Movers, Inc. Post Office Box 274 Butler, WI 53007 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458
Findings Of Fact The Petitioner is licensed as a dealer of special fuel pursuant to Florida Statutes 206 and has been assigned license Number 1627. The pertinent sections of Florida Statutes which are applicable to this case are ss206.86(1), (6), (8), 206.87, 206.89, 206.93, 206.94 and Ch. 212. The pertinent rules of the Department of Revenue applicable to special fuels sales involved herein is 12A-2.03. The deposition of Albert Colozoff and all answers to interrogatories and responses to requests for admissions are admissible as evidence and are to be made a part of the record in this cause. The Petitioner sold special fuels to Zamora Truck and Car Services, Roberts Equipment Company and Florida Petroleum, Inc. Petitioner was assessed by the Respondent for tax on 1,979,201 gallons of special fuel sold by it and paid tax and interest as set forth in the letter attached hereto as Exhibit A. That no penalty paid on any of the tax paid pursuant to that letter. That Petitioner did not remit taxes that were due during the month the sales of special fuel were reported on any of the sale to Zamora, Roberts or Florida Petroleum or the remaining 1,417,263 gallons sold. Zamora and Roberts represented to Belcher that they were purchasing all special fuel from Belcher for exempt agricultural use. Due to past dealings and delivery of the special fuel to a farm, Belcher believed and relied upon the facts represented to it by Zamora and Roberts. However, Belcher did not obtain written documentation of this agricultural use from Zamora or Roberts and did not furnish the Department with any such written documentation. Belcher did not obtain resale certificates or exemption certificates or dealer license numbers from Zamora, Roberts or Florida Petroleum. Nor did the report forms filed by Belcher contain resale certificates, exemption certificates or dealer license numbers from Zamora, Roberts or Florida Petroleum. An employee of the Department advised Belcher that Zamora and Roberts were under investigation for fraudulent failure to report taxes. Belcher paid sales tax on sales of special fuel in the amount of $18,589.53 on the sale of 538,030 gallons of special fuel. Zamora is not a licensed dealer of special fuels. Florida Petroleum is not a licensed dealer of special fuel. Roberts is not a licensed dealer of special fuel. Belcher did not fraudulently file incorrect monthly special fuels reports. The Department of Revenue audited Belcher and computed tax, penalty and interest due as set forth in the documents attached hereto as Exhibit B. The Department of Revenue advised Belcher of its duties regarding reporting requirements in the letters from L. N. Thomas attached as Exhibit C.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is, RECOMMENDED: That Respondent's assessment be upheld with respect to Petitioner's tax deficiency, penalty and interest as set forth in the assessments with adjustments to be made for payments paid by Petitioner under the "sales tax" theory. DONE and ORDERED this 30th day of April, 1979, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building Mail: 530 Carlton Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: James R. McCachren, Jr., Esquire Ervin, Varn, Jacobs, Odom & Kitchen Post Office Box 1170 Tallahassee, Florida 32302 William D. Townsend, Esquire Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32301
Findings Of Fact Petitioner Schooley Cadillac, Inc. is a dealer in Cadillac automobiles in West Palm Beach, Florida. The firm requires its salesmen to purchase a new Cadillac automobile each year. When a salesman decides to acquire the new automobile, an order is placed with the Cadillac Motor Car Division and delivery is made some eight to ten weeks thereafter. During the interim period, the salesman's used automobile is placed in petitioner's used car department and sold to a customer. State sales tax is collected by petitioner and remitted to respondent based on sales of the used cars. Title to the used car is transferred from the salesman to petitioner at the time it is resold. Although there is no contract or purchase agreement executed between the salesman and petitioner for the purchase of the new automobile, he is credited with the sale price of the used car on the books of the petitioner at the time the used car is sold. When the salesman's new car arrives, an invoice is prepared that reflects the amount credited to the salesman for the used car on the purchase price of the new car as a "previous trade." State sales tax is collected by petitioner and paid to the state on the price of the new automobile, less the amount credited for the used automobile. Petitioner handles a lesser number of transactions for General Motors retirees and a few winter residents using basically the same procedures involving purchases of new automobiles and prior sale of the individual's used car. In such cases, however, title to the used car is normally transferred to petitioner prior to its sale. (Testimony of Eichhorn) Respondent's tax examiner examined the books of petitioner in 1977 and determined that credit should not have been allowed for the price of the used automobiles in determining the amount of sales tax payable to the state because he viewed the amounts credited for the used automobiles as "down payments" rather than "trade-ins." Based upon 33 such transactions which took place between May 1, 1974 through April 30, 1977, a Notice of Proposed Assessment was prepared and sent to petitioner on August 2, 1977, in which delinquent sales tax in the amount of $9,814.44 was claimed, together with a penalty in the amount of $2,367.19, and interest through June 23, 1977, in the amount of $1,703.79, for a total assessment of $13,885.39. A prior Notice of Proposed Assessment in a somewhat larger amount had been scaled down after certain credits had been allowed to the petitioner. The 33 transactions in question involved 24 sales to petitioner's salesmen and the remainder to General Motors retirees or regular customers. As a result of the proposed assessment, petitioner filed its petition for an Administrative Hearing in the matter. At the hearing, petitioner conceded that tax was payable on three of the transactions in which used vehicles were not sold by the petitioner. These three transactions involved the purchase of new automobiles for the price of $7,500 and $5,200 respectively, and the purchase of a motorcycle for $375, thus making a total of $13,075 upon which petitioner acknowledges sales tax in the amount of 4 percent is due. Such tax amounts to $523, plus applicable interest and penalties thereon. (Testimony of Eichhorn, Elliot, Exhibits 1-2)
Recommendation That petitioner Schooley Cadillac, Inc. be held liable for sales tax under Chapter 212, Florida Statutes, in the amount of $523, plus an appropriate amount for penalty and interest thereon. Done and Entered this 7th day of December, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Robert W. Jensen and James Adams, Esquires 186 Southeast 13th Street Miami, Florida 33130 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
