Findings Of Fact Ware Oil and Supply Company, Inc. (hereafter "Petitioner" or "Ware Oil"), is a wholesale and retail dealer of petroleum products. Ware Oil is a licensed dealer of special and motor fuels. Special fuels are primarily diesel and are used to operate off-highway equipment such as boats, farm tractors and industrial machinery. Beginning March 1980, the Department conducted a special fuels tax audit of the records of the Petitioner for the period January 1, 1977, through January 31, 1980. The special fuels tax audit resulted in a levy of a tax deficiency pursuant to Part II, Chapter 206, Florida Statutes. The taxes assessed together with penalty and interest are $6.868.06, with interest accruing at $1.70 per day from April 14, 1980. The assessment was based in sales of special fuels made by the Petitioner to four customers; Hoxie Brothers Circus, Jackson United Shows, Tommy Lynn and Pace's 66 Marina. The assessment relative to the sales of special fuel to Hoxie Brothers Circus and Jackson United Shows was due to the absence of a purchaser's affidavit of exemption from these customers and the Department's belief that they were dual users of special fuel due to the nature of their businesses. The assessment relative to Tommy Lynn was based on the Department's conclusion that Mr. Lynn was a dual user of special fuel and was an unlicensed dealer at the time the sales were made. The assessment relative to Pace's 66 Marina was based on Pace's resale of special fuels for which a dealer's license is required at the time of purchase. The taxes assessed by the Department are derived from the number of gallons of special fuel which was sold by the Petitioner to Hoxie Brothers Circus, Jackson United Shows, Tommy Lynn and Pace's 66 Marina, on which the $.08 per gallon tax was not collected. During 1977 Petitioner sold 550 gallons of special fuel to Hoxie Brothers Circus for purposes of generating electricity in order to operate circus rides and lights. The Petitioner did not have an exemption certificate from Hoxie relative to this sale although the sale invoice indicated that the fuel was for "off-road use". Sales tax of $.04 per gallon was collected by the Petitioner from Hoxie. No testimony or documentary evidence was produced to demonstrate that Hoxie in fact used the special fuel for an exempt purpose, that the special fuel was not placed into a receptacle connected to the fuel supply system of a motor vehicle and that the special fuel was not purchased for resale or far a dual use. In 1978, the Petitioner sold 300 gallons of special fuel to Jackson United a circus which generates its own electricity for circus rides and lights. The Petitioner has no exemption certificates for this sale; however, like Hoxie, the sales invoice has the term "off-road use" noted on its face. No testimony or documentary evidence was introduced to demonstrate that Jackson in fact used the special fuel for an exempt purpose, that the special fuel was not placed into a receptacle to the fuel supply system of a motor vehicle and that the special fuel was not purchased for resale or for a dual use. In 1977 the Petitioner sold 11,200 gallons of special fuel to Tommy Lynn. At that time Mr. Lynn was an independent logger who used all the special fuel purchased from the Petitioner for his logging equipment in the field and for off-road use. At the time of his purchases from the Petitioner, Mr. Lynn was a dual user of special fuels in that he used special fuel for both on and off road equipment. Mr. Lynn bought his off-road special fuels exclusively from the Petitioner and his on-road special fuel from another dealer. When audited by the Department, Petitioner did not have an exemption certificate for Mr. Lynn on file in its records. The Department in the past accepted exemption certificates obtained after sales were made. Mr. Lynn executed two after the fact exemption certificates. The first certificate was erroneously executed and a second drafted and signed in which Mr. Lynn stated that his purchases were for off-road use. The second certificate corroborates Mr. Lynn's direct testimony that the special fuel purchased from the Petitioner was used solely for off-road use. Neither of these certificates demonstrates that Mr. Lynn was a licensed dealer in special fuels. During 1977, 1978 and 1979 the Petitioner sold 52,484 gallons of special fuel to Pace's 66 Marina. Pace's used this special fuel for resale to users of commercial and pleasure boats and therefore, no sales tax was collected. The location of the special fuel pumps at Pace's make it virtually impossible to use the fuel for purposes other than boating. At the time of the fuel's purchase, Pace's presented an exemption certificate to the Petitioner. At that time, Pace's was not a licensed dealer of special fuels and its dealer's license number did not appear on the exemption certificate furnished to the Petitioner. Petitioner was unaware that Tommy Lynn and Pace's 66 Marina were required to be licensed as dealers and the exemption certificates provided by them should have that contained their dealer's license numbers and therefore, had no knowledge that the exemption certificates of Mr. Lynn and Pace's were incomplete. The sales were made by Petitioner in reliance on the certificates supplied by these two customer. The Department imposed the assessment against Hoxie and Jackson due to the lack of appropriate exemption certificates. The assessment was levied against Tommy Lynn and Pace's due to improperly completed exemption certificates which failed to reflect the dealer's license number. The Department did not consider whether the involved special fuels were in fact used for exempt purposes. The unrebutted testimony and documentary evidence regarding the sales to Tommy Lynn and Pace's 66 Marina supports Petitioner's position that the fuels sold to these two customers were in fact used for exempt purposes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department enter a final order upholding the tax assessment against the Petitioner, Ware Oil and Supply Company. DONE and ENTERED this 31st day of August 1981, in Tallahassee, Florida. SHARYN L. SMITH 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 31st day of August 1981. COPIES FURNISHED: Nicholas Yonclas, Esquire Akerman, Senterfitt & Eidson Post Office Box 1794 Tallahassee, Florida 32302 Jeff Kielbasa, Esquire Assistant Attorney General Department of Legal Affairs The Capitol, LLO4 Tallahassee, Florida 32301
The Issue The issue in this case is whether or not Petitioner is entitled to a refund of the bond it posted in lieu of confiscation of allegedly mislabelled gasoline products.
Findings Of Fact Petitioner, AGI Service Corporation, owns and operates a Citgo service station located at 1599 West Flagler Street in Miami, Florida. The service station sells regular unleaded, unleaded plus and unleaded premium gasoline to the public. On February 18, 1991, James Carpinelli, the Respondent's inspector, visited the station to conduct an inspection and obtain samples of the gasoline Petitioner was offering for sale to the consuming public from its tanks and related gasoline pumps. Mr. Carpinelli took samples of all three types of gasoline offered for sale by Petitioner. The samples were forwarded to the Respondent's laboratory and were tested to determine whether they met Departmental standards for each type of gasoline. The Petitioner's "premium unleaded" pump indicated the octane or Anti Knock Index of the gasoline was 93. The "regular unleaded" pump indicated that the octane level was 87. The laboratory analysis of the samples revealed that the octane level of the gasoline taken from the "premium unleaded" pump was 87.4. The octane level of the gasoline taken from the "regular unleaded" pump was 93.0. Upon discovering the discrepancy in the octane levels, the Respondent seized the gasoline and immediately allowed the Petitioner to post a bond in the amount of $1,000. Upon the posting of the bond, the product was released back to the possession of the Petitioner and was allowed to be sold after the pumps were relabelled. Petitioner acquired ownership of the service station four days prior to the time of the inspection. At the time they opened the station, the new owners labelled the pumps based upon the information provided to them by the prior owners. The new owners had limited experience in the petroleum business and followed the guidance of the prior owners regarding labelling the pumps. It is clear that the pumps were inadvertently mislabelled based upon the information provided by the prior owners. The new owners sold "premium unleaded" at the price of "regular unleaded" and visa versa. Because more "premium unleaded" was sold at the price for regular, Petitioner lost money as a result of the mislabelling. The Department seeks to assess the full amount of the bond against the Petitioner in this proceeding. Respondent calculated the number of gallons of mislabelled gasoline that was sold based upon a delivery date of February 13, 1991. Those calculations indicate that 2,498 gallons were sold at a price of $1.259 per gallon. However, Respondent's calculations appear to begin at a time prior to Petitioner's ownership of the station. No evidence was presented as to how many gallons were sold while Petitioner owned the station. In addition, it is not clear when the mislabeling was done. Thus, no clear evidence was presented as to how many mislabeled gallons were sold by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Department of Agriculture and Consumer Services enter a Final Order granting the request of the Respondent for a refund of the bond posted and that the Department rescind its assessment in this case. DONE and ENTERED this 4th day of October, 1991, at Tallahassee, Florida. J. STEPHEN MENTON 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 4th day of October, 1991. COPIES FURNISHED: LOUIS PASCALI AND DONATO PASCALI QUALIFIED REPRESENTATIVES AGI SERVICE CORPORATION 1599 WEST FLAGLER STREET MIAMI, FL 33147 JAMES R. KELLY, ESQUIRE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES ROOM 514, MAYO BUILDING TALLAHASSEE, FL 32399-0800 HONORABLE BOB CRAWFORD COMMISSIONER OF AGRICULTURE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES THE CAPITOL, PL-10 TALLAHASSEE, FL 32399-0810 RICHARD TRITSCHLER, GENERAL COUNSEL DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 515 MAYO BUILDING TALLAHASSEE, FL 32399-0800 BRENDA HYATT, CHIEF BUREAU OF LICENSING & BOND DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 508 MAYO BUILDING TALLAHASSEE, FL 32399-0800
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On September 15, 1960, Earman Oil Company, Inc., was granted License Number 1748 (the "Special Fuels Dealer's License") authorizing it to operate as a User-Dealer of special fuels in the State of Florida. On the face of that License was the following notation: This license is NOT TRANSFERRABLE but will continue in full force and effect until cancelled or revoked as provided by law. The Special Fuels Dealer's License also contained a notation that provided as follows: This license must be returned to RAY F. GREEN, Comptroller, when a licensee terminates his operation as a User-Dealer. On April 1, 1967, Earman Oil Company, Inc., was issued State License Number 375 (the "Motor Fuels Distributor's License") by the Florida Revenue Commission, authorizing Earman to engage in the business of distributing motor fuels in the State of Florida. On the face of that License was the following notation: This license is not transferrable or assignable, and must be displayed conspicuously at all times at the Distributor's office or principle place of business. A Special Fuels Dealer's License and a Motor Fuels Distributor's License entitle a holder to purchase diesel fuel and gasoline for distribution without paying local option taxes pursuant to Chapter 336, Florida Statutes, motor fuel retail sales tax pursuant to Chapter 212, Part II, Florida Statutes and motor fuels tax pursuant to Chapter 206, Part I, Florida Statutes. A holder of such licenses is obligated to collect the taxes upon resale to customers and to remit those taxes to the state. If the resale is to another distributor who holds a valid license, the sale can be made tax free provided the seller follows the procedures set forth in the statutes and applicable DOR rules. In order to obtain either of the licenses during all times pertinent to this case, a company was required to have been in operation for at least one year and had to meet certain other requirements, including the posting of a bond. Sometime in 1983, Barkett, a licensed dealer of special and motor fuels in the state of Florida, purchased Florida Coast Oil Company, Inc. ("Florida Coast"), another licensed dealer of special and motor fuels in the State of Florida. The evidence did not establish the specific terms and details of that acquisition. The licenses held by Florida Coast which enabled it to purchase motor fuels on a tax exempt basis were not cancelled or revoked following Barkett's acquisition of the company. Barkett apparently acquired all of the stock of Florida Coast and Florida Coast continued in operation under that same name. Many, if not all, of the officers and directors of Barkett at this time also became officers and directors in Florida Coast. The evidence was conflicting and confusing as to the status of Earman Oil during 1980-1984. After review of all the evidence, it is concluded that Florida Coast acquired Earman Oil Company in 1980. The evidence did not establish the specific terms and details of that transaction. Apparently, this acquisition was also a stock purchase arrangement and Earman Oil Company initially remained in existence following its acquistion by Florida Coast. However, on August 31, 1981, Earman Oil Company was officially merged into Florida Coast. Harry Barkett, the president of Barkett and Florida Coast (after its acquisition by Barkett in 1983,) testified that the Department was advised of Florida Coast's acquisition of Earman Oil Company and Florida Coast was told by DOR that it could continue to use the licenses issued to Earman Oil Company in order to purchase motor fuels on a tax exempt basis. However, it does not appear that Mr. Barkett had any interest in Florida Coast at the time of the acquisition of Earman and no explanation was provided as to how he learned of DOR's alleged approval of the continued use of Earman's licenses. This contention is discussed in more detail in Findings of Fact 24 below. On September 10, 1984, Florida Coast sold certain assets to Alfred Vittorino. Vittorino had previously worked as a manager for Barkett. The sales agreement provided that the assets being sold included ll rights to operate as Earman Oil Company including but not limited to all rights to the stock, licenses, permits or trademarks that are titled to Earman Oil Company that are required to operate the business. The parties have stipulated that on September 12, 1984, a Certificate of Incorporation for a new Earman Oil Company, Inc., was filed with the Office of the Secretary of State for Florida and that Alfred Vittorino was the president and sole stock holder for that company. The licenses issued to the original Earman Oil Company could not legally be transferred or assigned to the new company. Moreover, the new company could not qualify for new licenses on its own since it had not been in operation for at least one year. There is no dispute that at the time Vittorino acquired the assets from Florida Coast and began operating under the name Earman Oil Company, the Special Fuel Dealer's License and the Motor Fuel Distributor's License previously issued in the name of Earman Oil Company were delivered to Vittorino by Florida Coast. Harry Barkett, who was the president of both Barkett and Florida Coast at the time of the sale to Vittorino, testified that Vittorino told him that he would take whatever steps were necessary to get the licenses reissued and/or obtain new licenses so that Earman could continue to purchase fuel on a tax exempt basis. Earman Oil Company never applied for new licenses after its acquisition by Vittorino. Instead, the company merely obtained and used the old licenses. Since the Special Fuel Dealer's License and the Motor Fuel Distributor's Licenses issued to the original Earman Oil Company has never been cancelled, "Earman Oil Company" was still registered with DOR as a distributor of motor fuel and a dealer of special fuels and it remained registered during the entire period in question, September 1984 to April 1985. Although Harry Barkett testified that he believes DOR was notified of Florida Coast's sale of Earman's assets to Vittorino, DOR has no record of the sale and/or the transfer of the licenses of Earman Oil Company to Vittorino. No persuasive evidence was presented to establish that DOR was fully advised as to the terms of the sale and the status of the companies at the time of the sale. The contention that DOR approved the transfer of the licenses to the new company established by Vittorino is rejected. After Vittorino purchased the above described assets from Florida Coast, Earman Oil Company began engaging in the business of selling motor fuel and special fuels to its customers. During the period from September 1984 through April 1985, Earman Oil Company purchased gasoline and diesel fuel from Barkett and other companies and sold that fuel to, among others, Miami Petroleum Oil Company, Inc., an unlicensed distributor of gasoline and diesel fuel. During that period, the invoices for the sales by Barkett to Earman Oil Company indicated that the sales were tax exempt and there is no indication that taxes were being collected from Earman. Barkett did not obtain an affidavit or "resale" certificate from Earman Oil Co. prior to selling tax exempt. However, Barkett filed tax returns with DOR indicating that the sales were tax exempt. Barkett contends that its typical procedure for selling tax exempt to a customer is to obtain the customer's license number and verbally confirm the validity of that number with the Department. Petitioner contends that it followed this procedure prior to selling tax exempt to Earman Oil Company and that the Department confirmed that the license numbers provided by Earman Oil Company were valid. While Petitioner contends that it contacted the Respondent in order to verify that Earman Oil Company was in possession of a valid license, there is no written evidence of any such communication. The applicable statutes and regulations require a distributor to obtain an affidavit or a "resale certificate" in order to sell fuel tax exempt. There is no provision in the rules or the statutes for verbal confirmation of licensure status. From September 1984 through April 1985, Earman Oil collected motor fuel taxes under Chapters 206 and 212, Florida Statutes, from its customers, but never remitted those taxes to the state. There is no evidence that any of the taxes collected by Earman Oil were transferred to Barkett. Earman Oil Company filed tax returns with DOR indicating that it had not collected any taxes. Criminal charges were subsequently brought against Vittorino for failure to remit collected motor fuel taxes for the period September 1984 through April 1985. Vittorino was found guilty by a jury of failure to remit collected motor fuel taxes and was initially sentenced to nine years in prison, which was subsequently reduced to six years on appeal. As of the date of the hearing in this administrative proceeding, the state has not collected any of the outstanding taxes from Vittorino or Earman Oil. Petitioner contends that during the trial of Vittorino, the State of Florida maintained that Earman Oil Company held valid licenses as a distributor of motor fuel and as a dealer of special fuels during the period September 1984 through May 1985. The transcript of that criminal proceeding confirms that this was one theory advanced by the prosecution during that case. However, there was considerable confusion during that trial as to the licensure status of Earman. Ultimately, Vittorino was convicted of failure to remit collected motor fuel taxes. It was not an essential element of this offense for Earman to be a valid license holder. DOR conducted an audit of Barkett (Audit Number 86-17412886) for the period September 1984 through April 1985. The Department's audit indicated that Barkett sold 9,548,414 gallons of motor fuel on a tax free basis to Earman Oil Company during the period from September 1, 1984 through April 30, 1985. During the audit, the auditor requested Barkett to provide resale certificates or affidavits from Earman Oil Company to substantiate the basis for the tax exempt sales. Barkett was unable to produce any such resale certificates or affidavits. As a result, DOR concluded that Barkett was responsible for collecting and remitting to the state taxes on all the sales made during this period by Barkett to Earman. Barkett contested the results of the audit and the Department's Notice of Decision issued on August 4, 1988. Barkett timely petitioned for reconsideration of that decision on September 2, 1988. The Department issued its Notice of Reconsideration on January 19, 1989. In its Notice of Reconsideration, the Department determined that the balance due for the Local Option Tax pursuant to Chapter 336, Florida Statutes, was $540,173.68, which consisted of $381,936.56 tax, $95,484.14 penalty and $62,752.98 interest (with interest accruing at the rate of $125.50 per day from June 6, 1986, until date of payment.) The Department also determined that the balance due for motor fuel retail sales tax pursuant to Chapter 212, Part II, Florida Statutes, was $769,747.50, which consisted of $544,259.60 tax, $136,064.90 penalty and $89,423.00 interest (with interest accruing at the rate of $178.93 per day from June 6, 1988 until date of payment.) Finally, the Department determined that the balance due for motor fuels tax pursuant to Chapter 206, Part I, Florida Statutes, was $540,173.68, which consisted of $381,936.56 tax, $95,484.14 penalty, and $62,752.98 interest (with interest accruing at the rate of $125.57 per day from June 6, 1986 until date of payment.) 1/ As part of its reconsideration, the Department deleted the fraud penalties that had previously been assessed against Barkett. Barkett timely filed a challenge to the Department's conclusions in the Notice of Reconsideration. 2/ During the late 70's and early 1980's, Barkett Oil acquired a number of different oil companies (including Florida Coast, which had previously acquired Earman). Several of the companies that were acquired by Barkett held licenses from the Department that enabled them to purchase motor fuels on a tax exempt basis for resale. Barkett contends that it notified the Department of each of those acquisitions and was never instructed that it had to reapply for a license to purchase tax exempt. Barkett suggests that these prior experiences justified its conclusion that Earman Oil Company could continue to purchase tax exempt following the sale and transfer of licenses to Vittorino. However, the circumstances and terms of the prior acquisitions by Barkett were not established in this case. It is not clear whether those transactions were stock purchase agreements or simply the acquisition of assets. Furthermore, the evidence regarding the notification supposedly given to the Department was vague and unconvincing. Although Petitioner contends that it notified the Department that Earman Oil Company had been sold to Vittorino, there is no written evidence of any such communication. It is not clear who at the Department was notified of the sale nor is it clear what information was provided regarding the sale. In sum, Petitioner's contention that Respondent should be estopped from claiming that Earman Oil Company did not hold a valid Distributor's License and/or Special Fuel License is rejected. There was insufficient persuasive evidence to establish that an authorized representative of the Department who was provided with full disclosure of the facts surrounding the transfer to Vittorino advised Petitioner that it could sell tax exempt to Earman Oil Company.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered upholding the assessments set forth in the Notice of Reconsideration. RECOMMENDED this 10th day of February, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 10th day of February, 1992.
The Issue The issue presented for decision herein is whether or not Petitioner's Antiknock (octane) Index number of its petroleum product was below the Index number displayed on its dispensing pumps.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compile herein, I make the following relevant factual finding. Rafael Ruiz is the owner/operator of Coral Way Mobil, an automobile gasoline station, situated at 3201 Coral Way in Coral Gables, Florida. Ruiz has operated that station in excess of ten (10) years. On or about May 13, 1987, Respondent, Department of Agriculture and Consumer Services, received a customer complaint alleging that the fuel obtained from Petitioner's station made her automobile engine ping. Respondent dispatched one of its petroleum inspectors to Petitioner's station at 3201 Coral Way on May 14, and obtained a sample of Respondent's unleaded gasoline. Inspector Bill Munoz obtained the sample and an analysis of the sample revealed that the produce had an octane rating of 86.9 octane, whereas the octane rating posted on the dispenser indicated that the octane rating of the product was 89 octane. On that date, May 14, 1987, Respondent issued a "stop sale notice" for all of the unleaded product which was determined to be 213 gallons. Petitioner was advised by Inspector Munoz that the unleaded produce should be held until he received further instructions from the Respondent respecting any proposed penalty. On May 15, 1987, Petitioner was advised by John Whittier, Chief, Bureau of Petroleum Inspection, Florida Department of Agriculture and Consumer Services, that the Antiknock Index number of the sampled product was 2.1 percent below the octane rating displayed on the dispenser and that an administrative fine would be levied in the amount of $200 based on the number of gallons multiplied times by the price at which the product was being sold, i.e., 213 gallons times 93.9 cents per gallon. Petitioner did not dispute Respondent's analysis of the product sample, but instead reported that he had been advised that three of the five tanks at his station were leaking and that this is the first incident that he was aware of wherein the product tested below the octane rating displayed on the dispenser.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondent, Department of Agriculture and Consumer Services, enter a Final Order imposing an administrative fine in the amount of $200 payable by Petitioner to Respondent within thirty (30) days after entry of the Respondent's Final Order entered herein. RECOMMENDED this 7th day of October, 1987, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 7th day of October, 1987. COPIES FURNISHED: Rafael E. Ruiz c/o Coral Way Mobil 3201 Coral Way Miami, Florida 33145 Clinton H. Coulter, Jr., Esquire Senior Attorney Office of General Counsel Department of Agriculture and Consumer Services Room 514, Mayo Building Tallahassee, Florida 32399-0800 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain, Esquire General Counsel Department of Agriculture, and Consumer Services Room 513, Mayo Building Tallahassee, Florida 2399-0800
The Issue The issues in these cases are (1) whether four tax warrants issued by Petitioner against Respondent, Frances Bowers, a/k/a Francis Bowers, d/b/a Shannon Oil Company and Shannon Service Stations, were properly issued; (2) whether two Notices of Freeze and two Notices of Intent to Levy on Respondent were properly issued; (3) whether the allegations of an Administrative Complaint entered March 1, 1995 by Petitioner against Respondent are correct; and (4) whether an Emergency Order of Suspension issued by Petitioner on or about March 3, 1995 was warranted.
Findings Of Fact At all times relevant to this proceeding, Respondent, Frances Bowers, a/k/a Francis Bowers, held a Special Fuel Dealers License #10-011382, a Motor Fuel Jobbers License #09-001450 and Retail Dealer License #’s 77- 000320 and 40-001175. The motor fuel and special fuel licenses were held at Highway 90 East, Caryville, Florida 32427. The retail dealer licenses were held at 1007 North Waukesh Street, Bonifay, Florida 32425 and Highway 279 South, Caryville, Florida 32427. Ms. Bowers operated under the business names of Shannon Oil Company or Shannon Service Station. Ms. Bowers has been engaged in the sale of fuel at various retail locations since 1986. She has engaged in the sale of special fuels (diesel) since May 10, 1985. She has operated as a motor fuel jobber (gasoline) since January 18, 1989. From April 1994 through December 1994, Ms. Bowers purchased special fuel from Murphy Oil Co. From May 1994 through July 1994, Ms. Bowers purchased special fuel from Beards Oil Co. For the period July 1993 through December 1994 Ms. Bowers delivered unsigned, no-remit tax returns to Petitioner, the Department of Revenue (hereinafter referred to as the “Department”). Those returns were delivered by Ms. Bowers to Kathy Jones, a Department Revenue Specialist, at the Department’s Marianna offices. Returns for some months were not remitted. Ms. Bowers subsequently returned to the Department’s Marianna offices and signed the no-remit returns she had filed in the presence of Ms. Jones. The no-remit returns filed by Ms. Bowers indicate that she owed taxes pursuant to Chapters 206, 212, Part II and 336, Florida Statutes. No part of the tax Ms. Bowers indicated was owed was remitted by Ms. Bowers to the Department. For months for which no return was filed, the Department estimated the amount of tax owed. The Department issued Notices of Assessment and Jeopardy Finding to Ms. Bowers in January 1995. These Notices informed Ms. Bowers of the Department’s intent to cause tax warrants for the outstanding taxes owed by Ms. Bowers to be filed with the Clerk of Court. Based upon the no-remit returns, the Department filed four tax warrants. The warrants were for total taxes of $218,801,56. Additionally, penalties, filing fees and interest was included in the tax warrants. The total amount for the four warrants, without the filing fees, was $187,167.18 attributable to Shannon Service Stations and $183,548.97 attributable to Shannon Oil Company. Included in the no-remit returns filed by Ms. Bowers were Special and Alternative Fuel Tax Returns. These returns indicated that Ms. Bowers had purchased “tax-paid” special fuel, meaning that she had paid the tax at the time she purchased the fuel. The tax was allegedly paid to Murphy Oil Co. or Beard’s Oil Co. Based upon the Special Fuel Tax Returns of Murphy Oil Co. and Beard’s Oil Co. no tax was paid by Ms. Bowers on purchases of special fuel purchased by Ms. Bowers. Copies of these returns were accepted into evidence without objection from Ms. Bowers. Ms. Bowers has admitted during her deposition testimony that she owes the outstanding taxes at issue in this proceeding. See Department’s exhibit 14. On or about February 28, 1995, the Department issued two Notices of Freeze and two Notices of Intent to Levy on Frances Bowers, a/k/a Francis Bowers, d/b/a Shannon Oil Company and Shannon Service Stations. Pursuant to the Notices, the Department notified Ms. Bowers that it intended to levy against her assets, consisting of deposits at the Bank of Bonifay, for outstanding taxes. The Department indicated that it was taking this action for nonpayment of taxes, penalty and interest in the sum of $183,548.97 attributable to Shannon Oil Company and in the sum of $187,267.18 attributable to Shannon Service Stations. On or about March 20, 1995, Ms. Bowers filed a Request for Administrative Hearing with the Department. Ms. Bowers contested the proposed levy and alleged that she had not failed to pay any taxes owed. On or about March 1, 1995, the Department issued an Administrative Complaint against Ms. Bowers. Pursuant to the Administrative Complaint, the Department informed Ms. Bowers that Special Fuel Dealers License #10-011382, Motor Fuel Jobbers License #09-001450 and Retail Dealer License #’s 77-000320 and 40-001175 were being revoked. This action was premised upon allegations that Ms. Bowers “failed to file or pay fuel taxes collected for the period of July, 1993 through December, 1994”. The Department also issued an Emergency Order of Suspension on or about March 3, 1995. Pursuant to this Order, the Department suspended the licenses held by Ms. Bowers which the Department sought to revoke in the Administrative Complaint. On or about March 22, 1995, Ms. Bowers sent a Petition for Administrative hearing to the Department in response tot he Administrative Complaint. Ms. Bowers disputed in the Petition whether she had failed to remit outstanding taxes or that she owed such taxes as alleged in the Administrative Complaint. All of the exhibits and the facts of this matter were stipulated to by Ms. Bowers. Ms. Bowers also stipulated to the revocation of her licenses, the emergency suspension order issued by the Department, the issuance of the tax warrants and the Notices of Freeze and Notices of Intent to Levy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered upholding the Emergency Order of Suspension, the Department’s Administrative Complaint, the four tax warrants issued by the Department against Respondent and the Notices of Intent to Freeze and Notices of Intent to Levy. DONE and ORDERED this 25th day of February 1997, in Tallahassee, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February 1997. COPIES FURNISHED: Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Albert J. Wollermann John N. Upchurch Assistant Attorneys General Office of the Attorney General The Capitol - Tax Section Tallahassee, Florida 32399-1050 Owen N. Powell, Esquire Post Office Box 789 Bonifay, Florida 32425
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 During a routine inspection on March 30, 1983, a sample diesel fuel taken from Respondent's place of business in Clearwater, Florida, was tested and was found to have a flash point of 660F. Normal flash point for diesel fuel is 1000F. A Stop Sale Notice was issued March 30, 1983, and sales from this tank were stopped. On March 31, 1983, Respondent posted a $1,000 bond in lieu of having the fuel confiscated. Before the Stop Sale Notice, 1,282 gallons of contaminated diesel fuel had been sold from this tank at a price of $1.099 per gallon.
Findings Of Fact Prior to July 10, 1984, Son-Mar Propane, Inc. (Son-Mar) was licensed by the Department as a dealer in liquefied petroleum gas, in appliances and in equipment for use of such gas and installation. Virgil Berdeaux was the president of Son-Mar and he and his wife were the sole stockholders. Virgil Berdeaux passed the competency exam which qualified Son-Mar for licensure. Sonny Wade Berdeaux Virgil Berdeaux's son, was the manager of Son-Mar. Son- Mar's business address and place of operation was 16034 U.S. Highway 19 North in Hudson, Florida. Virgil Berdeaux and his wife owned the property located at that address and leased it to Son-Mar. A propane pumping station and a building was located on the property at 16034 U.S. Highway 19. The building housed a pawn shop and supply store for mobile home and RV equipment. Son-Mar operated the pumping station and the stores. It also installed tanks and delivered gas to customers. 1/ On July 10, 1984, a final order was entered by the Department which ordered "[t]hat any and all of [Son-Mar's] licenses issued by the State Fire Marshal Division of Liquefied Petroleum Gas and eligibility to hold said licenses are hereby revoked." The revocation of Son-Mar's licenses was due to its violation of certain safety standards and rules. Specifically, it was found that an employee of Son-Mar, Mr. John Delham, filled a cylinder that had not been recertified, that he lay it horizontally in the customer's van, and that he failed to secure the tank in the van. While the van was still parked at Son-Mar an explosion occurred which destroyed the van and killed its occupant. On July 19, 1984, nine days after Son-Mar's licenses were revoked, Virgil Berdeaux submitted an application for licensure as a dealer in appliances and equipment for use of liquefied petroleum gas, listing the business address as 16034 U.S. Highway 19, Hudson, Florida, and listing the business name as Son- Mar Pawn Shop. On August 3, 1984, twenty-four days after the revocation of Son- Mar's licenses, Sonny Wade Berdeaux submitted an application for licensure as a dealer in liquefied petroleum gas, listing the business address as 16034 U.S. Highway 19, Hudson, Florida. The Department issues several different types of liquefied petroleum gas licenses. A Type 06, Class 02 license, known as a 602 license, is issued to a dealer in appliances and equipment for use of liquefied petroleum gas. The 602 license allows the holder to sell propane appliances and equipment, such as stoves, heaters, and gas grills but it does not permit the holder to install appliances or sell propane gas. A competency examination is not required for this type of license, and there is no inspection of the place of business prior to issuance of the license. Virgil Berdeaux applied for a 602 license. He completed the application and submitted the required fee. The application listed W. C. Johnson, Virgil Berdeaux's son-in-law, as the manager of the business. Bill Johnson had run the pawn shop for Son-Mar. Sonny Wade Berdeaux applied for a Type 06, Class 04 license known as 604 license, which is issued to a dealer in liquefied petroleum gas. This type of license permits the holder to pump liquefied petroleum gas for sale to the public. An applicant for this type of license must pass a competency test and file a surety bond or certificate of insurance. Further, if the licensee has a dispensing station, an inspection of the business location must be performed to ensure that it is in compliance with all safety regulations. Sonny Wade Berdeaux passed the competency examination, filed a certificate of insurance, and submitted the proper fee. Son-Mar held a Type 06, Class 01 license (a 601 license) as a dealer in liquefied petroleum gas, in appliances and in equipment for use of such gas and installation. A 601 license permits the holder to pump liquefied petroleum gas for sale to the public, to sell appliances and equipment for use of liquefied petroleum gas, and to install such appliances and equipment. In essence, it is a combination of a 602 license, a 604 license, and a license to install equipment. Both Sonny Wade Berdeaux and Virgil Berdeaux received letters dated October 8, 1984, which informed them that their applications for licensure had been denied. Both letters referred to the revocation of Son-Mar's licenses and pointed out that the applicants would be operating on the same premises and employing the same staff as Son-Mar. Both letters concluded as follows: Thus, it would appear that your application is seeking licensure for essentially the same entity that has only recently had its liquefied petroleum gas licenses revoked. Therefore, in the interest of public safety, this Bureau cannot permit an Order of Revocation to be obviated by a mere procedural reapplication in your name. The applications for licensure both list the business address as 16034 U.S. Highway 19 in Hudson, Florida. At the time of application Virgil Berdeaux owned that property and Sonny Wade Berdeaux had leased the pumping station. However, on July 1, 1985, the property at 16034 U.S. Highway 19 was sold. The pumping station was moved out along with the inventory that remained in the pawn shop. Neither Virgil Berdeaux or Sonny Wader Berdeaux retained any interest in the property, and at this time neither could operate a business at that location. Although there was testimony concerning the manner in which the business would have been operated and controlled had licensure been granted at the time of applications there was no testimony indicating where or how the business would now be operated. There was no attempt to amend either application to reflect a current business address, and the certificate of insurance entered into evidence lists 16034 U.S. Highway 19, Hudson, Florida, as the location covered. 2/
Recommendation Based on the foregoing findings of fact and conclusions of law; it is RECOMMENDED that a Final Order be entered denying petitioners' applications for licensure. DONE and ENTERED this 21st day of May, 1986, in Tallahassee, Florida. DIANE A. GRUBBS 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 21st day of May, 1986.
The Issue The issue presented is whether Petitioners are responsible for unpaid taxes as alleged in the Notices of Final Assessment issued in this cause.
Findings Of Fact At all times material hereto, Petitioner Nana's Petroleum, Inc. (hereinafter "Nana's"), has been licensed by the Department to sell special fuel (diesel) and gasoline. At all times material hereto, Emilio Perez has been the vice president of Nana's, and Edilia Perez has been the secretary. At all times material hereto, Nana's has been required to file with the Department on a monthly basis, and Nana's did so file, Special and Alternative Fuel Tax Returns, including Local Option Tax Schedules, and Refiner, Importer and Jobber Gasoline Tax Returns. Although the Department cannot locate its copy of Nana's May 1988 return, the Department does have copies of the other returns for the six years in question. If the Department had not received the May 1988 return from Nana's, it would have sent a delinquency notice at that time, and no delinquency notice was sent to Nana's. Nana's purchased its fuel from two suppliers at Port Everglades: Belcher Oil Co., n/k/a Coastal States Refinery and Marketing, and Union Oil Co. of California under the same procedures. Nana's sent its trucks to Port Everglades. The driver used a loading card (similar to a credit card) which carried the identification number of the purchaser. The driver put the loading card in the loading rack and received a manifest, which the driver signed and dated, noting the time on it. After the truck was loaded and left the Port, an invoice was issued by the supplier, referencing the manifest and specifying the amount of fuel obtained and when, and whether the fuel was diesel or gasoline. The invoice also specified the amount and kind of taxes charged, or if the purchase was tax exempt, and provided a total purchase figure. The invoices were then sent by the suppliers to Nana's, and Nana's paid those invoices within ten days in order to obtain a 1 percent discount. Nana's kept each invoice, using each to provide the detailed information required on its monthly tax returns. Also, when the Department audits a license holder such as Nana's, the Department audits the invoices against the invoice numbers shown on the tax returns. Each Special and Alternative Fuel Tax Return filed by Nana's itemized fuel acquired or received in Florida by invoice number, the date received, the point of origin, the point of delivery, the name and license number of the supplier, and the invoiced gallonage. Nana's computed any tax due by county for local option taxes. It itemized any gallonage exempt from taxes and why. It further included an itemization of the number of gallons sold, the purchaser's name and license number, the point of delivery, and the invoice number and date. The Refiner, Importer and Jobber Gasoline Tax Returns filed by Nana's were similar and contained a detailed listing of fuel acquired or received in Florida tax paid, specifying the county of origin, the county of destination, the supplier's name and license number, the date, the invoice number, and the number of gallons. Nana's was audited by the Department in 1987, with the audit running through November of that year. As a result of that audit, Nana's hired an accountant in January of 1988 in order to assure that its books and records were properly kept. In 1992, the Department began another audit by sending an employee to the office of Nana's for one day. The Department then contacted Nana's and advised that it was too far for them to come from Ft. Pierce to the office of Nana's in Pahokee and told Nana's to bring its books and records to the Department. Nana's took boxes of records to the Ft. Pierce office. Two weeks later, the Department contacted Nana's, advising that the Department would not be completing the audit and that Nana's should come and pick up its records. In April of 1994, pursuant to a subpoena, Nana's supplied 35 or 36 boxes of records to the Department. Those boxes contained Nana's original invoices from 1987 forward and the original certificates it had obtained from its purchasers reflecting tax exempt status. On April 25, 1994, the Department issued to Edilia Perez as secretary of Nana's its Notice of Final Assessment for Fuel Tax, Penalty and Interest Due for the period of December 1987 through June 1990 in the amount of $414,714.67. That Notice of Final Assessment was accompanied by a Notice of Jeopardy Findings. On April 25, 1994, the Department issued to Emilio Perez as vice president of Nana's its Notice of Final Assessment for the period of December 1987 through June 1990 in the amount of $515,240.25. That Notice of Final Assessment was accompanied by a Notice of Jeopardy Findings. On April 25, 1994, the Department issued to Nana's its Notice of Final Assessment for the period of April 1992 through August 1993 in the total amount of $27,947.84. That total figure represented tax due in the amount of $18,083.17, interest of $2,786.23, and penalty of $7,078.44. That Notice of Final Assessment was accompanied by a Notice of Jeopardy Findings. On September 13, 1990, the Department had previously issued to Nana's its Notice of Final Assessment for the period of December 1987 through June 1990 in the total amount of $573,988.67. That total figure represented tax due of $414,714.67, penalty of $97,201.36, and interest of $62,072.64. That Notice of Final Assessment was accompanied by a Notice of Jeopardy Findings. On September 13, 1990, the Department had previously issued to Emilio Perez d/b/a Nana's Stations its Notice of Final Assessment for the period April 1988 through June 1989 in the amount of $147,291.20. That total figure represented tax due of $100,625.58, penalty of $25,156.43, and interest of $21,509.19. That Notice of Final Assessment was accompanied by a Notice of Jeopardy Findings. On May 23, 1994, an evidentiary hearing was conducted by the Circuit Court of the Fifteenth Judicial Circuit of Florida in and for Palm Beach County on a Petition for Review of the Jeopardy Findings filed by the Petitioners in this cause. In a detailed Order Reversing the Department of Revenue's Jeopardy Findings and Releasing Seizure of Assets, entered June 2, 1994, Circuit Judge Lucy Brown analyzed the deficiency of the notice given by the Department in its two groups of Jeopardy Findings and accompanying Notices of Final Assessments: the September 13, 1990, group and the April 25, 1994, group. In her factual determinations, Judge Brown determined that the Department had not provided notice as required of the Department as to its September 13, 1990, Notices of Final Assessment and Notices of Jeopardy Findings issued to Nana's and to Emilio Perez d/b/a Nana's Stations in that the Department knew at the time that Emilio Perez was the principal of Nana's and that Perez was not at the time present at the address used by the Department to serve notice on him and on Nana's, that no officer or director or employee of Nana's was shown to have received notice of the issuance of the Notices of Final Assessment and Notices of Jeopardy Findings, and that the Department made no attempt to effectuate personal service. It was further found that no notice or knowledge of the outstanding September 19, 1990, Notices of Final Assessment and of Jeopardy Findings was received prior to April 1994. After concluding that the Department did not fulfill its obligation to provide notice of its September 13, 1990, Notices of Final Assessment and Notices of Jeopardy Findings, and after concluding that the Department had not shown the existence of jeopardy upon which its April 25, 1994, Notices of Jeopardy Findings were based, Judge Brown reversed both groups of Notices of Jeopardy Findings and further set aside and vacated the Department's seizure of Petitioners' assets. The Department did not file an appeal from that Order. Accordingly, the Circuit Court determination that Petitioners were not notified that the Department was seeking additional taxes from them until April 1994 cannot be disputed herein. The Special and Alternative Fuel Tax Returns filed with the Department by Nana's for the months of February 1990 through June 1990 each declared that money was due from Nana's to the Department. The Department has no record of payment being received with each of those returns or thereafter. The Department's summary sheet itemizes the tax due with penalty and interest computed through August 1990 as follows: Nana's Petroleum 10011605 DATE TAX DUE AS REPORTED PENALTY THRU 8/19/90 INTEREST THRU 8/14/90 TOTAL DUE 2/90 26,376.57 6,594.14 1,274.75 34,245.46 3 16,459.04 3,291.81 627.70 20,378.55 4 8,287.07 1,243.06 234.31 9,764.44 5 11,339.26 1,133.93 205.04 12,678.23 6 11,822.56 591.13 97.17 12,510.86 74,284.50 12,854.07 2,438.97 89,577.54 Accordingly, Nana's is responsible for unpaid taxes in the amount of $74,284.50, together with the increasing penalty and interest until date of payment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered sustaining Petitioners' contest of the assessments issued against them but for that portion of the September 13, 1990, Notice of Final Assessment issued to Nana's encompassing the months of February 1990 through June 1990 wherein Nana's reported tax due in the total amount of $74,284.50 but failed to pay that amount to the Department, together with the statutory penalty and interest on that amount through date of payment. DONE and ENTERED this 16th day of May, 1995, at Tallahassee, Florida. LINDA M. RIGOT, 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 May, 1995. APPENDIX TO RECOMMENDED ORDER Petitioners' six un-numbered paragraphs in that portion of its proposed recommended order entitled "Factual Findings" have been adopted to the extent that they include any findings of fact which were intermingled with Petitioners' conclusions of law and argument of counsel contained within those un-numbered paragraphs. Respondent's proposed findings of fact numbered 1-6, 8, 9, 12, 21, and 34 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 7, 10, 13-18, 20, 22- 27, 29, 39-47, 49, and 50 have been rejected as not being supported by the weight of the competent evidence in this cause. Respondent's proposed finding of fact numbered 11 has been rejected as being irrelevant. Respondent's proposed findings of fact numbered 19, 28, 30-33, 35-38, and 48 have been rejected as being subordinate to the issues in this cause. COPIES FURNISHED: Andrew Helgesen, Esquire Harris, Kukey, and Helgesen 11380 Prosperity Farms Road, Suite 201 Palm Beach Gardens, Florida 33410 Dean L. Willbur, Jr., Esquire 319 Clematis Street, Suite 600 Post Office Box 6917 West Palm Beach, Florida 33405-0917 Lealand L. McCharen, Esquire Francisco M. Negron, Jr., Esquire Office of the Attorney General Capitol Building - Tax Section Tallahassee, Florida 32399-1050 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
The Issue On February 24, 1987, the Petitioner posted a bond in the amount of $844.80 in lieu of confiscation of 1600 gallons of diesel fuel that was found to be below standard. The ultimate issue in this case is whether some or all of the bond should be refunded to the Petitioner. At the hearing the Petitioner testified on his own behalf. He did not call any other witnesses and did not offer any exhibits. The Respondent presented the testimony of two witnesses and offered one composite exhibit which was received in evidence without objection. Neither party requested a transcript of the hearing and both parties waived the right to file proposed recommended orders. Several days after the hearing, the Petitioner mailed to the Hearing Officer a copy of a letter written by an employee of the Department of Agriculture and Consumer Services regarding this matter. I have not based any findings of fact on the information in that letter because it was not received in evidence at the time of the hearing
Findings Of Fact Based on the exhibits received in evidence, and on the testimony of the witnesses at hearing, I make the following findings of fact. On November 17, 1986, an employee of the Department of Agriculture and Consumer Services (hereinafter "Department") inspected various fuels offered for sale at the Mobile Service Station located at 1-75 and State Road 236. The inspection revealed that a quantity of diesel fuel offered for sale at that service station was below standards. On November 18, 1986, an employee of the Department returned to the service station described above and issued a Stop Sale Notice regarding the substandard diesel fuel, placed a seal on the pump to prevent further retail sale of the substandard diesel fuel, and took a second sample of the diesel fuel for the purpose of confirmation testing. The second sample of the diesel fuel was also found to be below standards. The service station described above is owned by the Petitioner. The Petitioner leases the station to an operator and delivers the fuel that is sold at the service station. On November 18, 1987, when the Stop Sale Notice was issued, the person on duty at the service station called Petitioner's office to advise Petitioner that the Stop Sale Notice had been issued and that the diesel pump had been sealed. Mr. Glenn Jones, the president of Petitioner, was not at the office at the time of that call, but was informed about the Stop Sale Notice within the next few days. On February 24, 1987, another representative of the Department visited the subject service station and on that day Mr. Glenn Jones signed a Department form titled Release Notice or Agreement and posted a bond in the amount of $844.80. The terms and conditions of the bond are not part of the evidence in this case. Thereupon, the Department removed the seal from the diesel pump at the subject service station and the 1600 gallons of diesel fuel were released to the Petitioner. During the period between November 18, 1986, and February 24, 1987, diesel fuel could not be sold to retail customers at the subject service station because the diesel fuel pump was sealed. This inability to sell diesel fuel to retail customers for over 90 days caused the service station to lose a substantial amount of business. In the normal course of events, within no more than one week from the time a Stop Sale Notice is issued the owner of substandard fuel can arrange to post a bond and have the seal removed from the fuel pump. It is very unusual for it to take more than 90 days as it did in this case. Several circumstances contributed to the unusual delays in this case. Among those circumstances were the fact that during the period from November 18, 1986, to February 24, 1987, both Mr. Glenn Jones and the Department employee who was supposed to follow up on this matter suffered from serious illnesses. The matter was further complicated by the fact that the fuel samples were taken by a mobile testing unit and the mobile testing unit moved on to another area shortly after the samples in this case were taken. There is no competent substantial evidence in the record of this case regarding the retail price of the substandard diesel fuel which was the subject of the Stop Sale Notice on November 18, 1986, nor is there any evidence as to the amount of such fuel, if any, that was sold to the public.
Recommendation Based on all of the foregoing, it is recommended that the Department of Agriculture and Consumer Services issue a final order in this case to the effect that the petitioner, Glenn I. Jones, Inc., is entitled to a refund of the full amount of the bond it posted on February 24, 1987, in the amount of $844.80. DONE AND ENTERED this 9th day of June, 1987, at Tallahassee, Florida. MICHAEL M. PARRISH, 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 9th day of June, 1987. COPIES FURNISHED: Mr. Glenn I. Jones Glenn I. Jones, Inc. Post Office Box 549 Lake City, Florida 32055 Harry Lewis Michaels, Esquire Senior Attorney Department of Agriculture and Consumer Services Room 513, Mayo Building Tallahassee, Florida 32399-0800 The Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Room 515, Mayo Building Tallahassee, Florida 32399-0800
