The Issue The issue in this case is whether Petitioner is liable for certain taxes and, if so, how much.
Findings Of Fact Petitioner is a Florida corporation with its principal place of business in Manatee County, Florida. Petitioner is in the printing business. Specifically, Petitioner produces, manufactures, assembles, and publishes telephone directories for mobile home parks in Florida. All of Petitioner's work in connection with these directories takes place in Florida. The directories list the names, addresses, and telephone numbers of residents of the mobile home park for which the directory is prepared. The directories also contain advertisements, which Petitioner solicits from merchants seeking to sell goods or services to the mobile home park residents. Following the production of the directories, Petitioner distributes them to the mobile home park residents, who maintain possession of the directories. However, Petitioner retains ownership of each directory, even after it is distributed. Petitioner is solely responsible for the manufacture and distribution of the directories. Petitioner owns accounts receivable reflecting monies owned it by entities for which Petitioner has performed work. Petitioner owns treasury stock. Following an audit, Respondent issued its Intent to Make Sales and Use Tax Audit Changes. The proposed changes assessed additional sales and use taxes of $44,151.77, intangible tax of $1297.08, and $194,75 of health care tax. The bases of proposed liability for the sales and use tax were for the publication and distribution of directories for which no sales or use tax had been collected and for the sale of advertising during the period of the service tax from July 1, 1986, through December 31, 1986, for which no sales tax on advertising had been collected. The basis of proposed liability for the intangible tax was for the failure to pay intangible tax on accounts receivable and treasury stock. The basis of proposed liability for the health care tax was for the failure to pay the Hillsborough County Health Care Tax and Discretionary Sales Surtax. On February 11, 1991, Petitioner protested the proposed assessments. On April 24, 1992, Respondent issued its Notice of Decision sustaining the proposed sales and use tax and intangible tax, but eliminating the proposed health care tax. On May 12, 1992, Petitioner filed a Petition for Reconsideration concerning the proposed sales and use tax. On November 24, 1992, Respondent issued its Notice of Reconsideration sustaining the proposed sales and use tax. On January 21, 1993, Petitioner timely filed its petition for a formal administration hearing. Subject to the accuracy of its legal position, Respondent's assessment is factually accurate. Petitioner will pay the assessed amount of sales and use tax, plus interest, if its position is not sustained following the conclusion of this proceeding, including judicial review.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered determining that, for each assessed period, Petitioner is liable for the assessed corporate intangible tax plus interest, the use tax on the cost price of the materials and other covered items plus interest, the sales tax on services on the advertising revenues, but not for any sales tax apart from the period covered by the sales tax on services. ENTERED on January 25, 1994, in Tallahassee, Florida. ROBERT E. MEALE 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 on January 25, 1994. COPIES FURNISHED: David M. Carr David Michael Carr, P.A. 600 East Madison Street Tampa, Florida 33602 Eric J. Taylor Assistant Attorney General Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 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 32399-0100
Findings Of Fact 1. After an audit, the Department issued a Notice of Proposed Assessment (‘NOPA’) to Dever, Inc. (“Dever”) on April 7, 2009, finding Dever liable for additional documentary stamp taxes, plus interest. 2. Dever informally protested the Department’s NOPA as permitted by Department rules, and the Department issued a Notice of Decision on March 25, 2010, and, subsequently, a Notice of Reconsideration on July 23, 2010. The Notice of Reconsideration set forth the Department's final position regarding. the documentary stamp taxes assessed against Dever. Filed November 1, 2011 4:14 PM Division of Administrative Hearings © 3. The Notice of Reconsideration included a section titled “Taxpayer Appeal Rights,” which explained that the Notice of Reconsideration constituted the final decision of the department, prior to court action or administrative proceedings, and that, pursuant to Section 72.011, Florida Statutes, no court action or administrative proceeding could be brought to contest the assessment after sixty (60) days from the date of the assessment. This section further stated, in regard to any request for administrative hearing, Pursuant to Sections 72.011, 120.569, 120.57, and 120.80(14), F.S., and Rule Chapter 12-6, F.A.C., you may contest the assessment in an administrative forum by filing a _ petition for a Chapter_120 administrative hearing with the Department of Revenue, Office of General Counsel, Post Office Box 6668, Tallahassee, FL 32314-6668. THE PETITION MUST BE RECEIVED BY THE DEPARTMENT WITHIN SIXTY (60) DAYS OF THE DATE OF THIS NOTICE OF RECONSIDERATION. . . . The requirements of Section 72.011(2) and (3)(a), F.S., are jurisdictional for any action contesting an assessment or refund denial under Chapter 120, F.S. See id. at 5. (capitalization in original). 4. Dever did not file a petition or court action within 60 days of the July 23, 2010, Notice of Reconsideration, to contest the tax assessment. On or about January 18, 2011, the Department issued a Notice of Intent to Levy (“Intent to Levy”) on certain bank accounts held by Dever. 5. On or about January 21, 2011, Dever filed a one-page letter with the Department stating that it was “a petition/request for an administrative hearing.” This petition was dismissed, with leave to amend, for failure to comply with Chapter 120, Florida Statutes, and Rule 28-106.201, Florida Administrative Code. O 6. On March 23, 2011, Dever filed its “Amended Petition For Reconsideration” (“Petition”), which resulted in the instant proceeding. The Petition, however, did not dispute any material facts regarding the Department's Intent to Levy. Neither did the Petition provide any legal basis to contest the levy. Instead, the Petition sought to challenge the underlying basis for the assessment of the documentary stamp taxes, as set forth in the Notice of Reconsideration. 7. The Department, pursuant to Rule 28-106.204, Florida Administrative Code, moved for entry of an order relinquishing jurisdiction back to the Department for entry of a final order of dismissal. The Department asserted that the Division was " without jurisdiction over the matter. Dever did not file a response in opposition. The Division entered an order on August 29, 2011, granting the Department’s Motion to Dismiss, and it relinquished jurisdiction back to the Department. 8. Dever did not file any exceptions or otherwise challenge the order of the Division.
Conclusions This cause came before the State of Florida, Department of Revenue ("Department"), for the purpose of issuing a final order.
Other Judicial Opinions Any party who is adversely affected by this final order has the right to seek judicial review of the order under section 120.68, Florida Statutes, by filing a notice of appeal under Rule 9.190 of the Florida Rules of Appellate Procedure with the Agency Clerk of the Department of Revenue in the Office of the General Counsel, Post Office Box 6668, Tallahassee, Florida 32314-6668 [FAX (850) 488-7112], AND by filing a copy of the notice of appeal accompanied by the applicable filing fees with the District Court of Appeal, First District or with the District Court of Appeal in the appellate district where the party resides. The notice of appeal must be filed within 30 days from the date this order is filed with the clerk of the Department. C) NY COPIES FURNISHED : Hon. Diane Cleavinger Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Timothy E. Dennis, Esquire Office of the Attorney General The Capital, Plaza Level 01 400 South Monroe Street Tallahassee, Florida 32399-1050
Recommendation Based upon the foregoing, it is RECOMMENDED: That Vogue be obligated to pay the interest assessed on the corporation for failure to timely pay the corporate intangible property tax due for 1987 and 1988. That Vogue's penalty assessment be reduced by $200.00 as a compromise of assessment penalties due to the circumstances surrounding the corporation's late reporting. This reduction reflects the removal of the late reporting penalty by $100.00 for each year. That Vogue not be required to pay the $22.00 filing fee for the warrant that was filed by the Department, without statutory authority to do so, the Public Records of Collier County. Any other costs surrounding the warrant, including its removal from the public records, should not be borne by the Petitioner. DONE and ENTERED this 16th day of July, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY 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 July, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-5744 The Respondent's proposed findings of fact are addressed as follows: Admitted. See HO #1 and #2. Rejected. See HO #3 and #4. Accepted. See HO #4. Rejected. Irrelevant in these proceedings. Copies furnished: William H. Kaverman, Qualified Representative 3115 Gulfshore Boulevard North Apartment #709 Naples, Florida 33940 Vern D. Calloway, Jr., Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32399 Lealand L. McCharen, Esquire Assistant Attorney General Tax Section, Capitol Building Tallahassee, Florida 32399-1050 William D. Moore, Esquire General Counsel Department of Revenue 203 Carlton Building Tallahassee, Florida 32399 J. Thomas Herndon Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-1000
Findings Of Fact On January 22, 1986, American Aviation Resources, Inc., sold an airplane to Munur Yurtsever, a resident of Brazil. This aircraft was a Hansa jet model HFB-320 with U.S. registration number N71DL (the subject aircraft). On January 28, 1986, Mr. Yurtsever transferred title of the subject aircraft to Petitioner, Selcuk Yetimoglu. At the time of the transfer, the subject aircraft was in the State of Florida undergoing repairs. At all times pertinent to this proceeding, Mr. Yetimoglu resided at 20530 Jacaranda Road, Cutler Ridge, Miami, Florida, in a residence owned by Mr. Yurtsever. The aircraft bill of sale dated January 28, 1986, reflects that Mr. Yetimoglu was the purchaser of the subject aircraft and that Mr. Yurtsever was the seller. The bill of sale recited that the consideration paid was $20.00 and other good and valuable consideration. While the bill of sale reflects that Mr. Yetimoglu resided in Miami, Florida, the bill of sale does not state that the sale occurred in the State of Florida. On January 29, 1986, Mr. Yetimoglu applied to the U.S. Federal Aviation Administration (FAA) for the registration of the subject aircraft in his name. On March 13, 1986, Mr. Yetimoglu wrote to the FAA regarding the registration and stated, in pertinent part, as follows: Mr. Munur Yurtsever sold the aircraft to me on January 28, 1986, five days after he bought the aircraft from American Aviation Resources, Inc. when he found out that the government of Brazil did not give him a (sic) permission to import the aircraft and that he could not register the aircraft in the United States because he was not a citizen of the United States. By letter dated May 15, 1986, Mr. Yetimoglu provided the FAA proof that the subject aircraft had not been registered in Brazil. Mr. Yetimoglu was the record owner of the subject aircraft between January 28, 1986, and March 13, 1987. On March 13, 1987, Mr. Yetimoglu sold the subject aircraft back to Mr. Yurtsever. The bill of sale identifies the purchaser as being: Munur Yurtsever Rico Taxi Aereo Ltda. Av. Mal. Camara 160-GR. Rio de Janeiro - RJ Brazil On April 8, 1987, Mr. Yetimoglu wrote the FAA and stated, in pertinent part: ... I request cancelation of U.S. registra- tion for the aircraft ... because I sold the aircraft back to Rico Taxi Aereo Ltda. ... On January 11, 1988, Respondent issued to Petitioner a "Notice of Delinquent Tax Penalty and Interest Due and Assessed" (Notice of Assessment) based on the transaction involving Mr. Yetimoglu, Mr. Yurtsever, and the subject aircraft. The Notice of Assessment contained the following statement: "This Department has information that you purchased the following aircraft. However, there is no evidence of payment of Florida Sales and/or Use Tax". The Notice of Assessment reflected that Respondent had, pursuant to Section 212.12(5)(b), Florida Statutes, estimated the value of the aircraft as being $320,000 and assessed the following taxes, interest, and penalties: Florida State Sales/Use Tax 5% $16,000.00 (Estimated) Per 212.06(8), F.S. Penalty 5% per month; Maximum 25% of 4,000.00 (25%) Tax Due Per Section 212.12(2), F.S. Additional Penalty 11,840.00 (50%) Per 212.12(2)(a), F.S. Interest = 1% per month from date of 3,680.00 (23%) Purchase To Date of Payment Per Section 212.12(3), F.S. Less Tax Paid ----------------- TOTAL DUE WITH THIS NOTICE $35,520.00 Respondent requested that Mr. Yetimoglu provide it information and documentation as to the value of the aircraft. Mr. Yetimoglu contends that he paid Mr. Yurtsever nothing for the aircraft, that the title was transferred to him and registered in the FAA in his name so that the aircraft could be test flown after it was repaired, and that Mr. Yurtsever had paid $100,000 for the aircraft. There was no evidence as to the sales price that Mr. Yetimoglu paid for the aircraft other than Mr. Yetimoglu's testimony. Respondent estimated that the reasonable value of the subject aircraft on January 28, 1986, was $320,000. This estimate was based on an appraisal prepared for Respondent and assumed that the aircraft was in a scrapped or junked condition. Respondent generally uses a standard reference work on the value of aircraft to assist it in estimating the value of the subject aircraft. Because of its age and model, the subject aircraft is no longer listed in this standard reference. In support of his contention that Mr. Yurtsever paid $100,000 for the aircraft, Mr. Yetimoglu provided Respondent with a copy of a wire transfer of funds from Mr. Yurtsever to American Aviation Resources, Inc. in the amount of $100,000. However, there was no documentation provided that established that the $100,000 constituted the entire purchase price paid by Mr. Yurtsever. The dispute between the parties as to the value of the aircraft is resolved by finding, based on the greater weight of the evidence, that the reasonable value of the aircraft at the times pertinent to this proceeding was $320,000.00. In December 1986, while Mr. Yetimoglu was the record owner, the subject aircraft engaged in international flight between the Turks and Caicos Islands and the State of Florida. Respondent's Notice of Redetermination, dated February 26, 1990, upheld the Notice of Assessment on the basis that the underlying transaction was subject to use tax pursuant to Section 212.06(8), Florida Statutes. The issue to be resolved was framed by the Notice of Redetermination as being: "The only issue involved pertains to a use tax assessment upon an aircraft brought into this country". This determination was based, in part, upon a letter to Respondent from an attorney who was representing Mr. Yetimoglu at the time the letter was written. 1/ The letter implied that the aircraft was brought into Florida after the title was transferred to Mr. Yetimoglu, and provided, in pertinent part, as follows: The transferor of the aircraft, Munur Yurtsever, is a nonresident alien. His inten- tion is to deliver the plane to a purchaser outside the country. Mr. Yurtsever advises that the F.A.A. will not allow the plane to be flown in this country unless it is owned by a U.S. resident. As it was imperative to fly the plane here in order to prepare it for its flight outside the country, Mr. Yurtsever transferred the plane to his partner, Selcuk Yetimoglu, who is a resident of the United States. ... At the formal hearing, Mr. Yetimoglu established that the aircraft was in Florida undergoing repairs at the time the title was transferred to him. Prior to and at the formal hearing, Respondent asserted the position that use taxes, interest, and penalties were due for this transaction. In its post- hearing submittal, Respondent, for the first time in this proceeding, contends that sales taxes, interest and penalties are due for this transaction.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which withdraws the subject assessment. RECOMMENDED in Tallahassee, Leon County, Florida, this 11th day of March, 1991. CLAUDE B. ARRINGTON 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 11th day of March, 1991.
Findings Of Fact The Petitioner, Integra Corporation, had a dispute with the Florida Department of Revenue with respect to sales or use tax allegedly due in the amount of $605,305.70 on lease payments made on its rental of hotels from their owners. An assessment for taxes due was processed in the normal manner by the Department of Revenue. Integra Corporation filed a Protest of the assessment, and after the Department's Notice of Decision denied the Protest, Integra filed a timely Petition for Reconsideration. Ultimately the Department issued a Notice of Reconsideration which rejected the arguments of Integra Corporation. Integra Corporation agrees that the Notice of Reconsideration was transmitted on April 24, 1990, for it alleges that fact in paragraph 3 of its Petition. The Department's final rejection of the arguments made by Integra Corporation against the assessment of sales and use tax made in the Notice of Reconsideration dated April 24, 1990, prompted Integra Corporation to mail by certified mail, return receipt #P796 304 819, to the Division of Administrative Hearings on June 21, 1990, an original Petition challenging the Department's tax assessment. That petition was captioned Integra Corporation, Petitioner v. Department of Revenue, Respondent, and was filed by the Clerk of the Division of Administrative Hearings on June 25, 1990. No copy of the original Petition was served on the Department of Revenue, or its counsel. The opening paragraph states that Integra Corporation "hereby petitions the Department of Revenue for administrative proceedings. . ." The Clerk of the Division of Administrative Hearings realized that the Petition should not have been addressed to or filed with the Division of Administrative Hearings, and on that same day forwarded the Petition to the appropriate agency, the Department of Revenue, which received the Petition on June 27, 1990.
Recommendation It is RECOMMENDED that the petition filed by Integra Corporation be dismissed as untimely. DONE and ENTERED this 10th day of September, 1990, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. 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 September, 1990.
The Issue The issues in this bid protest are, first, whether, as Petitioner alleges, Intervenor's failure to attach copies of "occupational licenses" to its proposal was a deviation from the requirements of the Request for Proposal; second, whether any such deviation was material; and third, whether Respondent's preliminary decision to award Intervenor the contract at issue was clearly erroneous, arbitrary or capricious, or contrary to competition.
Findings Of Fact On September 18, 2009, Respondent Department of Transportation ("Department") issued Request for Proposal No. RFP-DOT-09/10-4007FS (the "RFP"). Through the RFP, which is entitled, "Treasure Coast Road Ranger Service Patrol," the Department solicited written proposals from qualified providers who would be willing and able to perform towing and emergency roadside services on Interstate 95 in Martin County, St. Lucie County, and Indian River County. The Department intended to award a three-year contract to the "responsive and responsible Proposer whose proposal is determined to be the most advantageous to the Department." The Department anticipated that the contract would have a term beginning on December 1, 2009, and ending on November 31, 2012. The annual contract price was not to exceed $1.59 million. Proposals were due on October 13, 2009. Four firms timely submitted proposals in response to the RFP, including Petitioner Sunshine Towing @ Broward, Inc. ("Sunshine") and Intervenor Anchor Towing and Marine of Broward, Inc. ("Anchor"). An evaluation ensued, pursuant to a process described in the RFP, during which the Department rejected two of the four proposals for failing to meet minimum requirements relating to technical aspects of the project. As a result, Sunshine and Anchor emerged as the only competitors eligible for the award. Sunshine offered to perform the contractual services for an annual price of $1,531,548. This sum was less than the price that Anchor proposed by $46,980 per year. Despite Sunshine's lower cost, Anchor nevertheless edged Sunshine in the final score, receiving 92.86 points (out of 100) from the Department's evaluators, to Sunshine's 87.75. On November 30, 2009, the Department duly notified the public of its intent to award the contract to Anchor. Sunshine promptly initiated the instant protest, whereby Sunshine seeks to have Anchor's proposal disqualified as nonresponsive, in hopes that the Department will then award the contract to Sunshine as the highest-ranked (indeed the sole) responsive proposer. Sunshine alleges that Anchor's proposal failed to conform strictly to the specifications of the RFP, principally because Anchor did not attach copies of its "occupational licenses" to the proposal. Anchor insists that its proposal was responsive but argues, alternatively, that if its proposal deviated from the specifications, the deviation was merely a minor irregularity which the Department could waive. Anchor further contends that Sunshine's proposal contains material deviations for which it should be deemed nonresponsive. The Department takes the position that Anchor's failure to attach "occupational licenses" was a minor irregularity that could be (and was) waived.1 The RFP includes a "Special Conditions" section wherein the specifications at the heart of this dispute are located. Of particular interest is Special Condition No. 8, which specifies the qualifications a provider must have to be considered qualified to perform the services called for under the contract to be awarded. Special Condition No. 8 provides as follows: QUALIFICATIONS General The Department will determine whether the Proposer is qualified to perform the services being contracted based upon their proposal demonstrating satisfactory experience and capability in the work area. The Proposer shall identify necessary experienced personnel and facilities to support the activities associated with this proposal. Qualifications of Key Personnel Those individuals who will be directly involved in the project should have demonstrated experience in the areas delineated in the scope of work. Individuals whose qualifications are presented will be committed to the project for its duration unless otherwise excepted by the Department's Project Manager. Where State of Florida registration or certification is deemed appropriate, a copy of the registration or certificate should be included in the proposal package. Authorized To Do Business in the State of Florida In accordance with sections 607.1501, 608.501, and 620.169, Florida Statutes, foreign corporations, foreign limited liability companies, and foreign limited partnerships must be authorized to do business in the State of Florida. Such authorization should be obtained by the proposal due date and time, but in any case, must be obtained prior to the posting of the intended award of the contact. For authorization, [contact the Florida Department of State].[2] Licensed to Conduct Business in the State of Florida If the business being provided requires that individuals be licensed by the Department of Business and Professional Regulation, such licenses should be obtained by the proposal due date and time, but in any case, must be obtained prior to the posting of the intended award of the contract. For licensing, [contact the Florida Department of Business and Professional Regulation]. References and experience must entail a minimum of three (3) years of experience in the towing industry in Florida. NOTE: Copies of occupational licenses must also be attached to the back of Form 'F'. (Boldface in original.) Special Condition No. 19, which defines the term "responsive proposal," provides as follows: RESPONSIVENESS OF PROPOSALS Responsiveness of Proposals Proposals will not be considered if not received by the Department on or before the date and time specified as the due date for submission. All proposals must be typed or printed in ink. A responsive proposal is an offer to perform the scope of services called for in this Request for Proposal in accordance with all the requirements of this Request for Proposal and receiving fifty (50) points or more on the Technical Proposal.[3] Proposals found to be non-responsive shall not be considered. Proposals may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A proposal may be found to be irregular or non-responsive by reasons that include, but are not limited to, failure to utilize or complete prescribed forms, conditional proposals, incomplete proposals, indefinite or ambiguous proposals, and improper and/or undated signatures. (Emphasis and boldface in original.) In the "General Instructions to Respondents" section of the RFP there appears the following reservation of rights: 16. Minor Irregularities/Right to Reject. The Buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the State's best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents. Anchor did not attach copies of any "occupational licenses" to the back of Form 'F' in its proposal. Anchor contends that it did not need to attach such licenses because none exists. This position is based on two undisputed facts: (1) The Florida Department of Business and Professional Regulation ("DBPR") does not regulate the business of providing towing and emergency roadside assistance; therefore, neither Anchor nor Sunshine held (or could hold) a state-issued license to operate, and neither company fell under DBPR's regulatory jurisdiction. (2) The instrument formerly known as an "occupational license," which local governments had issued for decades, not for regulatory purposes but as a means of raising revenue, is presently called (at least formally) a "business tax receipt," after the Florida Legislature, in 2006, amended Chapter 205 of the Florida Statutes, changing the name of that law from the "Local Occupational License Tax Act" to the "Local Business Tax Act." See 2006 Fla. Laws ch. 152. Sunshine asserts that the terms "occupational license" and "business tax receipt" are synonymous and interchangeable, and that the RFP required each offeror to attach copies of its occupational licenses/business tax receipts to the proposal. Sunshine insists that Anchor's failure to do so constituted a material deviation from the specifications because, without such documentation, the Department could not be sure whether an offeror was authorized to do business in any given locality. Sunshine presses this argument a step further based on some additional undisputed facts. As it happened, at the time the proposals were opened, Anchor held a local business tax receipt from the City of Pembroke Pines, which is the municipality in which Anchor maintains its principal place of business. Anchor had not, however, paid local business taxes to Broward County when they became due, respectively, on July 1, 2008, and July 1, 2009. Anchor corrected this problem on December 14, 2009, which was about two weeks after the Department had posted notice of its intent to award Anchor the contract, paying Broward County a grand total of $248.45 in back taxes, collection costs, and late penalties. As of this writing, all of Anchor's local business tax obligations are paid in full. Sunshine contends, however, that during the period of time that Anchor's Broward County business taxes were delinquent, Anchor was not authorized to do business in Broward County and hence was not a "responsible" proposer eligible for award of the contract. In support of this proposition, Sunshine relies upon Section 20-15 of the Broward County, Florida, Code of Ordinances ("Broward Code"), which states: Pursuant to the authority granted by Chapter 205, Florida Statutes, no person shall engage in or manage any business, profession or occupation, as the same are contemplated by Chapter 205, Florida Statutes, unless such person first obtains a business tax receipt as required by this article, unless other exempt from this requirement . . . . On this latter point regarding Anchor's authority to operate in Broward County, Sunshine appears to be correct, at least in a narrow legal sense. It is abundantly clear, however, and the undersigned finds, that, as a matter of fact, Anchor was never in any danger of being shut down by the county. Indeed, even under the strict letter of the local law, Anchor was entitled to continue operating in Broward County unless and until the county took steps to compel the payment of the delinquent taxes. Broward Code Section 20-22, which deals with the enforcement of the business tax provisions, provides: Whenever any person who is subject to the payment of a business tax or privilege tax provided by this article shall fail to pay the same when due, the tax collector, within three (3) years from the due date of the tax, may issue a warrant directed to the Broward County Sheriff, commanding him/her to levy upon and sell any real or personal property of such person liable for said tax for the amount thereof and the cost of executing the warrant and to return such warrant to the tax collector and to pay him/her the money collected by virtue thereof within sixty (60) days from the date of the warrant. . . . The tax collector may file a copy of the warrant with the Clerk of the Circuit Court of Broward County[, which shall be recorded in the public records and thereby] become a lien for seven (7) years from the due date of the tax. . . . Any person subject to, and who fails to pay, a business tax or privilege tax required by this article, shall, on petition of the tax collector, be enjoined by the Circuit Court from engaging in the business for which he/she has failed to pay said business tax, until such time as he/she shall pay the same with costs of such action. There is no evidence suggesting that the county ever sought to enjoin, or that a court ever issued an injunction prohibiting, Anchor from engaging in business, nor does it appear, based on the evidence, that a tax warrant ever was issued, filed, or executed to force Anchor to pay its back taxes. Given the relatively small amount of tax due, the likelihood of such enforcement actions being taken must reasonably be reckoned as slim to none. While paying taxes when due is certainly the obligation of a good corporate citizen, it would not be reasonable, based on the facts established in this case, to infer that Anchor is a scofflaw for failing to timely pay a local tax amounting to about $80 per year. Anchor, in short, was a responsible proposer. Sunshine's other argument has more going for it. The RFP clearly and unambiguously mandated that "occupational licenses" be attached to a proposal. If, as Sunshine maintains, the terms "occupational license" and "business tax receipt" are clearly synonymous, then Anchor's proposal was noncompliant. For reasons that will be explained below, however, the undersigned has concluded, as a matter of law, that the term "occupational license" does not unambiguously denote a "business tax receipt"——at least not in the context of Special Condition No. 8. The specification, in other words, is ambiguous. No one protested the specification or otherwise sought clarification of the Department's intent. The evidence shows, and the undersigned finds, that the Department understood and intended the term "occupational license" to mean the instrument now known as a "business tax receipt." The Department simply used the outdated name, as many others probably still do, owing to that facet of human nature captured by the expression, "old habits die hard." The Department's interpretation of the ambiguous specification is not clearly erroneous and therefore should not be disturbed in this proceeding. Based on the Department's interpretation of Special Condition No. 8, the undersigned finds that Anchor's failure to attach copies of its occupational licenses was a deviation from the requirements of the RFP. That is not the end of the matter, however, for a deviation is not necessarily disqualifying unless it is found to be material. The letting authority may, in the exercise of discretion, choose to waive a minor irregularity if doing so will not compromise the integrity and fairness of the competition. There is no persuasive direct evidence in the record that the Department made a conscious decision to waive the irregularity in Anchor's proposal. Documents in the Department's procurement file show, however, that the Department knew that Anchor's proposal lacked copies of occupational licenses, and in any event this was a patent defect, inasmuch as nothing was attached to the back of Anchor's Form 'F'. It is therefore reasonable to infer that the Department elected to waive the irregularity, and the undersigned so finds. Necessarily implicit in the Department's action (waiving the deficiency) is an agency determination that that the irregularity was a minor one. The question of whether or not Anchor's noncompliance with Special Condition No. 8 was material is fairly debatable. Ultimately, however, the undersigned is unable to find, for reasons more fully developed below, that the Department's determination in this regard was clearly erroneous. Because the Department's determination was not clearly erroneous, the undersigned accepts that Anchor's failure to submit occupational licenses was a minor irregularity, which the Department could waive. The Department's decision to waive the minor irregularity is entitled to great deference and should be upheld unless it was arbitrary or capricious. The undersigned cannot say that waiving the deficiency in question was illogical, despotic, thoughtless, or otherwise an abuse of discretion; to the contrary, once it has been concluded that the irregularity is minor and immaterial, as the Department not incorrectly did here, waiver seems the reasonable and logical course of action. The upshot is that the proposed award to Anchor should be allowed to stand. The foregoing determination renders moot the disputed issues of fact arising from Anchor's allegation that Sunshine's proposal was nonresponsive. It is unnecessary, therefore, for the undersigned to make additional findings on that subject.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order consistent with its preliminary decision to award Anchor the contract at issue. DONE AND ENTERED this 6th day of April, 2010, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings 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 6th day of April, 2010.
The Issue The issue is whether Petitioner is liable for the sales and use tax assessment issued by Respondent on February 21, 1995.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: In this proceeding, Respondent, Department of Revenue (DOR), has issued a proposed sales and use tax assessment in the amount of $24,546.54, plus $6,640.12 in penalties, plus interest from the date of the assessment, against Petitioner, Florida Truck Dock Company (Petitioner or taxpayer). As of March 20, 1997, the assessment totaled $55,195.27, and it continues to increase by $8.07 each day. The assessment constitutes taxes, penalties, and interest allegedly due from Petitioner for various materials and supplies purchased by Petitioner for use in the performance of real property contracts for Petitioner's customers. In its response to the assessment, Petitioner denied that it owed the money. Petitioner's business activities consisted primarily of purchasing truck loading dock equipment from suppliers, principally Kelly Company, Inc. (Kelly), and then installing such equipment as an improvement to real estate. Its records indicate that purchased equipment was generally brought into Florida and installed in real property in the state under a contract whereby parts and labor were furnished for one lump sum contract price. The foregoing contracts were Class A or lump sum contracts within the meaning of Rule 12A-1.051(2)(a), Florida Administrative Code. Class A contracts are considered contracts for the improvement of real estate, not contracts for the resale of tangible personal property. In addition, when the equipment was purchased, Petitioner had not issued resale certificates to its vendors. Under these circumstances, Petitioner was properly treated as an end-user of the equipment in question and owed use taxes on all such purchases of tangible personal property. This controversy began on March 30, 1992, when DOR issued a Notification of Intent to Audit Books and Records of the taxpayer in conjunction with a routine audit. The notice requested that Petitioner make available various corporate records pertaining to its sales and use tax and intangible tax liability. However, only the sales and use tax is in issue here. DOR later advised the taxpayer that the audit period would run from March 1, 1987, through February 29, 1992, and that instead of a detailed audit, only a three-month sampling of the full audit period would be necessary. An initial audit revealed that Petitioner was entitled to a refund. None was given, however, because of information supplied by an employee of the taxpayer regarding the possible destruction and alteration of certain records by the taxpayer, and the auditor's conclusion that a three-month sampling of the records was not representative for the full five-year audit period. In addition, the auditor concluded that the results of the sample period were not reasonable. For these reasons, the scope of the audit was expanded. The auditor then requested, among other things, that copies of all sales (summary) journals for the entire five-year period be produced. Although Petitioner has always contended that these journals were merely "commission" journals for transactions between its vendors and customers, the auditor's finding that they are records of cash transactions is consistent with the language on the face of the journals, referring to "deposits" and "total deposits." Further, a comparison of the journals with Petitioner's own bank statements confirms this finding. At least twelve months of the records were missing, and the taxpayer agreed to recreate the missing records. Once a copy of all journals (both original and recreated) was produced, the auditor tested their validity and then made various audit adjustments, which are reflected on Schedule A-2 of Exhibit 5. In those instances where inadequate cost price information concerning equipment purchases was provided by the taxpayer, the auditor properly used estimates in making his adjustments. The tax liability for each taxable transaction was recorded by the taxpayer under Account 367 on the sales journals. The auditor then examined the source documents (original invoices) to verify the accuracy of the recorded amounts. These numbers were then compared with the taxes paid by the taxpayer on its monthly tax returns filed with DOR. This comparison produced a deficiency which represents approximately 75 percent of the total assessment. However, in those instances where Petitioner collected sales tax from its customers, and remitted the same to DOR, Petitioner was not assessed with a tax for those same items. A sampling of the audit period established that Petitioner also had a number of lump-sum contracts with various governmental customers on which it neither paid taxes to the vendor when the equipment was purchased, nor did it collect taxes from the end-user when the equipment was resold. Thus, it was responsible for the use taxes on these transactions. The deficiency is detailed on Schedule B-3 of the final audit report (Exhibit 6), and it accounts for approximately 14 percent of the total assessment. The remaining part of the assessment is related to four miscellaneous transactions which are unrelated to the sales journals. Two of the transactions occurred during the short period of time when the service tax was in effect in 1987, while the remaining two relate to small purchases of equipment and supplies by the taxpayer for its own consumption. There was no evidence that the taxpayer paid the taxes due on these transactions. DOR met with the taxpayer, its accountant, and its original counsel on various occasions in an effort to obtain more documentation favorable to the taxpayer's position. In most cases, the taxpayer refused to provide more records. At one meeting, however, the taxpayer produced additional source documents (invoices) that appeared to be altered from the original invoices previously given to the auditor. These are shown in Exhibit 7 received in evidence. When asked by the auditor for copies of the same invoices sent to customers so that the discrepancy could be resolved, the taxpayer refused to comply with this request. During the audit process, the taxpayer contended that its primary supplier, Kelly, had already paid taxes on a number of the transactions. No documentation was produced, however, to support this contention. It also complained that there was bias on the part of DOR's auditor. As to this contention, the record shows that the auditor had no relationship with the taxpayer prior to this audit, and for the intangible personal property tax, the auditor's field work actually resulted in a refund for Petitioner. Finally, the taxpayer contended that rather than using the originally supplied records, the auditor should have used Petitioner's recreated or altered records in making the audit adjustments. This latter contention has been rejected.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a final order sustaining its original assessment against Petitioner. DONE AND ENTERED this 13th day of November, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1998. COPIES FURNISHED: Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Jeffrey M. Dikman, Esquire Department of Legal Affairs The Capitol, Tax Section Tallahassee, Florida 32399-1050 Benjamin K. Phipps, Esquire Post Office Box 1351 Tallahassee, Florida 32302 L. H. Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact At the times pertinent to this proceeding, James W. Johnson and James E. Cotter were the officers and owners of Underground Supply Company. In October 1986, Mr. Johnson and Mr. Cotter sold their interest in Underground Supply Company to Ferguson Enterprises. Mr. Johnson and Mr. Cotter remained liable for any contingent tax liabilities following the sale. Underground Supply Company was required by Section 199.042(1), Florida Statutes, to file its corporate intangible tax return for 1986 on or before June 30, 1986. Mr. Johnson, who was the president of Underground Supply Company from 1972 through 1987, knew of the intangible tax filing requirement and had the ultimate responsibility to file tax returns on behalf of the corporation. During an audit conducted by Respondent in 1989, it was determined that Underground Supply Company's corporate intangible tax return for 1986 had not been filed. Following the audit, Underground Supply Company was assessed taxes and interest on the taxes. In addition, a delinquency penalty was assessed pursuant to Section 199.282(3)(a), Florida Statutes. The taxes and interest were promptly paid by Mr. Johnson on behalf of Underground Supply Company. A failure to file penalty was initially assessed against Petitioner pursuant to Section 199.282(3)(b), Florida Statutes, but this penalty was removed by Respondent after it determined that the failure to file penalty was not applicable. The delinquency penalty in the amount of $1,078.86 was properly calculated and was properly assessed. From 1973 until Mr. Johnson and Mr. Cotter sold their business, one accountant, Mr. Melvin Fancher, performed the accounting services required by Underground Supply Company. From 1973 to August 1985, Mr. Fancher was an independent contractor who performed his services through the various accounting firms with which he was associated. In August 1985, Underground Supply Company hired Mr. Fancher as its in-house accountant. Mr. Fancher was familiar with the books and records of Underground Supply Company and had prepared intangible tax returns on behalf of the company in the past. Underground Supply Company had, prior to the 1986 intangible tax return, promptly filed all of its tax returns and had promptly paid all taxes due of it. The failure to file the 1986 intangible tax return was caused by Mr. Fancher's oversight and by Mr. Johnson's and Mr. Cotter's reliance on Mr. Fancher. The failure to file was an honest error. There was no intention on the part of Mr. Fancher, Mr. Johnson, Mr. Cotter or anyone else on behalf of Underground Supply Company to avoid the payment of the intangible tax for 1986. There was no evidence of extenuating circumstances which caused Mr. Fancher's failure to file the 1986 intangible tax return or for Underground Supply Company's failure to detect such failure. Mr. Johnson did not know why the tax return was not filed and he did not know why the failure to file was not detected prior to the 1989 audit. Although Underground Supply Company referenced Mr. Fancher's change of status from independent contractor to in- house accountant in August 1985 in an attempt to explain the failure to file the intangible tax return due June 1986, there was no evidence of a connection between the two events. In October 1986 Mr. Johnson and Mr. Cotter sold Underground Supply Company to Ferguson Enterprises. During the examination of the books and records of Underground Supply in connection with the sale, no one discovered the omission to file the 1986 intangible tax return. Respondent denied Petitioner's request to waive the delinquency penalty, but it did review and revise the assessments, which resulted in a reduction of Petitioner's liability. Respondent's letter of December 14, 1989, which notified Petitioner of its final decision provided, in pertinent part, as follows: Section 213.21, F.S. grants the Department authority to settle or compromise penalty if there exists a reasonable cause as to the delinquent payment of tax due. The burden of showing the existence of reasonable cause and the absence of willful neglect is on the taxpayer. See Florida Administrative Code, Rule 12- 3.007. It is the position of the Department that the mistake of not filing a return due to a change in your CPAs is not an extenuating or unusual circumstance and does not meet the criteria of reasonable cause as provided by the rule cited above. The statute provided for an amnesty program in 1987 which gave relief to taxpayers who had not filed their intangible tax returns in prior periods. Accordingly, the revised assessment is sustained.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent enter a final order which denies Petitioner's request for a waiver of the delinquency penalty assessed for the failure to timely file the 1986 intangible tax return. DONE AND ENTERED this 21st day of May, 1990, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1990. APPENDIX TO THE RECOMMENDED ORDER IN CASE 90-0755 The post-hearing submittal filed by Petitioner contained no proposed findings of fact. The proposed findings of fact submitted by Respondent are adopted in material part by the Recommended Order. Copies furnished: James E. Cotter Qualified Representative 4460 Northwest 19th Terrace Fort Lauderdale, Florida Lealand L. McCharren Assistant Attorney General Department of Legal Affairs The Capitol - Tax Section Tallahassee, Florida 32399-1050 Mr. James W. Johnson Underground Supply Company 6969 Northwest 87th Avenue Parkland, Florida 33067 William D. Moore General Counsel Department of Revenue 203 Carlton Building Tallahassee, Florida 32399-0100 J. Thomas Herndon Executive Director Department of Revenue 203 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact In 1971, the Okaloosa Island Authority, a governmental agency, leased certain real property on Santa Rosa Island in Okaloosa County to the Okaloosa Development Corporation for a term of 99 years. Certain ultimate sub-lessees under the Okaloosa Island Authority lease mortgaged their leaseholds as security for the payment of promissory notes held by petitioner First National Bank of Birmingham. Two such notes are involved, both of which were executed and recorded in Florida during 1974. Petitioner is the payee on both notes, and kept them both at its headquarters in Birmingham, Alabama. The maker of the larger note is U.R.S., Inc., a Pennsylvania corporation. The U.R.S. note is in the face amount of $2,500,000.00, although only $347,867.91 of the principal obligation was still outstanding on January 1, 1975; the note was paid in full on January 27, 1975. The makers of the second note were Phillip F. Zeidman and his wife, Nancy L. Zeidman. The Zeidman note is in the face amount of $45,000.00. On January 1, 1975, $44,000.00 of the principal obligation remained outstanding; and on January 1, 1976, $29,286.83 of the principal obligation was still outstanding. No intangible personal property tax was paid when the U.R.S. and Zeidman notes, together with the mortgages which secured their Payment, were recorded by the office of the Clerk of the Circuit Court of Okaloosa County. Statement Required By Stuckey's of Eastman, Georgia v. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976) Petitioner's proposed fact findings have been adopted, in substance, except as to what the First National Bank of Birmingham relied on, as to which no evidence was adduced. Respondent's proposed fact findings have been adopted, in substance, except that the face amount of the U.R.S. note was $2,500,000.00, not $500,000.00; and the real property leased by the Okaloosa Island Authority is situated in Okaloosa, not Escambia County.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner's substantive tax liability for 1975 and 1976 be set, with respect to the Zeidman note, at seventy-three and twenty-nine hundredths dollars ($73.29 = 44.00 + 29.29). That petitioner's substantive tax liability for 1975 and 1976 be set, with respect to the U.R.S. note, at three hundred forty-seven and eighty-seven hundredths dollars ($347.87 = 347.87 + 0.00). DONE and ENTERED this 15th day of June, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1977. COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304 William Guy Davis, Jr., Esquire Beggs and Lane 700 Brent Building Post Office Box 12950 Pensacola, Florida 32576