The Issue Whether or not, on or about December 2, 1976, investigation revealed that Robert W. Pope, licensed under the Beverage Laws of the State of Florida, failed to file and pay his State Sales Tax for the licensed premises, known as Kitty's, located at 1020, 4th Street, South, St. Petersburg, Florida, in violation of 212, F.S., thereby violating 561.29, F.S.
Findings Of Fact Robert W. Pope is and at all times pertinent to this cause has been the holder of license no. 62-512, series 4-COP, held with the State of Florida, Division of Beverage to trade as Kitty's, located at 1020, 4th Street, South, St. Petersburg, Pinellas County, Florida. When the Respondent, Pope, began to operate the licensed premises he was given a registration sales tax number by the State of Florida, Department of Revenue. This number was provided in accordance with 212, F.S. That law required the remittance of the collected sales tax on a month to month basis, the period beginning with the first day of the month and ending with the last day of the month. The remittance was due on the first day of the following month and payable by the 20th day of the following month. Failure to pay by the 20th would result in a 5 percent penalty and 1 percent interest per month. The sales tax remittance due from the licensed premises for July, 1976 through November, 1976 was not made to the Department of Revenue. In December, 1976 the Department of Revenue filed a lien against the licensed premises to collect an amount due at that time of $2,200.66. As an aid to the collection of the account, the Department of Revenue levied the subject liquor license. Subsequently, in February, 1977 the Respondent made a $10,000 initial payment and three monthly installments to satisfy the lien on this licensed premises and another licensed premises which the Respondent owned. At present all taxes due and owing under 212, F.S. are current. The above facts establish that the Respondent failed to comply with the provisions of 212, F.S. pertaining to the remittance of sales tax from the Respondent to the State of Florida, Department of Revenue. This violation, thereby subjects the Respondent to the possible penalties of 561.29, F.S.
Recommendation It is recommended that the Respondent, Robert W. Pope, be required to pay a civil penalty in the amount of $750.00 or have the license no. 62-512, series 4- COP, suspended for a period of 20 days. DONE AND ENTERED this 28th day of July, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William Hatch, Esquire Division of Beverage 725 South Bronough Street Tallahassee, Florida 32304 Robert W. Pope, Esquire 611 First Avenue, North St. Petersburg, Florida 33701
The Issue Whether Respondent committed the violations alleged in the Administrative Action, and, if so, what disciplinary action should be taken.
Findings Of Fact Based upon the evidence adduced at the final hearing and the record as a whole, the following findings of fact are made: At all times material to the instant case, Respondent operated a restaurant, Dinosaur's Café and Sports Bar, located in Boynton Beach, Florida. Respondent is now, and has been at all times material to the instant case, the holder of a Special Restaurant License (license number 60-11570 4COP SRX) authorizing it to sell alcoholic beverages on the premises of Dinosaur's Café and Sports Bar. On September 28, 1999, DABT Special Agent Jennifer DeGidio conducted an inspection of the premises of Dinosaur's Café and Sports Bar. Her inspection revealed that the premises had available seating for less than 150 patrons and that there were no records on the premises regarding the purchase and sale of food, alcoholic beverages, and non-alcoholic beverages. At no time had DABT given Respondent written approval to maintain these records at a designated off-premises location. During her September 28, 1999, inspection, Special Agent DeGidio issued and served on Respondent notices advising Respondent that its failure to have seating for at least 150 patrons and to maintain food and beverage records on the premises for a minimum of three years from the date of sale was in violation of the law and that, if these violations were not remedied within 14 days, administrative charges would be brought against Respondent. Special Agent DiGidio returned to the premises of Dinosaur's Café and Sports Bar on October 12, 1999, to find that the noticed violations had not been corrected. There were still fewer than 150 seats for patrons, and Respondent was again unable to produce the required records on the premises. The Administrative Action that is the subject of the instant controversy was issued on November 16, 1999. As of that date, Respondent had failed to timely remit to DABT $16.75 in surcharge monies that Respondent owed DABT for alcoholic beverages it had sold at retail for on-premises consumption at Dinosaur's Café and Sports Bar.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that DABT enter a final order finding Respondent committed the violations alleged in the Administrative Action, and disciplining Respondent therefor by revoking its license "without prejudice to obtain any other type of license, but with prejudice to obtain the same type of special license for 5 years"; fining Respondent $1,000.00; and requiring Respondent to pay the $16.75 in surcharge monies it owes DABT, plus applicable penalties and interest. DONE AND ENTERED this 21st day of August, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of August, 2001.
The Issue The issue for determination is whether Respondents' alcoholic beverage licenses should be disciplined for violation of Chapter 561, Florida Statutes. Resolution of this issue requires a determination of whether Respondents correctly reported and remitted alcoholic beverage surcharges required for the audit period of July 1, 1990 through March 31, 1991. Petitioner claims that Respondent Southeast Central, Inc., was deficient in reporting, surcharge payments, and penalties for the period July 1, 1990, through March 31, 1991, in the total amount of $4,121.80, contrary to Section 561.501, Florida Statutes. Similarly, Petitioner alleges that Respondent Central Restaurants, Inc., was deficient in reporting, surcharge payments, and penalties for the same period in the total amount of $96.72.
Findings Of Fact Respondents are two corporations. Southeast Central Inc., operating as the Pirate's Den Seafood Cafe, holds license number 26-03346 SRX, series 4-COP, for premises located at 5023 Central Restaurants, Inc., operating as the Seafood Place, holds license number 26 Jacksonville, Florida. Robert Domin is president, sole corporate officer and sole stockholder of both corporations. Petitioner's auditor performed audits with regard to records of both Respondents, following their random selection by Petitioner, to verify Respondents' compliance with surcharge requirements imposed by Section 561.501, Florida Statutes, on the retail sales of "on premise consumption" of alcoholic beverages on licensed premises. The audits covered the period of July 1, 1990 through March 31, 1991, for both Respondents, and were performed during the period of early July through August 2, 1991. Alcoholic beverage licensees are afforded an opportunity to elect to report and pay the surcharge by either the purchase method or the sales method. Under the purchase method, a licensee pays the surcharge on alcoholic beverages purchased from authorized distributors. Under the sales method, licensees pay the surcharge on alcoholic beverages sold for consumption on the premises. Each Respondent submitted Petitioner's form DBR 44-005E, reflecting their election of the sales method. Form DBR 44-005E also requires disclosure of the licensee's inventory of alcoholic beverages on hand prior to opening of business on July 1, 1990. A licensee's reporting under the sales method is audited by the Sales Depletion Method. Under this methodology, a beginning inventory is ascertained. Second, purchases made by the licensee for the audit period are computed. Third, an ending inventory for the audit period is ascertained. Fourth, Gross Gallonage Available For Sale is computed by adding the beginning inventory to the purchases made during the audit period and then subtracting the ending inventory. Fifth, the Net Gallonage Available For Sale during the audit period is calculated by subtracting from the Gross Gallonage an allowance for spillage and a cooking adjustment. The end result is termed the Adjusted Sales Gallonage from which amount the amount of surcharge owed for the audit period is determined. Respondents' beginning inventory figures were provided by their employee, Heather Scrape. This finding is further supported by the identification of Scrape's handwriting on Respondents' exhibit number 2 at the final Hearing by Respondent's president as being that of Scrape. The figures written on the exhibit by Scrape correspond to figures earlier provided by Respondents to Petitioner on Form DBR 44-005E and corroborate testimony of Petitioner's auditor that Scrape provided Petitioner's audit personnel with beginning inventory information for Respondents. Scrape, no longer employed by Respondents, still lives and works in the area although she did not testify at the final hearing. Distributor invoices at each Respondent location were used to determine alcoholic beverage purchases by each Respondent for the audit period. The ending inventory for the audit period for each Respondent was provided to Petitioner's auditor by Respondents. The auditor considered a spillage allowance of 10 percent for draft beer and five percent for liquor, bottled or canned beer, wine coolers and wine. The spillage allowance is enunciated in Emergency Rule 7AER 90-5, effective July 1, 1990, and also codified in Rule 7A- 4.063, Florida Administrative Code. Respondents provided no documentation for cooking adjustment amounts. The audit for Respondent Southeast Central, Inc., revealed a deficiency in surcharge reporting and payment of $3,294.15 with a late penalty due in the amount of $827.65. The audit for Respondent Central Restaurants, Inc., revealed a deficiency of $84.24 with a late penalty of $16.85 which, after adjustment for spillage allowance, totalled $96.72. At request of Respondents, Petitioner's auditor returned to the premises of each licensee and re-conducted the audit. No substantial corrections were made as a result of this effort with the minor exception of discovery of additional invoices on the premises of Respondent Southeast Central Inc., which increased, by a minor sum, the surcharge amount and penalty to the current amounts. The deficiency for Respondent Southeast Central, Inc., represents 55 percent of the total surcharge due for the audit period. The deficiency for Respondent Central Restaurants represents 14 percent of the total surcharge due for the audit period. Petitioner's Form DBR 44-005S states that the surcharge is to be calculated on gallons and/or ounces by reporting licensees. A conversion calculation sheet is provided on the back of the form to assist retailers in converting alcoholic beverage measurements into gallons. Respondents' cash registers record the price and number of alcoholic beverages sold in terms of units, i.e., three glasses of beer, two bottles of beer, one glass of wine, etc. Respondents predetermined how many ounces of an alcoholic beverage should be in a particular drink. Respondents then used this ideal measurement or standard in calculating the surcharge due. The calculation involved multiplying the ideal standard or measurement by the units recorded through the cash registers as sold. There is no actual record made of the amount of alcoholic beverage in a unit sale. Sometime after August 2, 1991, Respondents provided Petitioner's auditor with a copy of a beginning July 1, 1990 inventory report for Respondent Southeast Central, Inc., derived from application of the ideal measurement or standard as a multiplier of units of recorded sales. This action by Respondents followed completion of Petitioner's initial audits and notice to Respondents of delinquency in surcharge payment amounts. Respondents presented no explanation as to why this inventory was not provided to Petitioner's auditor in the course of her initial audit. The inventory document was also not authenticated in accordance with Section 90.901, Florida Statutes, and is not credited at this time for establishing a beginning inventory for Respondent Southeast Central, Inc., at variance with the beginning inventory reported for this Respondent on Petitioner's form DBR 44-005E. Petitioner permits vendors a period of 30 days within which to remit delinquent surcharge payments following notice of delinquency. Neither Respondent complied with Petitioner's demands to remit delinquent surcharge payments discovered as the result of Petitioner's audit.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered requiring payment by Respondent in Case No. 93-0322 in the amount of $4,121,80, the amount of total tax and liabilities claimed by Petitioner to be due; and requiring payment by Respondent in Case No. 93-0329 of the amount of $96.72, the amount of the total tax and liabilities claimed by Petitioner to be due in that case. DONE AND ENTERED this 4th day of August, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of August, 1993. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 93-0322 The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-5. Accepted, not verbatim. 6.-7. Rejected, subordinate to HO findings. 8.-13. Accepted, not verbatim. Respondent's Proposed Findings. 1.-7. Accepted, not verbatim. 8.-12. Rejected, subordinate to HO findings. Rejected, not relevant although this is a duty of the auditor. Accepted. Rejected, argumentative. Rejected, no evidence presented as to theft or overpouring. Further, Respondents were given benefit of spillage allowance. 17.-18. Rejected, weight of the evidence. COPIES FURNISHED: Miguel Oxamendi, Esquire Assistant General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, FL 32399-0792 Robert Domin, President Southeast Central, Inc. Central Restaurants, Inc. 4359 Roosevelt Boulevard Jacksonville, Florida 32210 Jack McCray General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, FL 32399-0792 George Stuart, Secretary Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, FL 32399-0792 John Harris, Director Division of Alcoholic Beverages Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Whether Respondents' alcoholic beverage license should be disciplined for the reasons stated in Petitioner's Notice to Show Cause dated September 14, 1982.
Findings Of Fact Based on the evidence presented, the following facts are determined: The Long Branch was operating under DABT License No. 74-878 in License Series 4-COP-SRX. This type of license requires food and nonalcoholic beverage sales to constitute at least 51 percent of all sales. Audit of the Long Branch's records, which were examined on a month-by- month breakdown of the sales for the period July 1 1981, to July 1, 1982, showed food and non- alcoholic beverage sales at 7.7 percent and alcoholic beverage sales at 92.3 percent of total sales. For the period July 1 through July 27, 1982, the ratio was 4.3 percent to 95.7 percent. At no time during the more than one year period audited did the food sales reach the required 51 percent.
Recommendation Based on the foregoing, it is RECOMMENDED: That Respondents' License No. 74-878 be revoked. RECOMMENDED this 31st day of March, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 31st day of March, 1983. COPIES FURNISHED: Thomas M. and Sandra J. Spera Long Branch 600 South Yonge Street Ormond Beach, Florida Mr, Howard M. Rasmussen Director, Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr Gary R. Rutledge Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
The Issue The issue in Case no. 92-4204 is whether the Respondent correctly reported and remitted the alcoholic beverage surcharge for the audit period of July 1, 1990 through March 31, 1991. The amount claimed by the Department for this case is $5,767.82. The issue in Case no. 92-4205 is whether the Respondent correctly reported and remitted the surcharge for the audit period of July 1, 1990 through March 31, 1991. The amount of the audit deficiency alleged by the Department for this case is $4,952.48.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with the responsibility of enforcing and administering Chapter 561, Florida Statutes. Respondent is the owner and holder of two alcoholic beverage licenses. License no. 58-01411 which is a 4COP SRX license is for Hemingway's Oyster Bar and Caribbean Barbeque, Inc. doing business as Townsend's Fish House, Oyster Bar & Tavern (Fish House). The business location for that license is 35 West Michigan Street, Orlando, Florida. The second license, license no. 58-02757, is also a 4COP SRX license for Hemingway's Oyster Bar and Caribbean Barbeque, Inc. doing business as Townsend's Plantation and Doc Tommy's Tavern (Plantation). That business location is 604 E. Main Street, Apopka, Florida. Following the enactment of Section 561.501, Florida Statutes, the Department issued a form designated DBR 44-005E that directed alcoholic beverage licensees to elect a method of reporting and computing the beverage surcharge. The form directed licensees to specify whether the beverage surcharge would be paid based upon purchases or based upon sales. For vendors utilizing the sales method, form DBR 44-005E required a certification of the inventory of alcoholic beverages on hand before opening for business July 1, 1990. Respondent elected to utilize the sales method. The Fish House inventory certified that it had 351.05 gallons of beer (241 bottled, 110.05 draft), 79.48 gallons of wine, and 172.82 gallons of liquor on hand as of the date noted. The Plantation certified it had 183.84 gallons of beer, 139.14 gallons of wine, and 99.46 gallons of liquor. In May, 1991, auditors employed by the Department met with Respondent's employees at each of the licensed premises. An audit for the period July, 1990 through March, 1991, utilizing the depletion method was chosen since the licensee had elected the sales method for reporting and remitting the beverage surcharge. In performing the audit at the Plantation location, the Department accepted that 74.66 gallons of liquor, 39.85 gallons of wine, and 567 gallons of draft beer were used in food preparations and were, therefore, not included in the gallons reported for surcharge purposes (cooking allowance). The invoices for suppliers at the Plantation were reviewed for the following categories of purchases: draft beer, beer (presumably bottled or canned), wine coolers, wine, and liquor. By adding the total of all purchases for the audit period to the beginning inventory, the Department calculated a total volume for the Plantation. In theory, by subtracting the ending inventory from the total volume resulted in the amounts of beverages consumed. From that amount the Department subtracted the cooking allowance noted above, and a spillage amount provided for by rule. As it is presumed some spillage occurs in the mixing and serving of beverages, the rule provides for an offset for spillage by beverage category. Following the procedure outlined above, the auditor calculated that for the audit period, the Plantation had sold 720 gallons of draft beer, 1731.61 gallons of beer, 8.55 gallons of wine coolers, 1090.70 gallons of wine, and 546.27 gallons of liquor. When compared to the reports filed by the Plantation, the auditor determined that in each category noted, the licensee had under reported the volumes sold. The difference for each category was: 494.01 gallons of draft beer, 788.25 gallons of beer, 8.55 gallons of wine coolers, 642.01 gallons of wine, and 244.93 gallons of liquor. The total additional surcharge which should have been remitted based upon the difference not reported was $5,767.82. The auditors used the same approach when reviewing the records for the Fish House. The cooking allowance accepted by the Department for the Fish House was 1400 gallons beer, 67.38 gallons wine, and 9.50 gallons liquor. The spillage allowance was calculated as provided by rule. Additionally, a collection allowance was given for the Fish House in the amount of $195.85. After computing the totals as described above, the auditor found a difference in each of the categories reviewed. After applying the surcharge to the unreported sales amount, the Fish House was cited for a shortage of $4,952.48. The Fish House management claimed, as part of the volume unaccounted for, drinks which were deemed complimentary or free. However, such beverages should have been included in the volume reported as a sale. Respondent also claimed that the spillage allowance provided for by rule was arbitrarily low. Also unconsidered were the losses to inventory due to theft. When such losses are deemed minimal, the theft may go unreported to police or insurance. Cumulatively such losses may be significant. Also unconsidered in reconciling the inventory was the industry practice of "over pours." While discouraged by Respondent, it is not uncommon for bartenders to pour more than the standard measurement of liquor for a good customer. If so, the Respondent's practice of looking to the number of sales to determine ounces sold would have resulted in an under estimating of the ounces dispensed. The auditors did not review the sales tapes or other sales records to confirm the surcharge amounts. The Respondent was unaware of the audit method which would be used to review the surcharge accounting. No insurance or police reports were made for the loss or stolen inventory claimed by Respondent.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco enter a final order in case no. 92-4204 requiring the Respondent to remit an additional surcharge in the amount of $5,767.82. For case no. 92-4205, the Department should require the Respondent to remit an addition surcharge amount of $4,952.48. DONE and ENTERED this 7th day of January, 1993, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH 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 7th day of January, 1993. APPENDIX TO CASE NOS. 92-4204 AND 92-4205 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: 1. Paragraphs 1, 2, 3, 5, 6, 7, 9, 13, 17, 18, 21, and 22 are accepted. Paragraph 4--the first sentence is accepted; otherwise rejected as irrelevant or comment. Paragraph 8 is rejected as irrelevant. Paragraphs 10, 11, and 12 are rejected as irrelevant or argument. Paragraph 14 is rejected as irrelevant. Paragraph 15 is rejected as repetitive, unnecessary or irrelevant. Paragraph 16 is rejected as argument. Paragraphs 19 and 20 are rejected as irrelevant. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraphs 1 and 2 are accepted. Paragraph 3 is rejected as irrelevant. Paragraph 4 is rejected as contrary to the weight of credible evidence. Paragraph 5 is rejected as contrary to the weight of the evidence or irrelevant. Paragraph 6 is rejected as irrelevant. Paragraph 7 is rejected as irrelevant or contrary to governing law or rule. NOTE: Respondent mistakenly has alleged facts or circumstances more appropriately raised by a rule challenge procedure. Section 120.57(1) hearings do not resolve issues related to the lawfulness of rules. Further, challenges to unpromulgated agency policy should be challenged as an unpromulgated rule. Such challenges are not appropriate to this type of proceeding. COPIES FURNISHED: Miguel Oxamendi Asst. General Counsel Dept. of Business Regulation 725 S. Bronough Street Tallahassee, FL 32399-1007 Richard S. Wright Firstate Tower, Ste. 1550 255 S. Orange Avenue Orlando, FL 32801 Clay M. Townsend 35 W. Michigan St. Orlando, FL 32806 Richard W. Scully, Executive Director Dept. of Business Regulation 725 S. Bronough Street Tallahassee, FL 32399-1007 Donald D. Conn, General Counsel Dept. of Business Regulation 725 S. Bronough Street Tallahassee, FL 32399-1007
The Issue As to DOAH Case No. 18-4475RX, whether Florida Administrative Code Rule 12A-1.044(5)(a) is an invalid exercise of delegated legislative authority in violation of section 120.52(8), Florida Statutes.1/ As to DOAH Case No. 18-4992RU, whether the Department of Revenue's ("Department") Standard Audit Plan, Vending and Amusement Machines--Industry Specific, section 1.1.3.3 ("SAP") is an unadopted rule in violation of sections 120.54 and 120.56, Florida Statutes.
Findings Of Fact The Parties and Audit Period GBR is a Florida corporation with its principal place of business in Miami, Florida. Gilda Rosenberg is the owner of GBR and a related entity, Gilly Vending, Inc. ("Gilly"). GBR and Gilly are in the vending machine business. At all times material hereto, Amit Biegun served as the chief financial officer of the two entities. The Department is the state agency responsible for administering Florida's sales tax laws pursuant to chapter 212, Florida Statutes. This case concerns the audit period of January 1, 2012, to December 31, 2014. GBR's Provision of Vending Machine Services Prior to the audit period, the school boards of Broward and Palm Beach County issued written solicitations through invitations to bid ("ITB"), seeking vendors to furnish, install, stock, and maintain vending machines on school property. The bids required a "full turn-key operation." The stated objectives were to obtain the best vending service and percentage commission rates that will be most advantageous to the school boards, and to provide a contract that will be most profitable to the awarded vendor. The stated goal was that student choices from beverage and snack vending machines closely align with federal dietary guidelines. GBR operates approximately 700 snack and beverage vending machines situated at 65 schools in Broward, Palm Beach, and Miami-Dade Counties. Of these 65 schools, 43 are in Broward County, 21 are in Palm Beach County, and one is in Miami-Dade County. The snack vending machines are all owned by GBR. Beverage vending machines are owned by bottling companies, such as Coca-Cola and Pepsi. Of the 700 vending machines, approximately 60 percent of the machines are for beverages and the remaining 40 percent are for snacks. GBR has written vending agreements with some schools. In these agreements, GBR is designated as a licensee, the school is designated as the licensor, and GBR is granted a license to install vending machines on school property in exchange for a commission. Furthermore, GBR is solely responsible to pay all federal, state, and local taxes in connection with the operation of the vending machines. Ownership of the vending machines does not transfer to the schools. However, in some cases the schools have keys to the machines. In addition, designated school board employees have access to the inside of the machines in order to review the meter, monitor all transactions, and reconcile the revenue from the machines. GBR places the vending machines on school property. However, the schools control the locations of the vending machines. The schools also require timers on the machines so that the schools can control the times during the day when the machines are operational and accessible to students. The schools also control the types of products to be placed in the machines to ensure that the products closely align with the federal dietary guidelines. The schools also control pricing strategies. GBR stocks, maintains, and services the vending machines. However, Coca-Cola and Pepsi may repair the beverage machines they own. GBR is solely responsible for repairing the machines it owns. The schools require that any vendor service workers seeking access to the vending machines during school hours pass background checks. GBR route drivers collect the revenue from all of the vending machines and the revenues are deposited into GBR's bank accounts. In exchange for GBR's services, the schools receive from GBR, as a commission, a percentage of the gross receipts. However, neither GBR nor the schools are guaranteed any revenue unless sales occur from the machines. On its federal income tax returns, GBR reports all sales revenue from the vending machines. For the tax year 2012, GBR's federal income tax return reflects gross receipts or sales of $5,952,270. Of this amount, GBR paid the schools $1,363,207, a percentage of the gross receipts which GBR characterized on the tax return and its general ledger as a commission and equipment space fee and cost of goods sold. For the tax year 2013, GBR's federal income tax return reflects gross receipts or sales of $6,535,362. Of this amount, GBR paid directly to the schools $1,122,211, a percentage of the gross receipts which GBR characterized on the tax return and its general ledger as a commission and equipment space fee and cost of goods sold. For the tax year 2014, GBR's federal income tax return reflects gross receipts or sales of $6,076,255. Of this amount, GBR paid directly to the schools $1,279,682, a percentage of the gross receipts which GBR characterized on the tax return and its general ledger as a commission and equipment space fee and cost of goods sold. Thus, for the audit period, and according to the federal tax returns and general ledgers, GBR's gross receipts or sales were $18,563,887. Of this amount, GBR paid directly to the schools $3,765,100, as a commission and equipment space fee and cost of goods sold. The Department's Audit and Assessment On January 27, 2015, the Department, through its tax auditor, Mary Gray, sent written notice to GBR of its intent to conduct the audit. This was Ms. Gray's first audit involving vending machines at schools. Thereafter, GBR provided Ms. Gray with its general ledger, federal returns, and bid documents. On October 28, 2015, Ms. Gray issued a draft assessment to GBR. The email transmittal by Ms. Gray to GBR's representative states that "[t]he case is being forwarded for supervisory review." In the draft, Ms. Gray determined that GBR owed additional tax in the amount of $28,589.65, but there was no mention of any purported tax on the monies paid by GBR to the schools as a license fee to use real property. However, very close to the end of the audit, within one week after issuing the draft, and after Ms. Gray did further research and conferred with her supervisor, Ms. Gray's supervisor advised her to issue the B03 assessment pursuant to section 212.031 and rule 12A-1.044, and tax the monies paid by GBR to the schools as a license fee to use real property. Thus, according to the Department, GBR was now responsible for tax in the amount of $246,230.93, plus applicable interest. Of this alleged amount, $1,218.48 was for additional sales tax (A01); $4,181.41 was for purchase expenses (B02); $13,790 was for untaxed rent (B02); and $227.041.04 was for the purported license to use real property (B03). Ms. Gray then prepared a Standard Audit Report detailing her position of the audit and forwarded the report to the Department's dispute resolution division. On January 19, 2016, the Department issued the Notice of Proposed Assessment ("NOPA") against GBR for additional tax and interest due of $288,993.31. The Department does not seek a penalty against GBR. At hearing, Ms. Gray testified that the Department's SAP is an audit planning tool or checklist which she used in conducting GBR's audit. Employees of the Department are not bound to follow the SAP, and the SAP can be modified by the auditors on a word document. The SAP was utilized by Ms. Gray during the audit, but it was not relied on in the NOD.4/
The Issue Whether the contested and unpaid portions of the tax, penalty and interest assessment issued against Petitioners as a result of Audit No. 9317210175 should be withdrawn as Petitioners have requested?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Shuckers is an oceanfront restaurant and lounge located at 9800 South Ocean Drive in Jensen Beach, Florida. In November of 1992, Petitioner Mesa's brother, Robert Woods, Jr., telephoned Mesa and asked her if she wanted a job as Shuckers' bookkeeper. Woods had been the owner of Shuckers since 1986 through his ownership and control of the corporate entities (initially Shuckers Oyster Bar Too of Jensen Beach, Florida, Inc., and then NAT, Inc.) that owned the business. Mesa needed a job. She therefore accepted her brother's offer of employment, notwithstanding that she had no previous experience or training as a bookkeeper. When Mesa reported for her first day of work on November 19, 1992, she learned that Woods expected her to be not only the bookkeeper, but the general manager of the business as well. Mesa agreed to perform these additional responsibilities. She managed the day-to-day activities of the business under the general direction and supervision of Woods. After a couple of weeks, Woods told Mesa that it would be best if she discharged her managerial responsibilities through an incorporated management company. Woods had his accountant draft the documents necessary to form such a corporation. Among these documents were the corporation's Articles of Incorporation. Mesa executed the Articles of Incorporation and, on December 3, 1992, filed them with the Secretary of State of the State of Florida, thereby creating Petitioner TAN, Inc. TAN, Inc.'s Articles of Incorporation provided as follows: The undersigned subscribers to these Articles of Incorporation, natural persons competent to contract, hereby form a corporation under the laws of the State of Florida. ARTICLE I- CORPORATE NAME The name of the corporation is: TAN, INC. ARTICLE II- DURATION This corporation shall exist perpetually unless dissolved according to Florida law. ARTICLE III- PURPOSE The corporation is organized for the purpose of engaging in any activities or business permitted under the laws of the United States and the State of Florida. ARTICLE IV- CAPITAL STOCK The corporation is authorized to issue One Thousand (1000) shares of One Dollar ($1.00) par value Common Stock, which shall be designated "Common Shares." Article V- INITIAL REGISTERED OFFICE AND AGENT The principal office, if known, or the mailing address of this corporation is: TAN, INC. 9800 South Ocean Drive Jensen Beach, Florida 34957 The name and address of the Initial Registered Agent of the Corporation is: Linda A. W. Mesa 9800 South Ocean Drive Jensen Beach, Florida 34957 ARTICLE VI- INITIAL BOARD OF DIRECTORS This corporation shall have one (1) director initially. The number of directors may be either increased or diminished from time to time by the By-laws, but shall never be less than one (1). The names and addresses of the initial directors of the corporation are as follows: Linda A. W. Mesa 9800 South Ocean Drive Jensen Beach, Florida 34957 ARTICLE VII- INCORPORATORS The names and addresses of the incorporators signing these Articles of Incorporation are as follows: Linda A. W. Mesa 9800 South Ocean Drive Jensen Beach, Florida 34957 On the same day it was incorporated, December 3, 1992, TAN, Inc., entered into the following lease agreement with the trust (of which Woods was the sole beneficiary) that owned the premises where Shuckers was located: I, Michael Blake, Trustee, hereby lease to Tan, Inc. the premises known as C-1, C-2, C-3, C-4, 9800 South Ocean Drive, Jensen Beach, Florida for the sum of $3,000.00 per month. This is a month to month lease with Illinois Land Trust and Michael Blake, Trustee. Mesa signed the agreement in her capacity as TAN, Inc.'s President. She did so at Woods' direction and on his behalf. No lease payments were ever made under the agreement. 3/ The execution of the lease agreement had no impact upon Shuckers. Woods remained its owner and the person who maintained ultimate control over its operations. At no time did he relinquish any part of his ownership interest in the business to either Mesa or her management company, TAN, Inc. Mesa worked approximately 70 to 80 hours a week for her brother at Shuckers doing what he told her to do, in return for which she received a modest paycheck. Woods frequently subjected his sister to verbal abuse, but Mesa nonetheless continued working for him and following his directions because she needed the income the job provided. As part of her duties, Mesa maintained the business' financial records and paid its bills. She was also required to fill out, sign and submit to Respondent the business' monthly sales and use tax returns (hereinafter referred to as "DR- 15s"). She performed this task to the best of her ability without any intention to defraud or deceive Respondent regarding the business' tax liability. The DR-15s she prepared during the audit period bore NAT, Inc.'s Florida sales and use tax registration number. On the DR-15 for the month of December, 1992, Mesa signed her name on both the "dealer" and "preparer" signature lines. Other DR-15s were co-signed by Mesa and Woods. In April of 1993, Woods told Mesa that she needed to obtain a Florida sales and use tax registration number for TAN, Inc., to use instead of NAT, Inc.'s registration number on Shuckers' DR-15s. In accordance with her brother's desires, Mesa, on or about May 14, 1993, filed an application for a Florida sales and use tax registration number for TAN, Inc., which was subsequently granted. On the application form, Mesa indicated that TAN, Inc. was the "owner" of Shuckers and that the application was being filed because of a "change of ownership" of the business. In fact, TAN, Inc. was not the "owner" of the business and there had been no such "change of ownership." By letter dated June 22, 1993, addressed to "TAN INC d/b/a Shuckers," Respondent gave notice of its intention to audit the "books and records" of the business to determine if there had been any underpayment of sales and use taxes during the five year period commencing June 1, 1988, and ending May 31, 1993. The audit period was subsequently extended to cover the six year period from June 1, 1987 to May 31, 1993. Relying in part on estimates because of the business' inadequate records, auditors discovered that there had been a substantial underpayment of sales and use taxes during the audit period. The auditors were provided with complete cash register tapes for only the following months of the audit period: June, July, August and December of 1992, and January, February, March, April and May of 1993. A comparison of these tapes with the DR-15s submitted for June, July, August and December of 1992, and January, February, March, April and May of 1993 revealed that there had been an underreporting of sales for these months. Using the information that they had obtained regarding the three pre- December, 1992, months of the audit period for which they had complete cash register tapes (June, July and August of 1992), the auditors arrived at an estimate of the amount of sales that had been underreported for the pre- December, 1992, months of the audit period for which they did not have complete cash register tapes. The auditors also determined that Shuckers' tee-shirt and souvenir sales, 4/ Sunday brunch sales, cigarette vending sales, vending/amusement machine location rentals 5/ and tiki bar sales that should have been included in the sales reported on the DR-15s submitted during the audit period were not included in these figures nor were these sales reflected on the cash register tapes that were examined. According of the "Statement of Fact" prepared by the auditors, the amount of these unreported sales were determined as follows: TEE-SHIRT SALES: Sales were determined by estimate. This was determined to be $2,000/ month. No records were available and no tax remitted through May, 1993. SUNDAY BRUNCH SALES: Sales were determined by estimate. This was determined to be 100 customers per brunch per month (4.333 weeks). No audit trail to the sales journal was found and no records were available. CIGARETTE VENDING SALES: The estimate is based on a review of a sample of purchases for the 11 available weeks. The eleven weeks were averaged to determine monthly sales at $3/pack. VENDING MACHINE LOCATION RENTAL REVENUE: The revenue estimate is based on a review of a one month sample. TIKI BAR SALES: The sales estimate is based on a review of infrequent cash register tapes of February, 1993. The daily sales was determined by an average of the sample. The number of days of operation per month was determined by estimate. In addition, the auditors determined that TAN, Inc. had not paid any tax on the lease payments it was obligated to make under its lease agreement with Illinois Land Trust and Michael Blake, Trustee, nor had any tax been paid on any of the pre-December, 1992, lease payments that had been made in connection with the business during the audit period. According to the "Statement of Fact" prepared by the auditors, the amount of these lease payments were determined as follows: The estimate is based on 1990 1120 Corporate return deduction claimed. This return is on file in the Florida CIT computer database. The 1990 amount was extended through the 6/87 - 11/92 period. For the period 12/92 - 5/93 audit period, TAN's current lease agreement of $3,000/month was the basis. No documentation was produced during the audit supporting any the sales tax exemptions that the business had claimed during the audit period on its DR-15s. 6/ Accordingly, the auditors concluded that the sales reported as exempt on the business' DR-15s were in fact taxable. Using records of sales made on a date selected at random (February 1, 1993), the auditors calculated effective tax rates for the audit period. They then used these effective tax rates to determine the total amount of tax due. An initial determination was made that a total of $201,971.71 in taxes (not including penalties and interest) was due. The amount was subsequently lowered to $200,882.28. On or about December 22, 1993, TAN, Inc., entered into the following Termination of Lease Agreement with Ocean Enterprises, Inc.: TAN, Inc., a Florida corporation, hereby consents to termination of that certain lease of the premises known as C-1, C-2, C-3 and C-4 of ISLAND BEACH CLUB, located at 9800 South Ocean Drive, Jensen Beach, Florida, dated December 3, 1992, acknowledges a landlord's lien on all assets for unpaid rent; and transfers and sets over and assigns possession of the aforesaid units and all of its right, title and interest in and to all inventory, equipment, stock and supplies located on said premises 7/ in full satisfaction of said unpaid rent; all of the foregoing effective as of this 22nd day of December, 1993. FOR AND IN CONSIDERATION of the foregoing termin- ation of lease, OCEAN ENTERPRISES, Inc., a Florida corporation, hereby agrees to pay Linda Mesa, each month all of the net revenues of the operation of the bar and restaurant located on said premises, up to the sum of $15,000.00, for sales tax liability asserted against TAN, Inc. or Linda A. W. Mesa based upon possession or ownership of said premises or any of the assets located thereon, plus attorney's fees incurred in connection with defending or negotiating settlement of any such liability. Net revenue shall mean gross revenue, less operating expenses, includ- ing, but not limited to, rent, up to the amount of $5,000.00 per month, costs of goods sold, utilities, payroll and payroll expense and insurance. OCEAN ENTERPRISES, Inc. represents that it has entered into a lease of said premises for a term of five years commencing on or about December 22, 1993, pursuant to the terms and conditions of which OCEANFRONT [sic] ENTERPRISES, Inc. was granted the right to operate a restaurant and bar business on said premises. Ocean Enterprises, Inc., leases the property from Island Beach Enterprises, which obtained the property through foreclosure. TAN, Inc., has been administratively dissolved.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Revenue enter a final order withdrawing the contested and unpaid portions of the assessment issued as a result of Audit No. 9317210175, as it relates to TAN, Inc., and Linda A. W. Mesa. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 27th day of June, 1995. STUART M. LERNER 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 27th day of June, 1995.
Findings Of Fact Petitioner owns the Palm Beach El Cid Bar and the Fifty-One-O-One Bar in West Palm Beach. Mixed drinks are sold at these establishments. In both bars, the cash registers record each item rung up but do not state the prices of the drinks separately from the sales taxes incurred on account of their sale. When James A. Blalock acquired petitioner approximately five years ago, he computed the sales tax owing on a day's sales at the Palm Beach El Cid Bar by examining a cash register tape which reflected the sales. For the day Mr. Blalock made his item by item calculations, he computed sales tax at 4 percent on each item, which yielded a figure slightly in excess of 4.2 percent on aggregate sales. Mr. Blalock then "made a supposition" that multiplying gross receipts (the sum of aggregate sales and aggregate sales taxes) by one twenty- fifth (4 percent) would yield a figure which would approximate 4.2 percent of aggregate sales. This supposition is well founded, as reflected by the equation .042 = X(1 + .042), where X equals the number by which gross receipts are to be multiplied. After Mr. Blalock had done his calculations, he made the assumption that the results for that day would hold true generally for both bars, and instructed petitioner's employees to multiply gross receipts by one twenty-fifth (4 percent) in order to compute petitioner's sales taxes. Petitioner's employees did in fact calculate and pay sales taxes monthly on this basis from August 1, 1974, through September 30, 1976, on sales at the Fifty-One-O-One Bar, and from October 1, 1979, through September 30, 1976, on sales at the Palm Beach El Cid Bar. Since Mr. Blalock's calculations, however, the "price structure" at the bars has changed three times. Nobody now remembers what day of the week was chosen as the basis for the original calculations. Gross sales at the Fifty-One-O-One Bar from August 1, 1974, through September 30, 1976, amounted to two hundred twenty thousand four hundred ninety- one dollars and thirty cents ($220,491.30). On these sales, petitioner paid sales taxes of eight thousand seven hundred forty-three dollars and twenty-eight cents ($8,743.28). Gross sales at the Palm Beach El Cid Bar from October 1, 1973, through September 30, 1976, amounted to four hundred ninety-two thousand six hundred forty-one dollars. and sixty-four cents ($492,641.64). On these sales, petitioner paid sales taxes of nineteen thousand six hundred sixty-five dollars and ninety-one cents ($19,665.91). At both of petitioner's bars, a price list which sated, for each item, its cost without tax, the amount of sales tax, and its cost with sales tax, was kept next to the cash register, for employees' use. Ordinarily, these price lists were not visible patrons. At least since the fall of 1971, respondent has permitted dealers in mixed alcoholic beverages to pay a sales tax equal to their gross sales less the quotient. of gross sales divided by 1.045, whenever it is impractical to record the sales price of each drink separately from the tax collected on account of the sale of the drink, but only if the dealer displays a price list on which the dealer "indicate[s]. . . the cost of each item, the applicable amount of sales tax to each and the total price of the item." Petitioner's exhibit No. 2.
Recommendation Upon consideration of the foregoing, and in keeping with the teachings of McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st D.C.A. 1977), it is RECOMMENDED: That respondent cease and desist from applying the policy set forth in petitioner's exhibit No. 2 until and unless the same shall be duly adopted as a rule, in the manner provided by law. That petitioner pay respondent twenty-two thousand one hundred sixty- eight dollars and eighty-seven cents ($22,168.87) on account of sales at the Palm Beach El Cid Bar and nine thousand nine hundred twenty-two dollars and eleven cents ($9,922.11) on account of sales at the Fifty-One-O-One Bar, together with applicable penalties and interest, less sales taxes petitioner has already paid on account of the Palm Beach El Cid Bar for the period October 1, 1973, to September 30, 1976, and on account of the Fifty-One-O-One Bar for the period August 1, 1974, to September 30, 1976. DONE and ENTERED this 19th day of August, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. John E. Woodbery, Esquire Woodbery and Sapp 217 John Knox Road Tallahassee, Florida 32303 E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
The Issue Whether proposed Rules 61A-7.003, 61A-7.007, 61A-7.008, and 61A-7.009 constitute invalid exercises of delegated legislative authority, pursuant to Section 120.52(8), Florida Statutes,1/ for the reasons described by Petitioner in its Petition.
Findings Of Fact Petitioner and Intervenor are companies whose substantial interests will be affected by the proposed rules and they have standing to bring this rule challenge. The State of Florida, Department of Business and Professional Regulation (the Department), is the state agency responsible for adopting the proposed rules which are the subject matter of this proceeding. The Division of Alcoholic Beverages and Tobacco (the Division) is vested with general regulatory authority over the alcoholic beverage industry within the state. The Division issues both general and special alcoholic beverage licenses. See Chapters 561-565, Fla. Stat. The general licenses which permit consumption on the premises are: 1COP licenses which permit consumption of beer and certain wine and distilled spirit products; 2COP licenses which permit consumption of beer, wine, and certain distilled spirit products; and 4COP licenses which permit the consumption of beer, wine, and all distilled spirits. See §§ 563.02(1)(b)-(f), 564.06(5)(b), and 561.20(1), Fla. Stat. The 4COP licenses are known as quota licenses, are issued based on the population of the county, and are limited in number. § 561.20(1), Fla. Stat. Quota liquor licenses range in value, depending on the county involved, from a low of approximately $20,000, to a high of approximately $300,000. (stipulation of parties) The SBX or special bowling license is issued by the Division pursuant to Section 561.20(2)(c), Florida Statutes. The owner or lessee of a bowling establishment having 12 or more lanes and necessary equipment to operate them may obtain this special license which permits consumption of beer, wine, and distilled spirits. Alcohol can only be sold for consumption on the licensed premises. Another special alcoholic beverage license listed in proposed Rule 61A-7.003 is the 12RT license. The holder of such a license must be a caterer at a dog track, horse track, or jai alai fronton. In this context, Section 565.02(5), Florida Statutes, reads in pertinent part as follows: (5) A caterer at a horse or dog racetrack or jai alai fronton may obtain a license upon the payment of an annual state license tax of $675. Such caterer’s license shall permit sales only within the enclosure in which such races or jai alai games are conducted, and such licensee shall be permitted to sell only during the period beginning 10 days before and ending 10 days after racing or jai alai under the authority of the Division of Pari- mutual Wagering of the Department of Business and Professional Regulation is conducted at such racetrack or jai alai fronton. . . . Petitioner participated, to some degree, in the rule development process. The extent of that participation is unclear from the record. The text of the proposed rules as published in their final form in the Florida Administrative Weekly on October 10, 2003, is as follows: 61A-7.003 Premises Not Eligible For Smoking Designation. Licensed premises shall not be designated as a stand-alone bar if the qualifications for licensure require the premises be devoted predominantly to activities other than the service of alcohol. The following licenses are not eligible for a stand-alone bar designation: S = Special Hotel SH = Special Hotel in counties with population of 50,000 or less SR = Special Restaurant issued on or after January 1, 1958 SRX = Special Restaurant SBX = Special Bowling SAL = Special Airport SCX = Special Civic Center SCC = Special County Commission SPX = Pleasure, Excursion, Sightseeing, or Charter boats X = Airplanes, Buses, and Steamships IX = Railroad Cars XL = Passenger Waiting Lounge operated by an airline PVP = Passenger Vessels engaged in foreign commerce FEX = Special Public Fairs/Expositions HBX = Special Horse Breeders HBX = Special County Commission 11AL = American Legion Post permitted to sell to general public 11C = Social, Tennis, Racquetball, Beach, or Cabana Club 11CE = Licensed vendors exempt from payment of surcharge tax 11CS = Special Act Club License 11CT = John and Mable Ringling Museum 11GC = Golf Club 11PA = Symphony, Live Performance Theatre, Performing Arts Center 12RT = Dog or Horse Track or Jai Alai Fronton 13CT = Catering Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695 FS. History--New 61A-7.007 Formula For Compliance With Required Percentage of Gross Food Sales Revenues. In order to determine compliance, the division shall use the formula of gross food sales revenue, including but not limited to non-alcoholic beverages, divided by gross total sales revenue, in any consecutive six- month period. The results of the formula will represent the percentage of food sales revenues as defined herein and in s. 561.695, Florida Statutes. Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695(6) FS. History--New 61A-7.008 For Percentage of Gross Alcohol Sales Revenue Formula. In order to determine compliance, the division shall use the formula of gross alcohol sales revenue divided by gross total sales revenue, in any consecutive six-month period. Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695(6) FS. History--New 61A-7.009 Method Used to Determine Whether an Establishment is Predominantly Dedicated to the Serving of Alcoholic Beverages. In order to determine whether an establishment, other than one holding a specialty license designated in Rule 61A- 7.003, F.A.C., is predominantly dedicated to the serving of alcoholic beverages, the division shall compare the percentage of gross food sales revenue with the percentage of gross alcohol sales revenue. If the percentage of gross alcohol sales revenue is greater than that of the gross food sales revenue, an establishment is deemed predominantly dedicated to the serving of alcoholic beverages. Specific Authority 386.2125, 561.695(9) FS. Law Implemented 386.203(11), 561.695(1)(9) FS. History--New Article X, Section 20, Florida Constitution, was adopted by the electorate in 2002, and generally prohibits smoking in enclosed indoor workplaces. This constitutional provision includes certain exceptions from this general prohibition including the "stand-alone bar" exception. Section 20(d) instructs the Florida Legislature to adopt legislation to implement its provisions and specifies that the Legislature is not precluded from enacting any law constituting or allowing a more restrictive regulation of tobacco smoking than is provided in Section 20. The legislature implemented the constitutional amendment by amending Part II, Chapter 386, Florida Statutes. Section 386.204 prohibits smoking in enclosed indoor workplaces, except as provided in Section 386.2045. Section 386.2045 enumerates exceptions to the general prohibition, including the exception of a stand-alone bar. Section 386.2045(4), Florida Statutes, reads as follows: (4) STAND-ALONE BAR- A business that meets the definition of a stand-alone bar as defined in s. 386.203(11) and that otherwise complies with all applicable provisions of the Beverage Law and this part. A stand-alone bar is defined in Section 386.203(11) as follows: (11) 'Stand-alone bar' means any licensed premises devoted during any time of operation predominately or totally to serving alcoholic beverages, intoxicating beverages, or intoxicating liquors, or any combination thereof, for consumption on the licensed premises; in which the serving of food, if any, is merely incidental to the consumption of any such beverage; and the licensed premises is not located within, and does not share any common entryway or common indoor area with, any other enclosed indoor workplace, including any business for which the sale of food or any other product or service is more than an incidental source of gross revenue. A place of business constitutes a stand-alone bar in which the service of food is merely incidental in accordance with this subsection if the licensed premises derives no more than 10 percent of its gross revenue from the sale of food consumed on the licensed premises. Deborah Pender is the chief of licensing for the Division. According to Ms. Pender, the Division included the SBX or special bowling license in the list of special licenses that cannot qualify for stand alone bar status in proposed Rule 61A- 7.003 because its predominant business is a bowling alley. Similarly, the 12RT license was included because its predominant business is a racetrack: "Because that’s a specialty license that is issued at race tracks, and if it wasn’t a race track business, the caterer . . . couldn’t have a license anywhere else." Marie Carpenter is the chief of the Bureau of Auditing of the Division. According to Ms. Carpenter, the provision regarding the six consecutive months in proposed rules 61A-7.007 and 61A-7.008 was intended to give the Division enough of a period of time to get a good picture of whether the business met the criteria for compliance and to give licensees an opportunity to build up business records that were not previously required to be kept.2/ The licensee would be required to keep daily records. Ms. Carpenter acknowledged that in using the six month auditing period in the proposed rule, a licensee could exceed the 10 percent requirement on one or more occasions during the audit period. Sandy Finkelstein is President of Petitioner and is the operating partner of Shore Lanes Bowling Center in Merritt Island, Florida. According to Mr. Finkelstein, there is at least one bowling facility in Florida that was issued a 4COP license. A bowling facility with a 4COP license is not automatically excluded from the stand-alone bar designation, whereas a bowling facility with an SBX license is automatically excluded from the stand-alone bar designation by virtue of proposed rule 61A-7.003.
