Findings Of Fact Alfredo Thomas Santisi is an Italian-born chef who has had considerable experience in the restaurant business. Twelve years ago he worked at Picciolo's, a restaurant located at 136 Collins Avenue in Miami Beach, Florida. Until July 3, 1980, Samuel D. Picciolo managed the restaurant on behalf of a corporation he controlled, Picciolo's American-Italian Restaurant, Inc. (PAIR) During that time Mr. Picciolo and his wife, Dorothy L. Picciolo, owned the real property that housed the restaurant. Pending disposition of the present application for transfer, PAIR continues to hold a currently valid beverage license, No. 23-02198-4COP. On one of his visits to his former employer, Mr. Santisi learned that Mr. Picciolo was in failing health and desirous of leasing the restaurant. After Mr. Santisi had considered and rejected his offer to lease the restaurant, Mr. Picciolo offered to sell the restaurant for $540,000, including a down payment of $200,000. Mr. Santisi discussed this proposition with a business associate, Lee Banner. They decided they were interested, but finances were a problem; they could not raise the down payment on their own. Jorge L. Gonzalez, Esquire, had money at his disposal which was eventually used for the acquisition. After a welter of confusing and contradictory testimony (and documentary evidence, some of which had been altered), it remains a mystery just who has the beneficial ownership of that money. On or about June 3, 1980, Mr. Gonzalez offered the vice presidency of Arcala Investment, Inc., a Florida corporation (Arcala FL) to Alexander Prendes, who is married to Mr. Santisi's daughter Stella, and indicated that Arcala Florida would furnish the additional money necessary to acquire the restaurant from PAIR. All of the stock of Arcala Florida is owned by a second corporation that is organized under the laws of the Netherland Antilles, Arcala Investments NV (Arcala NV). Mr. Gonzalez introduced Mr. Prendes to Ranulfo Sosa, Jr., who became president of Arcala FL. Mr. Prendes served as vice president but had been replaced as vice president of Arcala Florida by Carlos Barbara as of June 30, 1980, by which time Mr. Prendes had become secretary of Arcala FL. Manuel Garces and Fernando Birbragher were managing directors of Arcala NV as of June 38, 1988. Respondent's Exhibit No. 1. On July 3, 1980, Lee Banner, as trustee, as to an undivided two-fifths, and Arcala Florida as to an undivided three-fifths interest, purchased the Picciolo's real property and all of PAIR's assets (except inventory), including PAIR's beverage license. Petitioner's Exhibit No. 2. Lee Banner took as trustee half for himself and half for Mr. Santisi so that each had a one-fifth beneficial interest. The sale price was $547,800.08. One hundred fifty thousand dollars ($150,000) of the two hundred thousand dollars ($200,000) paid to the Picciolos and PAIR, at or before closing, came through Mr. Gonzalez. Respondent's Exhibit No. 7. The parties agreed to a price of $20,000 for the inventory, but no money changed hands at that time. Instead, on July 3, 1980, petitioner Picciolo's Collins Avenue Corporation (and Lee Banner, as an accommodation maker) executed a note in favor of PAIR for twenty thousand dollars ($20,000), secured by petitioner's "interest as lessee in and to" the real property the Picciolos had sold earlier the same day to Arcala Florida and Lee Banner, as trustee. Petitioner's Exhibit No. 6. From this, it is inferred that petitioner leased the restaurant properly from Arcala Florida and Lee Banner on July 3, 1980, after they had acquired it from the Picciolos. On July 28, 1980, petitioner applied for a transfer of license No. 23- 8198 4-COP. Petitioner's Exhibit No. 1. According to supporting documents, petitioner's officers on July 3, 1980, were Lee Banner, president, Alexander Prendes, vice-president, and Alfredo Santisi, secretary-treasurer. Petitioner's Exhibit No. 4. Petitioner's stock was owned by Lee Bariner (20 percent), Alfredo Santisi (20 percent) sold Arcala FL (60 percent), according to the same source. Personal questionnaires filed by each of petitioner's officers on July 28, 1980, noted that Arcala Florida had invested $150,000 and that Messrs. Santisi and Banner had each invested $25,000 in petitioner. Petitioner's Exhibit No. 3. On August 4, 1980, Beverage Officer Carmen V. Gonzalez visited the restaurant and discovered that petitioner was selling alcoholic beverages and depositing the proceeds in its accounts. Beverage Officers Gonzalez and Eddie L. Alford returned to the restaurant on August 6, 1980. At that time Lee Banner and Alfredo Santisi assured them of the accuracy of the submissions made on July 28, 1980. On or before Friday, August 8, 1980, Officer Alford issued an official notice advising petitioner that it could not lawfully sell alcoholic beverages. Rene Valdes appeared at respondent's Miami office on August 11, 1980, seeking a temporary license for petitioner. At that time, Mr. Valdes represented that Arcala Florida had no interest in the beverage license or anything else other than the real property where the restaurant was located. On August 12, 1980, a temporary license issued. Also, on August 12, 1980, petitioner furnished respondent a copy of a bill of sale dated July 4, 1980, Respondent's Exhibit No. 2, purporting to reflect the sale of Beverage License No. 23-02198 4-COP, by Arcala Florida to petitioner for $35,000 with "$5,000,00 (Five Thousand Dollars) down Balance in 24 equal monthly installments of $1,250,00 (One Thousand Two Hundred Fifty Dollars), no interest." Respondent's Exhibit No. 2. On August 11 or 12, 1980, petitioner submitted a second certificate of incumbency reflecting that Alfredo Santisi and Lee Banner each owned 125 shares of petitioner's stock and that Alexander Prendes owned 250 shares of petitioner's stock. In a written statement dated September 23, 1980, Alexander Prendes explained that the 250 shares of petitioner's stock he held "represent[ed] the interest of ARCALA [FL] . . . to guarantee the full performance [sic] by PICCIOLO's COLLINS AVENUE CORP. . . . or the payment of the $35,000 dollars for the license and $20,000 dollars for the merchandise." Respondent's Exhibit No. 4. Mr. Prendes never paid any money for the stock. In an affidavit dated August 12, 1980, Alfredo Santisi stated that "the CERTIFICATE of INCUMBENCY and DECLARATION of STOCK OWNERSHIP submitted to the DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO on . . . July 8, 1980 were wrong and that that one submitted [sic] on August 11, 1980 is the correct one." Petitioner's Exhibit No. 20. After a dispute with Mr. Santisi and three principals of Arcala Florida about how to run the restaurant, Lee Banner sold his stock in petitioner to Ramulfo Soss, Sr. for $30,000. On January 6, 1981, petitioner caused a third certificate of incumbency and declaration of stock ownership to be filed with respondent, reflecting that Ranulfo Soss, Sr. and Alfredo Santisi each owned 250 shares of petitioner's stock. During the course of respondent's investigation, Mr. Gonzalez failed to keep two appointments he had made with beverage officers; petitioner's bookkeeper once refused to answer Officer Alford's questions, referring him to Mr. Valdes; and various letters and phone calls from petitioner's office to respondent went unanswered. See Respondent's Exhibit No. 5. After the initial temporary license had expired, respondent extracted an affidavit signed by Ranulfo Sosa, as president of petitioner, reciting that "the fingerprints and personal information pertaining to Fernando Birbragher and Manuel Graces shall be furnished within twenty-one (21) days of the issuance of a temporary permit Petitioner's Exhibit No. 11. On November 17, 1980, a second temporary license issued. On November 26, 1980, Mr. Gonzalez wrote respondent's Captain Harris asking that he "please send me a letter explaining why you need" Petitioner's Exhibit No. 9, fingerprints and personal information pertaining to Birbragher and Graces. By letter dated December 8, 1980, Captain Harris advised Mr. Gonzalez that respondent had concluded that Arcala NV had an interest in petitioner. Respondent's Exhibit No. 6. Petitioner never furnished respondent personal questionnaires pertaining to Graces or Birbragher or arranged to have either fingerprinted. A third temporary license issued on January 23, 1981. Petitioner's Exhibit No. 12. In an effort to show that Arcala Florida leased the real property housing the restaurant to petitioner, petitioner adduced not one but two (inconsistent) leases at the hearing. Under the terms of one lease, dated the "4st day of July, 1980," petitioner is supposedly obligated to pay $5,000 monthly as rent to Arcala FL. Petitioner's Exhibit No. 15. Under the terms of the other lease, dated August 8, 1980, and signed by Lee Banner on behalf of petitioner, petitioner is supposedly obligated to pay all taxes, assessments, insurance and upkeep on the building as rent. Petitioner's Exhibit No. 16. The later lease makes no mention of the former. Both are dated after the promissory note secured by petitioner's interest as lessee. According to Lee Banners testimony, however, there never was any Lens fide lease and petitioner never made any lease payments to Arcala FL. The only office Arcala Florida ever has had is a sort of closet off the kitchen of the restaurant.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner deny respondent's license. DONE and ORDERED this 21st of August, 1981, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of August, 1981. COPIES FURNISHED: Jorge L. Gonzalez, Esquire Suite 505 814 Ponce de Leon Boulevard Coral Gables, Florida 33134 Harold F. X. Purnell, Esquire Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact Petitioner is a Florida corporation doing business and having its principal place of business in Broward County, Florida. It holds an operating certificate as an air taxi/commercial operator issued by the Federal Aviation Administration on April 4, 1977. The certificate states that Petitioner has met the requirements of the Federal Aviation Act of 1958, as amended, and the rules prescribed thereunder for issuance of the certificate. The operating certificate was issued by the F.A.A. under 14 CFR 135. Petitioner is also registered as an air taxi operator with the Civil Aeronautics Board (C.A.B.) under 14 CFR 298. (Testimony of Jackson, Petitioner's Exhibit 2, Stipulation) Respondent's auditor conducted an audit of Petitioner's records for the period June 1, 1975 through July 31, 1978, and, on August 15, 1978, issued a Notice of Proposed Assessment of tax, penalties and interest under Chapter 212, Florida Statutes, in the total amount of $1,629.35 for alleged delinquent sales and use tax incurred during the audit period. The proposed assessment was based upon audit findings that Petitioner had purchased fuel, aircraft parts and repairs from a firm called Hansa Jet located at the Fort Lauderdale Hollywood Airport on which sales tax was allegedly due, but not paid thereon. Petitioner was not chartered as a corporation until March, 1977, and purchases prior to that time were made by Andy Jackson Yacht and Aircraft, Inc., which was a registered dealer under Chapter 212, Florida Statutes. Although the audit was based upon invoices in the possession of Petitioner, no effort was apparently made to check the records of the supplier, Hansa Jet, to ascertain whether it took tax exemption certificates from either firm. Several of the invoices reflected the sales tax number of Andy Jackson Yacht and Aircraft, Inc. Petitioner was not a registered dealer under Chapter 212, during the audit period. It was originally a division of Andy Jackson Yacht and Aircraft, Inc. and since 1977 has been a wholly owned subsidiary of that firm. (Testimony of Bravade, Jackson, Petitioner's Exhibit 7) By letter of September 12, 1978, Petitioner asked Respondent for an interpretation as to the applicability of the partial tax exemption of Section 212.08(9), Florida Statutes, to its operations. By letter of September 19, Respondent's audit bureau chief advised Petitioner that the exemption applied only to carriers holding certificates of convenience issued by the C.A.B. that establish routes, rates, and reports on operations on such routes. Petitioner thereafter requested a Chapter 120 hearing. (Petitioner's Exhibit 4) Prior to obtaining federal authorization to operate as an air taxi carrier, Petitioner was obliged to meet such preliminary requirements as acquisition of aircraft, insurance coverage, and the preparation of a detailed operations manual for the F.A.A. specifying the structure of the firm, and detailed provisions relating to personnel and operations. Its pilots have the same training and meet the same basic qualifications as those employed by other airlines, and its aircraft are periodically inspected by the F.A.A. under federal standards. Petitioner's place of business is located at the Fort Lauderdale- Hollywood International Airport and it maintains gate and counter space at the terminal. Its aircraft carry both passengers and cargo at published rates. Although it formerly flew scheduled routes to the Bahama Islands, it found these to be unprofitable and discontinued them. Approximately 95 percent of its business is in interstate and foreign commerce, and all of the purchases for which the taxes are presently asserted were for flights in such commerce. Petitioner is listed in the local telephone directory under the heading "Airline Companies." The listing shows destinations in the Bahama Islands and further states "Charter rates on request to all Caribbean and U.S. cities." It accepts passengers without discrimination who are willing to pay the specified rate for passage. It is a member of the Warsaw Pact on limitation of liability for international carriers. Petitioner will quote specific charter rates to a group to a particular place but gives the same rate to any other group desiring transportation to the same destination. Its operations are controlled by the F.A.A. in accordance with Petitioner's plan of operations. It aircraft fly twenty-four hours a day throughout the week. It has no continuing contracts for cargo or passengers. Although it has printed passenger tickets, these are not customarily used. Fares are paid in cash or through national credit cards. Petitioner is free to decline to fly passengers and cargo to a particular destination and exercises its discretion in this respect. It files regular annual reports to the C.A.B. on all of its revenue operations. (Testimony of Jackson, Petitioner's Exhibits 3, 6) Although Petitioner, as an air taxi operator, does not hold a C.A.B. certificate of public convenience and necessity under Section 401 of the Act, it is nevertheless viewed as a "common carrier" by that agency. The C.A.B. does not issue "licenses" to any category of air carrier but construes registration with it to be the same as a license. (Testimony of Untiedt, Petitioner's Exhibit 1)
Recommendation That Respondent revise its proposed assessment against Petitioner to encompass only those transactions occurring after Petitioner's date of incorporation, and enforce the same in accordance with law. DONE and ENTERED this 21st day of March, 1979, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Gaylord A. Wood, Jr. 603 Courthouse Square Building 200 South East 6th Street Fort Lauderdale,, Florida 33301 Maxie Broome, Jr. Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 John D. Moriarty Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32304
The Issue The issues to be determined in this proceeding are whether Petitioner is entitled to attorney's fees and costs pursuant to Section 57.111, Florida Statutes, and if so, in what amount?
Findings Of Fact Petitioner, McClellan Trucking Company, is a Florida corporation organized for profit. It is a family-owned trucking company located in Clermont, Florida, and constitutes a "small business party" within the meaning of Section 57.111, Florida Statutes (2008). On December 19, 2006, McClellan Trucking Company was notified that its account had been selected by DOR for a tax compliance audit with respect to payment of sales and use tax for the audit period beginning November 1, 2003 through October 31, 2006. The Notice of Intent to Audit Books and Records attached a copy of the Florida Taxpayers Bill of Rights, along with a Sales and Use Tax Information Checklist identifying the type of records required to be available during the audit. The Notice also included the following statement: VALID RESALE AND CONSUMER CERTIFICATES OF EXEMPTION (SALES TAX) Only valid certificates will be accepted during the audit process as proper documentation for exempt transactions. The Florida Courts have ruled that sales tax is a vendor's tax; therefore, if a valid certificate is not on file, the vendor is liable for the tax regardless to whom the sale is made or for what purpose. During the audit period, Petitioner purchased motor vehicles and parts for motor vehicles without paying any sales taxes at the time of purchase. This was accomplished by Petitioner's delivery of "resale certificates" to the selling dealer. Petitioner sought to self-accrue and remit use taxes on a pro-rated portion of the purchase price of the vehicles, pursuant to the partial exemption contained in Section 212.08(9)(b), Florida Statutes. The pro-rated exemption is a separate and distinct exemption from the sale for resale exemption. Under the pro- rated exemption, DOR allows licensed interstate common carriers who comply with the requirements of Florida Administrative Code Rule 12A-1.064 to pro-rate and pay tax on a portion of the purchase price of vehicles and related parts, with the tax being based upon the percentage of total mileage driven that is within Florida. For the time period covered by the audit, Petitioner McClellan Trucking Company was not registered as a dealer, although Mr. McClellan was registered individually. In addition, Petitioner did not have a license as a common carrier from the United States Department of Transportation, and did not have a direct pay permit from DOR. Once notified, Petitioner took steps to correct each of these deficiencies. On December 26, 2006, Petitioner became registered as a dealer, and on December 31, 2006, Mr. McClellan canceled the sole proprietorship registration. In January of 2007, Petitioner applied for a direct pay permit with DOR, which was granted May 3, 2007. Finally, Petitioner applied for and received a common carrier license from the United States Department of Transportation. Although these steps would serve to support the partial exemption from taxes for future purchases, because neither the direct pay permit or the common carrier license was in effect at the time of the purchases covered by the audit, any such purchases occurring during the audit period were determined not to be exempt. A Notice of Intent to Make Audit Changes (NOI) was presented to Mr. McClellan on May 3, 2007, indicating that sales and use taxes (with penalties and interest) were due in the amount of $139,841.32. The NOI includes the following notifications: If you do not agree or if you have questions about these audit adjustments: Do not sign this notice. Instead, request an audit conference to review the factual circumstances and reasons for the adjustments. You have until 06/04/2007 to request a conference. If you need an extension, submit a written request before the date referenced in the previous line. Your Rights. Information about Taxpayers Rights is enclosed explaining your options regarding the audit adjustments. Review your rights carefully. Take advantage of your right to an audit conference to discuss adjustments, if you have questions or disagree. Your right to an audit conference expires if we do not hear from you within 30 days of our issuing you this notice. We will then issue a Notice of Proposed Assessment for the audit, based on the adjustments outlined in this notice. After the Notice of Proposed Assessment has been issued, you have the right to review the audit findings through formal and informal protest procedures. Petitioner did not sign the NOI, but instead retained counsel who, on May 15, 2007, requested an audit conference. The audit conference was scheduled for and took place on June 7, 2007. At that time, Mr. McClellan argued that the Department should have notified him that his direct pay permit had expired, and disagreed with the rule requirement that it have a common carrier permit with the federal D.O.T. The audit assessment was upheld. Although Petitioner argued that Florida Administrative Code Rule 12A-1.064 was in conflict with Section 212.08(9)(b), Florida Statutes, Petitioner did not file a Petition pursuant to Section 120.56, Florida Statutes, seeking to invalidate the rule. Petitioner was notified by letter dated June 22, 2007, that penalties related to the assessment were waived, and that the audit file was being forwarded to the Tallahassee office, which would issue a Notice of Proposed Assessment. Petitioner received a new Notice of Intent to Make Audit Changes dated July 5, 2007, which indicated a total due of $141,521.29. This Notice continued to list penalties as part of the total. On July 10, 2007, Petitioner's counsel wrote to Fred Miller, the tax auditor, and questioned the failure to fully waive the penalty. On August 17, 2007, DOR issued a Notice of Proposed Assessment (NOPA). The NOPA waived all penalties and listed a balance due of $119,388.25. The NOPA also contained the following language: If you do not agree with the proposed assessment set forth in this notice, you may seek a review of the assessment through one of the following: (a) an informal written protest; (b) an administrative hearing; or (c) a judicial proceeding. Procedures for these various types of actions are set forth in the enclosed brochure. If you elect to file an informal written protest, your protest must be filed with the Department no later than 10/16/2007, unless you request and receive an extension prior to this date. If an informal written protest is not timely filed, the proposed assessment will become a FINAL ASSESSMENT on 10/16/2007. If you choose to request either an administrative hearing or judicial proceeding, your request must be filed no later than 12/17/2007 or 60 days from the date the assessment becomes a Final Assessment. This time limit is mandated by statute and cannot be waived by the Department. The petition for an administrative hearing must be filed with the Department. For judicial proceedings, a complaint must be filed with the appropriate Clerk of the Court. On September 20, 2007, Petitioner filed a Written Protest. The protest contained the following arguments: 1) that confusion over Petitioner's status as a common carrier was caused by Adrian McClellan's registration as a sole proprietor as opposed to Petitioner's registration as a corporation; and 2) that this technical error resulted in Petitioner's loss of common carrier status that would permit the partial exemption based on Petitioner's common carrier status. The Written Protest was forwarded to the Department's Technical Assistance and Dispute Resolution Section. On January 16, 2008, counsel for Petitioner forwarded to Matt Crockett, an employee in the Technical Assistance and Dispute Resolution Section, additional documentation, including copies of leases showing that McClellan leased a fleet of approximately 30 trucks to Watkins Motor Lines, now FedEx. However, Petitioner continued to argue for the pro-rated exemption based upon common carrier status. On January 29, 2008, DOR issued a Notice of Decision (NOD) upholding its original assessment. The NOD discusses whether Petitioner is liable for Florida sales tax on purchase transactions in which the taxpayer pro-rated the tax due on tangible personal property purchased for use in interstate commerce, and determines that Petitioner is not entitled to the exemption. The NOD contains the following notice of taxpayer appeal rights: This Notice of Decision constitutes the final decision of the Department unless a Petition for Reconsideration is filed on a timely basis, in which event the Notice of Reconsideration will be the Department's final decision. The requirements for a Petition for Reconsideration are set forth below. * * * Absent a timely-filed Petition for Reconsideration, the assessment reflected in the Notice of Decision is final and you have three alternatives for further review: Pursuant to Section 72.011, F.S., and Rule Chapter 12-6, F.A.C., you may contest the assessment in circuit court by filing a complaint with the clerk of the court. . . . . 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 . . . . Pursuant to Section 120.68, F.S., you may contest the assessment in the appropriate district court of appeal . . . . On February 28, 2008, Petitioner submitted a Petition for Reconsideration. The Petition for Reconsideration continued to advocate for the partial exemption based upon Petitioner's asserted common carrier status. The Petition for Reconsideration referenced Petitioner's leases to FedEx, which is a licensed common carrier. On April 9, 2008, Petitioner provided a Supplement to its Petition for Reconsideration. This supplement contained the following arguments: 1) Petitioner was not required to be registered with the Federal Motor Carrier Safety Administration (FMCSA) during the audit period because the Petitioner leased the motor vehicles to a common carrier registered with FMCSA, and therefore, the vehicles were operated by a common carrier; and 2) Petitioner has complied with Florida Administrative Code 12A-1.064 except for the requirement that it have direct pay authority, which it should be excused for based upon misleading information received from the Department. On May 21, 2008, DOR issued its Notice of Reconsideration (NOR). In the NOR, the Department determined that no assessment was due. The NOR states in pertinent part: Taxpayer presents a new argument upon reconsideration. Taxpayer argues that it purchased motor vehicles exclusively for leasing purposes during the audit period and then leased these vehicles to Watkins Motor Lines (Watkins). Accordingly, Taxpayer believes that the vehicles were exempt from Florida Sales Tax at the time of purchase. Taxpayer has offered to supply affidavits from Watkins' employees supporting Taxpayer's claims. * * * Based on the history and current wording of the statutes, the proper interpretation of s. 212.08(9)(b), F.S., is that it is intended to reach motor vehicles owned or leased by operators that are common carriers. Due to the retention of the common carrier requirement, many owner operators may not qualify for taxation under the proration statute, because they are contract carriers rather than common carriers. There is a misconception that owner operators that contract with a common carrier are entitled to the benefits of the proration statute due to the common carrier status of the other party to the contract. That is not the case. The Legislature opened the door for contract carriers to qualify after the ICC was abolished and then reinstated the common carrier requirement during the next legislative session, which indicates clear intent not to extend the exemption to those who operate as contract carriers (even if they contract exclusively or primarily with common carriers). In order to determine whether a particular owner operator is eligible for the partial exemption, it is necessary to define the terms "common carrier" and "contract carrier." In Ruke Transport Line, Inc. v. Green, 156 So. 2d 176 (Fla. 1st DCA 1963), the court noted that a common carrier must offer his services to the public generally and on the same terms for all. A common carrier is "bound to serve all who apply and is liable for refusal, without sufficient reason to do so." A contract carrier, on the other hand, engages in transport for hire but can choose whether or not to accept any particular engagement and the terms upon which to accept it. During the audit period, Taxpayer provided transport services to one company, Watkins, on a contract basis. Taxpayer has failed to provide any evidence that it transported persons or property for pay to anyone at anytime as a common carrier. Moreover, Taxpayer has failed to provide evidence that it maintained a regularly scheduled service for the general public while it was under contract with Watkins. As a result, the Department determined in Taxpayer's Notice of Decision that Taxpayer's activities were those of a contract carrier. Taxpayer now argues that it purchased its motor vehicles exclusively for leasing purposes and leased the vehicles to Watkins. Upon further consideration, of Taxpayer's new arguments and close inspection of Taxpayer's "Equipment Lease and Operating Contract," (the Agreement) with Watkins Motor Lines, Inc. (Watkins), the Department has determined that Taxpayer leased its motor vehicles to Watkins. * * * The collective terms of the Agreement reveal Taxpayer's intent to lease its vehicles to Watkins. Rule 12A-1.072(2)(a), F.A.C., states that tangible personal property purchased exclusively for leasing purposes by a dealer registered with the Department at the time of purchase may be purchased tax- exempt. The purchasing dealer is required to issue a copy of the dealer's Annual Resale Certificate to the selling dealer at the time of the purchase in lieu of paying tax, as provided in Rule 12A-1.039, F.A.C. It is clear that Taxpayer's vehicles, purchased exclusively for leasing to common carriers, were not taxable at the time of sale, because Taxpayer tendered a copy of its resale certificate to its dealers. . . . After purchasing motor vehicles and parts in Florida, Taxpayer erroneously remitted sales tax to the Department at an apportioned rate during the audit period. Consequently, Taxpayer is eligible for a refund of tax paid in error to the Department. . . . Since Taxpayer leases motor vehicles to common carriers, Taxpayer must collect Florida Sales Tax on the lease payments received from its customers. . . . . Neither party sought review or further hearing on the Notice of Reconsideration. Therefore, the decision became final. No administrative complaint pursuant to Chapter 120, Florida Statutes, was ever filed against Petitioner. No complaint in circuit court was ever filed by the Department against Petitioner. No final order was ever filed with the agency clerk. No notice of voluntary dismissal was ever filed. There was a settlement of all issues that resulted in the elimination of the amount of tax due. Throughout the process, Petitioner advocated for the application of the pro-rated tax exemption for common carriers. It did not assert an entitlement to the sale for resale or lease exemption. Petitioner served a Petition for Attorney's Fees and Costs pursuant to Section 57.111, Florida Statutes, on July 29, 2008. The Petition was filed with the Department of Revenue, as opposed to the Division, on August 4, 2008. Petitioner was a small business party within the meaning of Section 57.111, Florida Statutes, during the audit period. Petitioner is seeking reimbursement of $15,969.00 in attorney's fees and $1,765.00 in costs. The parties have stipulated that the amount of attorney's fees and costs sought is reasonable.
