The Issue Whether either Petitioner is entitled to Unclaimed Property Account Number 108502717.
Findings Of Fact The Department receives unclaimed property and disburses that property from the State of Florida Treasury to the rightful owners. During the last fiscal year, the Department's Bureau of Unclaimed Property received in excess of $300,000,000 of unclaimed property, and paid claims in excess of $212,000,000. The Department has the duty to evaluate the merits of each claim for unclaimed property and to pay only those claimants who can establish, by a preponderance of the evidence, that they are the rightful owners of the unclaimed property. Anja Sova was born in 1921 in Finland, but resided in Lake Worth, Florida. Her husband's brother was married to Iina Sova, who resided in Finland. Anja Sova opened several accounts with different banks during her lifetime; two of those accounts were opened at Washington Mutual Bank, and she designated Iina Sova, her sister-in-law, and Silja Lappalainen, her grand-niece and Iina's granddaughter, as joint pay-on-death beneficiaries. In January 2001, at the age of 79, Anja Sova opened a Certificate of Deposit (CD) account with Sterling Bank, depositing $95,000.00 in the account. The CD designated the pay- on-death beneficiary as Silja Sova. Anja Sova signed the signature card for this CD three times, once right next to the name of the designated beneficiary, Silja Sova. The bank had no other information as to the beneficiary. Anja Sova died in a car accident in 2002. The accounts with Washington Mutual were paid to the designated beneficiaries, her sister-in-law, and her grand-niece. Unclaimed Property Account Number 108502717 consists of the matured Sterling Bank CD, worth $127,031.97, and designates Silja Sova as the pay-on-death beneficiary. It had been held by Sterling Bank until its remittance to the Department as unclaimed property. American Research is a corporate claimant representative, and represents the residual heirs of Anja Sova's estate. Choice Plus is also a corporate claimant representative, and represents Silja Lappalainen, Anja Sova's grand-niece. American Research ran searches through various private, social, and governmental databases in the United States, and found no person named Silja Sova. In 2013, American Research also requested and received an Extract from the Population Information System in Finland. This database was created in 1969. The Extract revealed one person named Silja Sova; that person is a child born in 2009, who lives in Finland. No credible evidence was presented on whether the Extract includes only living persons, or if it also includes deceased persons (persons who were born between 1969 and 2001 and died before November 2013, when the search was done through the Extract). American Research argued that Silja Sova simply does not exist. It is unknown, however, whether Anja Sova's husband had more brothers with the surname Sova, or whether Anja Sova's father-in-law had brothers. The undersigned cannot find, given the scant evidence presented, that Silja Sova does not exist, and never existed, in Finland. American Research also proposed the theory that Anja Sova purposely created a fictitious name when designating Silja Sova as the beneficiary. There was no credible evidence presented to support this theory, either; it was mere speculation. An Order for Subsequent Administration was entered by a probate court in Palm Beach County, Florida, on April 11, 2013. It establishes the residual beneficiaries of Anja Sova's estate, but it does not include Silja Lappalainen, Anja Sova's surviving grand-niece. Choice Plus was also unable to locate a person named Silja Sova, and argued that the CD mistakenly designated the pay-on-death beneficiary as Silja Sova when it should have read Silja Lappalainen, Anja's grand-niece who had also been a beneficiary on the Washington Mutual accounts. Curiously, Choice Plus represents Silja Lappalainen, but did not offer testimony from her at the hearing.1/ Instead, Choice Plus offered into evidence an affidavit from Iina Sova, the deceased's sister-in-law, disclaiming any interest in the account. The affidavit is not found credible or reliable; it is written in a language that the affiant did not speak, there is no indication that a certified translator was present while the statement was being made, and the affidavit is replete with hearsay. Unfortunately, there was no credible evidence presented to support Choice Plus's argument that the designation of Silja Sova as the pay-on-death beneficiary was indeed a mistake that a then 79-year-old great-aunt made. The record is void of any credible evidence which meets the preponderance of the evidence standard, entitling either Petitioner to Unclaimed Property Account Number 108502717.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that American Research and Investigations, Inc.'s claim for Unclaimed Property Account Number 108502717 be DENIED. It is also RECOMMENDED that Choice Plus, LLC's claim for Unclaimed Property Account Number 108502717 be DENIED. DONE AND ENTERED this 18th day of April, 2014, in Tallahassee, Leon County, Florida. S JESSICA E. VARN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of April, 2014.
The Issue Whether the decision to award the bid for Parcel No. 93S101, State Road 84 Spur, was in accordance with the governing rules and statutes or was arbitrary, capricious, or contrary to competition.
Findings Of Fact In October of 1993 the Respondent declared that a spur property located at State Road 84 (the subject matter of these proceedings) was a surplus parcel. Such property is comprised of two identifiable tracts identified in this record as parcel 101-A and parcel 101-B. The Respondent utilizes a manual entitled "Disposal of Surplus Real Property" as its guide for the procedures used to comply with statutory and rule provisions regarding the disposal of surplus parcels. Since 1993 the Department has made several attempts to market the spur property. Such attempts included offering parcel 101-A to the Petitioner for no consideration. As recently as October of 2000 the Department offered the spur property to the Petitioner at no cost. The offer did include some conditions but same did not materially affect whether or not Davie would or could accept the transfer. For whatever reasons, the Petitioner did not accept the offer. Subsequently, the Respondent withdrew the offer in writing. Additionally, the Respondent notified the Petitioner that it intended to make the spur property (both parcels) available to the public through the competitive bid process. It was contemplated that the bid process would allow any person from the public to competitively place bids for the subject property. Nevertheless, the Petitioner was advised that it would be given an opportunity to acquire the property. A letter of February 7, 2001, from the Department to the Petitioner advised the town of its right to acquire the property but did not in any manner prohibit or prevent the Town of Davie from bidding on the spur property. In fact, the Petitioner did not bid on the subject property. Further, the Petitioner did not and does not intend to purchase the subject property. The only way the Intervenor seeks to acquire the property is without cost. The Petitioner had actual knowledge of the Department's intention of making the property available through competitive bid. The Town of Davie did nothing to oppose the bid process. On May 30, 2001, the spur properties were advertised for competitive bidding with sealed bids to be opened by the Department on June 14, 2001. On June 21, 2001, the Town of Davie by and through its town administrator contacted the Department in order to exercise the town's right of refusal on the property. Accordingly, on June 25, 2001, the Respondent posted a notice stating it would reject all bids. On July 12, 2001, the Respondent notified the Petitioner that it had ten days to exercise its right to purchase the property. In connection with the proposed sale the Department offered the property to the Town of Davie at the approved appraised value of $1.9 million. The Petitioner made no counter-offer. Instead, on July 27, 2001, the Town of Davie responded to the offer stating it would accept the parcel for a public purpose for no consideration. Thereafter, the Respondent posted a "Revised Bid Tabulation" indicating it would award the spur property to the highest responsive bidder, the Intervenor. The Petitioner has not proposed to pay for the spur property. The Petitioner did not have an appraisal of the spur property prepared. The Petitioner did not bid on the spur property.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent enter a final order confirming the award of the spur property to the Intervenor. DONE AND ENTERED this 7th day of February, 2002, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 7th day of February, 2002. COPIES FURNISHED: Michael T. Burke, Esquire Johnson, Anselmo, Murdoch, Burke & George, P.A. 790 East Broward Boulevard, Suite 400 Post Office Box 030220 Fort Lauderdale, Florida 33303-0220 Joseph W. Lawrence, II, Esquire Vezina, Lawrence & Piscitelli, P.A. 350 East Las Olas Boulevard Suite 1130 Fort Lauderdale, Florida 33301 Brian F. McGrail, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0450 Thomas F. Barry, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building, MS 58 605 Suwannee Street Tallahassee, Florida 32399-0450
The Issue The issue is whether Petitioner is entitled to the previously unclaimed property held by Respondent in the form of cash realized from the sale of 24 shares of AT&T.
Findings Of Fact Originally residents of New Hampshire, the now-deceased Flora and William Keniston vacationed annually in Tampa. During their visits, they became good friends with Herman Ortmann. At some point, Mr. Ortmann suggested to Mr. and Mrs. Keniston that they share his home with him--rent-free--during their annual September-to-April stay in Florida. The Kenistons accepted his suggestion and, for five or six winters, occupied Mr. Ortmann's home, which is located at 3102 Paul Avenue. Mr. Ortmann died on March 8, 1966. In his will, Mr. Ortmann left five dollars to his son and the residue of his estate to Petitioner, who was his cousin. On December 19, 1966, Petitioner, as executrix of Mr. Ortmann's estate, conveyed all interest in the Paul Avenue property to Mr. Keniston for $5500. On the same date, Mr. Keniston conveyed the fee simple interest in the Paul Avenue property, subject to a life estate in himself, to Petitioner and her husband. After the sale of the Paul Avenue property, Petitioner helped the Kenistons, who did not have a car, with many chores, such as taking them to buy groceries, attend church, and get hair cuts. On November 15, 1975, Mr. Keniston died. Following Mr. Keniston's death, Petitioner helped Mrs. Keniston, who no longer had a legal interest in the Paul Avenue property, find a new residence in a home shared by several unrelated adults of similar age. Petitioner testified that Mrs. Keniston lived several years in this home; however, her death certificate states that she died on October 4, 1976-- less than one year after the death of her husband. By operation of law, Petitioner and her husband acquired the fee simple interest in the Paul Avenue residence upon Mr. Keniston's death, and Petitioner remains in the house today. When Mrs. Keniston moved from the Paul Avenue property, she handed Petitioner two certificates evidencing ownership of 12 shares, each, in American Telephone and Telegraph Company (ATT). Mrs. Keniston instructed Petitioner to use these stock certificates to pay for Mrs. Keniston's funeral and "keep the rest." However, Mrs. Keniston, who was the sole registered owner of both certificates, never executed any instrument transferring an interest in these certificates to Petitioner. After delivering the certificates to Petitioner, Mrs. Keniston continued to receive and cash her monthly dividend checks of approximately $28. After Mrs. Keniston's death, Petitioner bought her a casket and paid for the funeral, at a total cost of about $3000. Petitioner retained the original stock certificates, but, after obtaining legal advice, determined that the she could not sell the certificates due to the absence of an assignment. Petitioner did not file a claim against the estate of Mrs. Keniston for reimbursement of the $3000, and Petitioner has not otherwise been reimbursed for these expenses. Petitioner has retained the original stock certificates. At some point, ATT transferred either the stock-- presumably by replacement stock certificates--or its cash equivalent to Respondent as unclaimed property; the value of the property at the time of the transfer was $1154.70. If ATT transferred the stock to Respondent, Respondent has since sold it. Either way, Respondent maintains the cash derived from the sale of the ATT stock in a noninterest-bearing account. Due to periodic payments received since its transfer to Respondent-- probably dividend payments earned prior to Respondent's sale of the stock--the current value of the account is $3081.04 (Account). Mrs. Keniston died intestate. By Order of Summary Administration entered May 24, 2000, the Hillsborough County Circuit Court, Probate Division, ordered an immediate distribution among four persons of Mrs. Keniston's assets, which consist of the Account. The order states that all interested persons were served with notice of the hearing or waived notice of the hearing, even though neither Petitioner nor Respondent seems to have received notice of the hearing. The order acknowledges that Respondent holds the Account and authorizes persons holding any property of the decedent to transfer it, pursuant to the order. On June 16, 2000, the representative of the four heirs named in the probate order filed with Respondent a claim of ownership of the Account. On June 1, 2000, Petitioner filed with Respondent a claim of ownership of the Account. Determining that Mrs. Keniston was the actual owner of the Account, Respondent concluded that her four heirs were entitled to the Account. On May 8, 2001, Respondent filed with the probate court a Motion to Vacate Order and Reopen Summary Administration. The probate court had not taken any additional action by the time of the final hearing in this case.
Recommendation RECOMMENDED that the Department of Banking and Finance enter a final order awarding the Account to Petitioner. DONE AND ENTERED this 14th day of June, 2001, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 2001. COPIES FURNISHED: Honorable Robert F. Milligan Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level 09 Tallahassee, Florida 32399-0350 Robert Beitler, General Counsel Department of Banking and Finance Fletcher Building, Suite 526 101 East Gaines Street Tallahassee, Florida 32399-0350 Denise Douglas Qualified Representative 2616 Jetton Avenue Tampa, Florida 33629 Staci A. Bienvenu Assistant General Counsel Department of Banking and Finance Fletcher Building, Suite 526 101 East Gaines Street Tallahassee, Florida 32399-0350 Linda Dunphy, Esquire Post Office Box 16008 West Palm Beach, Florida 33416
Findings Of Fact Steven R. Myer is a registered real estate broker and at the time relative to the complaint was a registered real estate salesman. Jerome Myer, the brother of Steven Myer, became interested in purchasing real property described as Lot 31, Block 7, Royal Palm South, Section 2, Broward County. Jerome Myer entered into negotiations with Mort Lynn as representative for Mark Builders, Inc., owners of the property. As a result of negotiations between Jerome Myer and Mort Lynn, Jerome Myer negotiated the purchase of the aforesaid property for $51,600. Mort Lynn advised Jerome Myer that because he (Jerome Myer) had not been in Florida for a long time, he would more easily obtain mortgage financing if he and his brother Steven Myer joined in the contract for the purchase of the aforesaid property. Thereafter, Steven and Jerome Myer contracted to purchase the aforesaid property for $51,600. When Jerome Myer applied for mortgage financing on the aforesaid property at Chase Federal Savings and Loan, he was advised that his credit was good enough that his brother, Steven Myer, would not have to be included in the transaction. At this point the brothers, Steven and Jerome, agreed that Steven Myer would not participate in the transaction, and that Jerome Myer would obtain title to the property in his name alone. Jerome Myer notified Mort Lynn of Mark Builders of his intentions in this regard and contacted his attorney regarding whether it would be necessary for Steven Myer to assign his interest in the Contract for Purchase to him. The attorney advised Jerome Myer that this was unnecessary unless for some reason Jerome questioned his brother's integrity. Because Jerome was close to Steven and did not have any doubts about his brother's involvement in the transaction, an assignment was not made. Jerome Myer was contacted by Cloys and Vena Kerbo subsequent to a home being built on the aforesaid property. The Kerbos were interested in seeing the home; and because Jerome Myer was unable to leave his work at the time, he asked his brother Steven to show the Kerbos the home. Steven showed the Kerbos the home but the Kerbos did not evidence an interest in the home. Steven advised the Kerbos that as salesman for Berg Agency he knew of other homes which he could show them; and pursuant toe their request, they were shown homes brokered by Berg Agency. Jerome's home was not brokered by the Berg Agency for whom Steven was a salesman. Subsequently, the Kerbos contacted Jerome Myer and a price fob the home was eventually negotiated. Jerome Myers acquired blank forms for a contract to buy and a deposit receipt from an office supply house and his wife typed the agreement between the Kerbos and Jerome on these forms as dictated by Jerome. The executed Contract to Buy and deposit receipt, Exhibit 1, was executed by the Kerbos and Jerome Myer. While the Kerbos and Jerome Myer met at the office of Berg Agency to execute the contract, neither Steven Myer nor Berg Agency participated in the transaction. Cloys Kerbo made and delivered a check in the amount of $1,000 to Jerome Myer as an earnest money deposit on the aforesaid Contract to Buy. This check was deposited by Jerome Myer into his personal account. Beyond the initial showing of the home to the Kerbos, there is no evidence that Steven Myer participated in the negotiation of, preparation of, or execution of the Contract for Purchase between the Kerbos and his brother, Jerome Myer. All negotiations and preparation of the Contract for Purchase were handled by Jerome Myer as owner of the property in question.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Florida Real Estate Commission take no action against the registration of Steven Myer. DONE and ORDERED this 26th day of October, 1976 in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 George R. Moraitis, Esquire Post Office Box 11104 Suite 208 2631 East Oakland Park Boulevard Fort Lauderdale, Florida 33339 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION UPTON B. MACKALL, Plaintiff, vs. PROGRESS DOCKET NO. 2845 BROWARD COUNTY STEVEN R. MYER, DOAH CASE NO. 76-1451 Defendant. /
The Issue Whether Petitioner should be granted a refund of sales tax, penalty and interest paid under Chanter 212, Florida Statutes, pursuant to Section 215.26, Florida Statutes. This proceeding was conducted without the appearance of witnesses. The parties stipulated to the facts and issues in the case and said stipulation agreed that the record would further consist of the pleadings, interrogatories, requests for admission, and affidavits. Five exhibits were received in evidence as follows: stipulation (Exhibit 1), affidavit of Neal J. Burmeister (Exhihit 2), affidavit of Lewis O. Ward (Exhibit 3), service contract and invoice (Exhibit 4), affidavit for attorney's fees (Exhibit 5).
Findings Of Fact The stipulation of the parties (Exhibit 1) reads as follows:
Recommendation That Petitioner's claim for refund of taxes, penalty and interest paid pursuant to Chapter 212, Florida Statutes, be denied by Respondent Comptroller of the State of Florida. DONE and ENTERED this 19th day of July, 1979, in Tallahassee, Florida. COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Post Office Box 5557 Tallahassee, Florida 32301 Robert S. Goldman, Esquire Thompson, Wadsworth, Messer, Turner, and Rhodes 701 Lewis State Bank Building Post Office Box 1876 Tallahassee, Florida 32302 Office of Comptroller State of Florida Attn: Eugene J. Cella General Counsel The Capitol Tallahassee, Florida 32301 Department of Revenue Attn: John D. Moriarty Room 104 Carlton Building Tallahassee, Florida 32301 THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact On January 15, 1975, Gerardo Benesch, Jitka Benesch, H. Albert Grotte, Regina Grotte, Milorad Dordevic, Catalina Dordevic, Milodrag Savovic and Marina Savovic executed an agreement associating themselves in a general partnership, Andean Investment Company. The stated purpose of the partnership was to engage in the business of real estate development, selling, renting, and dealing generally in real estate of all kinds. It was recited in the agreement that, by forming the partnership, the parties wished to reduce their prior expense of managing separate properties through separate managerial agreements. To this end, they transferred certain real estate by quit-claim deed to the partnership, and these properties represented its capital. The agreement provided in Article IV that the net profits or net losses of the partnership would be distributed or chargeable, as the case might be, to each of the partners in percentage proportions based on the amount of their investment in the partnership. The property consisted of warehouses located in Deerfield Beach and Fort Lauderdale, Florida, from which rentals were derived (Petition and Exhibits thereto). All of the properties were encumbered by mortgages of varying amounts and all but two of the quit-claim deeds transferred title subject to the mortgage thereon. Two deeds provided specifically that the partnership assumed the existing mortgage. Although Petitioner's counsel states that this was not intended and was a "scrivener's error", Petitioner partnership has, in fact, made the mortgage payments on all of the properties since their transfer under the aforesaid deeds (Composite Exhibit 1, Stipulation). Petitioner paid only minimal documentary stamp tax on the deeds. Respondent thereafter issued four proposed Notices of Assessment of Documentary Stamp Tax, Surtax, and Penalty against the Petitioner on January 6, 1976, in the total amount of $3,797.00. The tax was computed under Rule 12A-4.13(10)(c), F.A.C., based on transfers of realty (Composite Exhibit 2, Testimony of Dahlem). At the hearing, Petitioner disputed the manner in which Respondent had computed the documentary stamp tax in that each assessment dealt with a husband and wife who held individual percentage interests in the net worth of the partnership. Respondent's computation did not take into consideration the double interest in each assessment. The parties therefore agreed that a recomputation would be made by Respondent and submitted as a late-filed exhibit. This was done and the new computation reflects a total tax liability, including surtax and penalty, in the total amount of $4,053.40 (Composite Exhibit 3).
Recommendation That Petitioner's request for relief from tax liability be denied, and that Petitioner's liability for documentary stamp tax, surtax, and penalties in the total amount of $4,053.40 be sustained. DONE and ORDERED this 26th day of May, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 Allan F. Meyer, Esquire Suite 1500 Post Office Box 14310 Ft. Lauderdale, Florida 33302 Zayle A. Bernstein, Esquire Post Office Box 14310 Fort Lauderdale, Florida 33302
The Issue The issue is whether Petitioner is subject to tax based on a lease or license to use real property pursuant to Sections 212.031, 212.054, and 212.55, Florida Statutes.
Findings Of Fact Jack and Joan Peoples bought and began operating a bait and tackle shop/fish camp in Jacksonville, Duval County, Florida, in approximately 1971. The name of the business was Clark's Fish Camp and Seafood. As the business grew, Mr. and Mrs. Peoples began operating a restaurant in the shop. Initially, they lived on the business premises in an apartment adjoining the shop. When the restaurant became more successful, the restaurant was enlarged to include the apartment area and the family bought a home at another location. In January 1990, Mr. and Mrs. Peoples incorporated their business as a Florida Subchapter S Corporation. Pursuant to the organizational minutes, Mr. Peoples was elected president and Mrs. Peoples was elected vice-president and secretary. Petitioner issued common stock to Mr. and Mrs. Peoples as the sole shareholders, each owning a 50 percent interest, in exchange for the good will and name of Clark's Fish Camp and Seafood. Mr. and Mrs. Peoples did not transfer any real property, fixtures, or equipment to Petitioner. At all times material to this case, Mr. and Mrs. Peoples or Mrs. Peoples, in her sole capacity, owned the real property and fixtures utilized by Petitioner in the operation of the restaurant business. At all times relevant here, Mrs. Peoples acted as hostess, cook, and/or manager for the business. She controlled Petitioner's checkbook along with her kitchen manager, Florence Hatfield, and general manager, Steve Morris. During the audit at issue here, Russ Deeter, an accountant, and his associate/former employee, Maxine Downs were responsible for performing all of Petitioner's formal bookkeeping. Mr. Deeter had served as Petitioner's bookkeeper since the early 1970s. He sold his accounting business to Ms. Downs in 1981, but he continued to assist her with the routine bookkeeping for certain clients including Petitioner. Pursuant to the arrangement between Mr. Deeter and Ms. Downs, she created a general ledger in a computer using Petitioner's checkbook, sales receipts, invoices, etc., as source documents. The source documents were then returned to Petitioner. Additionally, Mr. Deeter prepared state and federal tax returns for Petitioner and Mr. and Mrs. Peoples. Mrs. Peoples maintained all of the source documents for Petitioner's business records in a construction trailer/office located behind the restaurant on the property's highest ground. Because the property was prone to flooding, Petitioner placed the source documents and other business records on shelves in the trailer/office. The only file cabinets in the office were used to store restaurant supplies. On or about October 28, 1998, Respondent sent Petitioner a Notice of Intent to Audit Books and Records for sales and use taxes for the period October 1, 1993, to September 30, 1998. The notice also advised Petitioner that Respondent intended to conduct an audit of Petitioner's corporate intangible taxes for the period January 1, 1994, to January 1, 1998. The audit was scheduled to commence some time after December 28, 1998. In the meantime, Mr. Peoples became so ill that Mrs. Peoples closed their home and moved into a mobile home located on the business property. This move allowed Mrs. Peoples to oversee the restaurant business while she nursed her husband. Mr. Peoples died in March 1999. Thereafter, Mrs. Peoples became Petitioner's sole owner. Mrs. Peoples receives a bi-weekly salary from Petitioner in the amount of $3,000. She also makes draws from its bank account to pay business and personal expenses on an as-needed basis. Mrs. Peoples has an eighth grade education. However, she is, in large part, responsible for the success of Petitioner, which during the audit period grossed between $2,500,000 and $3,000,000 a year. Mrs. Peoples asserts that she does not remember signing any tax returns but admits that she signs documents without examining them when requested to do so by Mr. Deeter. By letter dated March 24, 1999, Respondent advised Petitioner that it was rescinding the October 28, 1998, Notice of Intent to Audit Books and Records and replacing it with a new notice. The new Notice of Intent to Audit Books and Records dated March 24, 1999, included an examination of Petitioner's charter city systems surtax for the period March 1, 1994, through February 28, 1999; Petitioner's sales and use tax from March 1, 1994, through February 28, 1999; and Petitioner's intangible personal property tax from January 1, 1995, through January 1, 1999. The new notice stated that the audit would begin on or before May 24, 1999. On May 23, 1999, Petitioner requested a postponement of the audit due to the death of Mr. Peoples. As a result of this request, Respondent postponed the audit until January 10, 2000. On May 25, 1999, Mrs. Peoples signed a Power of Attorney for Mr. Deeter to represent the business during the audit. In anticipation of the audit, Mrs. Peoples and her staff began going through the source documents stored in the trailer/office. Mr. Deeter also gathered pertinent records and computer printouts. All documents required for the audit were placed in boxes or sacks on the floor of the trailer/office. In September of 1999, Petitioner's property flooded due to a hurricane. The water rose above the elevated entrance to the trailer/office. Mrs. Peoples and Petitioner's employees made no effort to protect the documents on the floor of the trailer/office from the floodwaters. Petitioner's September 1999 insurance claims due to flood loss do not contain a claim for loss of documentation. The 1999 flood loss claims were small in comparison to the flood loss claims for 2001 even though the 1999 floodwaters rose high enough to destroy the records. Record evidence indicates that the trailer/office has flooded on more than one occasion. In September 1999, all of the documents on the floor of the office were destroyed. Subsequently, Mrs. Peoples and Ms. Hatfield disposed of the documents, including but not limited to, the printouts of the general ledger, bank statements, and cancelled checks. On January 7, 2000, Petitioner requested another postponement of the audit until July 1, 2000. Petitioner made the request due to the death of Ms. Downs in December 1999. After her death, Mr. Deeter discovered that Ms. Downs' computer and all backup tapes located in her home office were either stolen or otherwise unaccounted for. The missing computer records included Petitioner's bookkeeping records for the audit period at issue here. On January 15, 2000, Petitioner agreed to extend the time for Respondent to perform the audit. The agreement stated that Respondent could issue an assessment at any time before October 28, 2001. On July 6, 2000, Respondent issued a formal demand for Petitioner to produce certain records. The only records available were Mr. Deeter's own work papers, post-September 1999 materials that had not been placed in the trailer/office prior to the flood, or records prepared after the flood and death of Ms. Downs. On July 17, 2000, the parties signed an Audit Agreement. The agreement states that the audit of sales of tangible personal property would be controlled by the sampling method. On July 17, 2000, Mr. Deeter informed Respondent that Petitioner's records covering the period from 1993 through the middle of 1999 were not available because a flood had damaged them in September 1999. However, using his work papers, Mr. Deeter was able to provide Respondent with copies of some of the original federal tax returns that he had prepared for Petitioner and Mr. and Mrs. Peoples. During the hearing, Mr. Deeter asserted that he had delivered the original tax returns to Mr. and Mrs. Peoples who had the responsibility to sign, date, and file them with the U.S. Internal Revenue Service (IRS) at the appropriate times. Mrs. Peoples testified that she could not remember signing any returns. She believed that Mr. Deeter had assumed responsibility for filing the returns. The unsigned and undated copies of the returns that Mr. Deeter provided Respondent on July 17, 2000, included Petitioner's U.S. Income Tax Return for an S Corporation (Form 1120S) for 1996, 1997, and 1998. These returns showed that Petitioner took the following deductions from income for a lease expense: (a) 1996--$225,546; (b) 1997--$332,791; and 1998--$290,493. These are the amounts that Respondent seeks to tax as rent. Mr. Deeter also provided Respondent with an unsigned and undated copy of Mr. and Mrs. Peoples' 1998 U.S. Individual Income Tax Return (Form 1040). The return included both pages of Schedule E showing rents received from Petitioner. On July 28, 2000, Mr. Deeter provided Respondent with revised copies of Petitioner's 1120S forms and revised copies of Mr. and Mrs. Peoples' 1040 forms. The auditor's file does not contain copies of the revised returns because the auditor did not accept them. The record also indicates that Mr. Deeter did not want to leave the revised returns with Respondent because they were not copies of the original returns. During the hearing, Mr. Deeter testified that he furnished Respondent with revised returns to show that there was no difference in the amount of federal income tax due and payable by Mr. and Mrs. Peoples regardless of whether Petitioner reported a lease expense or a distribution of profit on its 1120S forms and regardless of whether Mr. and Mrs. Peoples reported Petitioner's income as rent received or a profit distribution on their 1040 forms. According to Mr. Deeter, he prepared the revised 1120S returns using his pencil copies of the original handwritten returns because he had never used a computer software program to prepare 1120S forms. Mr. Deeter had a computer software program to prepare 1040 forms, so he used that program to generate the revised 1040 returns. However, Mr. Deeter's testimony that the revised returns were drafts showing Petitioner's deduction of a lease expense and Mr. and Mrs. Peoples' receipt of rent is not persuasive. In November 2000, Respondent obtained copies of Petitioner's 1120S forms and Mr. and Mrs. Peoples' 1040 forms for 1994 and 1995 from the IRS. The IRS did not have copies of these returns for the years 1996 through 1999. However, there is record evidence that Mr. and Mrs. Peoples paid some income taxes for all years in question. The record does not contain copies of the 1994 and 1995 returns. Competent evidence indicates that, consistent with Respondent's routine practice, the auditor reviewed the 1040 and 1120S forms and returned them to the IRS without making copies for Respondent's file. Based on the auditor's review of Petitioner's 1120S returns, Respondent seeks to tax Petitioner for lease expense in the amounts of $152,782.24 in 1994 and $220,355.85 in 1995. During the hearing, Mr. Deeter conceded that he prepared Petitioner's 1120S forms for 1994 and 1995 showing deductions for a lease expense and Mr. and Mrs. Peoples' 1040 forms showing rent received from Petitioner. His testimony that he prepared all returns in subsequent years showing no lease expense for Petitioner and profit distributions instead of rent received for Mr. and Mrs. Peoples is not persuasive. In November 2000, Respondent issued a Notice of Intent to Make Audit Changes. The notice made no adjustment with respect to Petitioner's reported taxable sales. The only adjustment was based on lease payments from Petitioner to Mr. and Mrs. Peoples as consideration for the rent of the building and fixtures utilized by Petitioner in the conduct of its business. On January 26, 2001, Mr. Deeter had an audit conference with Respondent's staff. During the conference, Mr. Deeter requested that Respondent review Petitioner's amended 1120S forms for the years 1996, 1997, 1998, and 1999. The amended 1120S returns did not include deductions for a lease expense. Respondent would not accept the amended returns, but informed Mr. Deeter that it would review the amended returns if he could document that they had been filed with the IRS. On March 7, 2001, the IRS stamped the amended 1120S forms for 1996, 1997, 1998 and 1999 as having been received. Mrs. Peoples had signed the returns as Petitioner's president but she did not date her signatures. Mr. Deeter testified that his wife, Roberta Lawson, signed the amended 1120S returns as the tax preparer. Mrs. Lawson's purported signatures on the forms were dated appropriately for each tax year. However, Mrs. Lawson did not testify at the hearing. Mr. Deeter's testimony that the returns filed with the IRS on March 7, 2001, after the audit was completed were, in fact, exact copies of the returns that he and his wife prepared for Petitioner each year and provided to Respondent on July 17, 2000, is not persuasive. After receiving the amended 1120S returns, Respondent decided not to consider them in the audit because they were self-serving. On August 6, 2001, Respondent issued a Notice of Proposed Assessment of sales and use tax and charter transit system surtax. By letter dated October 2, 2001, Petitioner filed a timely informal protest of the proposed assessment. Petitioner asserted that it had never paid any rent to Mr. and Mrs. Peoples. On January 29, 2002, Respondent issued a Notice of Decision upholding the proposed assessments. However, Petitioner never received this notice. Therefore, Respondent reissued the Notice of Decision without any additional changes on August 14, 2002. During discovery, Petitioner provided Respondent with unsigned and undated copies of Mr. and Mrs. Peoples' 1040 forms for 1996, 1997, 1998, and 1999. These returns show taxable income derived from an S corporation on line 17, passive income and losses from Petitioner on page 2 of Schedule E, and depreciation on Form 4562. In other words, the returns reflect corporate distributions of profit from Petitioner and do not reference any income from rental real estate. Mr. Deeter's testimony during hearing that the 1040 returns provided to Respondent during discovery are exact copies of the original 1040 returns is not persuasive. As of December 12, 2002, Mr. and Mrs. Peoples had not filed 1040 returns for the years 2001, 2000, 1999, 1998, 1997, or 1996 with the IRS. The audit at issue here was based on the best information provided at the time of the audit. Respondent completed the audit on or about January 26, 2001. Petitioner does not assert that the calculation of the assessment was in error. Instead, Petitioner protests that any assessment is due. Petitioner could have requested its bank to provide it with copies of its statements and cancelled checks for the relevant period. Petitioner did not make such a request and Respondent was not under an obligation to do so. There is no evidence that a written lease for Petitioner to use Mr. and Mrs. People's property ever existed. However, the greater weight of the evidence indicates that Petitioner leased the restaurant property from Mr. and Mrs. Peoples for all relevant years. Mr. Deeter is an experienced accountant with over 30 years of experience. Petitioner and Mr. and Mrs. Peoples relied upon Mr. Deeter's advice as to what, if any, taxes should be paid on the lease. Armed with all of the necessary information, Mr. Deeter gave Petitioner obviously erroneous advice concerning the tax consequences associated with Petitioner leasing the property and paying 100 percent of its profits as consideration for the lease. To compound the problem, Mrs. Peoples negligently failed to ensure that Petitioner's business records, gathered specifically in anticipation of Respondent's audit, were safely preserved from hurricane floodwaters. Petitioner has had no previous tax compliance difficulties. It has not been subject to prior audits or assessments. Even so, the facts of this case indicate that Petitioner and Mr. and Ms. Peoples did not exercise ordinary care and prudence in complying with the revenue laws of Florida. Mr. Deeter testified that the fair market value or reasonable consideration for the lease is an amount equivalent to Mr. and Mrs. Peoples' depreciation. According to the depreciation schedules, which accompanied the 1040 forms provided to Respondent during discovery, the annual cost for the use of the property and fixtures were as follows: (a) 1996--$98,296; (b) 1997--$104,840; and (c) 1998--$114,106 ($179,554 less a one time extraordinary loss of $65,448 due to flood damage). Mr. Deeter also testified that using the information on the 1040 forms for 1996, the depreciation expense for 1994 and 1995 can be computed as follows: (a) 1994--$63,000 to $67,000; and (b) 1995--$77,000 to $79,000. Mr. Deeter's testimony that the fair market value of the lease is equivalent to the depreciation set forth on 1040 returns never filed with the IRS is not persuasive. Mr. Deeter testified that an estimate of reasonable net profits for a corporation of similar size and make-up could be determined by reference to ratio profiles prepared by Robert Morris and Associates. Mr. Deeter's testimony regarding average profit distributions to shareholders of similarly situated corporations and reasonable profit distributions for Petitioner are speculative and not persuasive.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a final order upholding the tax assessment. DONE AND ENTERED this 4th day of April, 2003, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 4th day of April, 2003. COPIES FURNISHED: David B. Ferebee, Esquire Post Office Box 1796 Jacksonville, Florida 32201-1796 J. Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Post Office Box 6668 Tallahassee, Florida 32314-6668 R. Lynn Lovejoy, Esquire Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Petitioner is the state agency responsible for licensure and regulation of Florida real estate brokers. Respondent is, and at all material times has been, licensed by Petitioner as a real estate broker, license number 0025968. On or about November 22, 1988, the Respondent presented, to Dr. Samir Najjar, a parcel of land which was available for purchase. The Respondent identified the location of the property on a map and represented that the property could subsequently be resold for a profit. The doctor was familiar with the location and agreed to participate in the purchase transaction. The doctor provided, to the Respondent, a check in the amount of $25,000, dated November 22, 1989. Without Dr. Najjar's knowledge or consent, the Respondent deposited the $25,000 check into his personal account, and converted the funds for personal use. The funds were not used to purchase the land parcel. The Respondent claims to have used the funds to operate his personal real estate publishing and advertising business. Dr. Najjar did not authorize such use. On or about January 20, 1989, the Respondent presented, to Dr. Najjar, a house which was available for purchase. The Respondent represented that the house could subsequently be resold for a profit. After seeing several photographs of the house, the doctor agreed to participate in the purchase transaction. On January 20, 1989, Dr. Najjar provided to the Respondent, a check in the amount of $15,000. Without Dr. Najjar's knowledge or consent, the Respondent deposited the $15,000 check into his personal account, and converted the funds for personal use. The funds were not used to purchase the house. The Respondent claims to have used the funds to operate his personal real estate publishing and advertising business. Dr. Najjar did not authorize such use. On or about February 28, 1989, Dr. Najjar, Dr. Najjar's brother, and the Respondent entered into an agreement with G. R. Thornton, to purchase a warehouse/office property owned by Thornton. The first paragraph of the contract for sale, which was signed by all parties, states, "Receipt is hereby acknowledged by Raymond S. Farris, hereinafter called agent, of the sum of $3,000 as binder deposit..." from the Najjar brothers. The contract states that an additional deposit of $17,000 was due within five days of the contract's acceptance by all parties. Contrary to the sales contract representation, the Respondent did not receive the initial $3,000 binder deposit from the Najjar brothers. Upon presentation of the contract to the seller, the Respondent failed to inform the seller that no binder deposit had been made. The seller learned that the deposit had not been made when, six or seven days later, the seller contacted Mr. Farris to ascertain the whereabouts of the deposit, including the additional $17,000. At that time, the seller was informed by the Respondent that no binder deposit had been made and that the purchase transaction would not be completed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: that the Department of Professional Regulation, Division of Real Estate, enter a Final Order revoking the licensure of Raymond S. Farris. DONE and ENTERED this 6th day of July, 1990, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 6th day of July, 1990. APPENDIX TO RECOMMENDED ORDER CASE NO. 90-0511 The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified in the Recommended Order except as follows: 4. The date of the check indicates that the transaction occurred on November 22, 1988, rather than November 27, 1988. Respondent The Respondent did not file a proposed recommended order. COPIES FURNISHED: Raymond S. Farris 5711 Richard Street, Suite #1 Jacksonville, Florida 32216 James H. Gillis, Esq. Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact On December 11, 1974 Rule 12A-1.32 F.A.C. became effective following notice (Exhibit 6) that numerous sections of the Revenue Code were being revised and that a public hearing on the revisions was being held by the Governor and Cabinet. At the time this rule became effective, rulemaking was governed by 120.041 F.S. and the procedure required in that section (which was replaced by 120.54 F.S. on January 1, 1975) was followed. Section 120.011 F.S., also repealed on January 1, 1975, provided that no rule enacted pursuant to Chapter 120 could be retroactive unless expressly so stated. Assessments against Petitioner resulting from the audit taken in 1975 covered the period January 1, 1973 to November 30, 1975. Petitioner's and Intervenor's business is "data conversion contracts and projects" by way of keypunching, key verifying, typing, key tape, key disk, and direct computer entry, or a combination depending on relative efficiencies and machine availability, with or without computer printed reports. More specifically, Petitioner's business of data conversion is the conversion of data from the written or spoken word or symbol into a communication medium (card, tape, disk, paper tape, paper, and direct to computer) through personal services. In connection therewith from time to time Petitioner purchases custom computer systems and programs. In essence, Petitioner converts data received from his customers into a form that can be placed in a computer and thereafter retrieved for such purposes as the customer may desire. In performing this function Petitioner uses paper tape, punch cards, magnetic tape, key tapes, keypunch, typewritten sheets, telephone lines, and other means of transmitting the information or data direct to the computer. The latter methods have been referred to as third generation computer software as the data is transmitted through a cathode ray tube by the operator direct to the computer rather than by means of cards, tape, or other tangible property on which the data is placed for transmission into the computer. The computer program in its operating environment is a product of human intelligence reduced to binary pulses, which are interpreted by the computer machinery to cause human knowledge to be transposed into desired and meaningful output. The basic issue to be resolved is the nature of computer software. Computer hardware refers to the tangible parts of the computer itself while software denotes the information loaded into the computer and the directions given to the computer as to what to do and upon what command. In its assessment Respondent has demanded payment for sales tax involving software processed and sold by Petitioner and Intervenors transmitted on punched cards, paper tape, and typed sheets. Respondent abated the assessment involving magnetic tapes because the tape was owned by Respondent and returned to him when the data superimposed thereon had been stored in the computer. Respondent does not assess sales taxes for computer information supplied to the customer unless tangible property on which the data is superimposed is used and which tangible property is not reusable because of the changes to the tangible property produced when the information or data was placed thereon. Since the magnetic tape was returned to Petitioner in a reusable state and title was never transferred to the customer, Respondent abated the assessment for sales taxes resulting in sale of software via magnetic tape. Similarly Respondent does not claim sales taxes are due when data is fed direct to the computer as no tangible property is transferred. However, when the identical data is transmitted to the computer by means of punched cards, paper tape or other tangible property which is physically changed by the addition of the intelligible data, sales taxes are collected pursuant to Rule 12A-1.32(4) and (7) F.A.C. The tangible property on which the data is superimposed has a value of less than five percent of the total sales price charged for the services. The same type of service is performed by Petitioner whether the data is ultimately entered into the computer by punched cards, magnetic tape, or direct.
The Issue Are Petitioners entitled to repayment of funds paid to the State Treasury as intangible taxes in relation to accounts receivable generated by sales made in the state of Florida? See Section 215.26, Florida Statutes.
Findings Of Fact Specialty Products & Insulation Co. (Specialty Products or Petitioner), A C & S, Inc. (A C & S or Petitioner), and Centin Corporation (Centin or Petitioner) are sibling companies owned by a common corporate parent company. Each of the three Petitioner companies is domiciled in a state other than Florida, and each has its headquarters in Pennsylvania. The Department is an agency of the state of Florida charged with the duty of administering Chapter 199, Florida Statutes, involving intangible taxes. Specialty Products, A C & S, and Centin remitted intangible taxes to the state of Florida for tax years 1993, 1994, and 1995. By letter dated June 17, 1996, Special Products and A C & S sought refunds from the Department of intangible taxes in the amounts of $19,848.01 and $4,796.41, respectively. By letter dated July 23, 1996, Centin also sought a refund from the Department of intangible taxes in the amount of $4,924.34. The Petitioners' refund applications argued that a refund of intangible taxes was due because the account receivable on which the taxes had been paid did not have a taxable situs in the state of Florida. On August 28, 1996, the Department issued Notices of Decision of Refund Denial to Specialty Products and A C & S, denying their refund applications in their entirety. On January 21, 1997, the Department issued its Notice of Decision of Refund Denial to Centin, also denying in its entirety Centin's application for refund. All three of the Petitioners timely challenged the Department's notices of decision by filing petitions for administrative hearings. Each of the petitions was originally assigned a separate case number by the Division of Administrative Hearings. By order dated January 16, 1997, Specialty Products and Insulation Co., v. Department of Revenue, (Case No. 96-5098) and A C & S, Inc., v. Department of Revenue, (Case No. 96-5099) were consolidated. By order dated January 23, 1998, Centin Corporation v. Department of Revenue, (Case No. 97-1115) was consolidated with the other two cases, as well. Specialty Products and Insulation, Co. Specialty Products is a building construction company operating in the state of Florida both as a contractor and by making sales of building materials to other contractors at retail. At all times relevant to this matter, Specialty Products was registered to do business as a non-domiciliary with the Florida Department of State, Division of Corporations. At all times relevant to this matter, Specialty Products was registered as a dealer with the Department of Revenue for purposes of collecting and remitting sales taxes. Although it is headquartered in Pennsylvania, at all times relevant to this matter, Specialty Products maintained a number of branch offices in the state of Florida through which it conducted business, including in Pompano Beach, Medley, Orlando, Tampa, and Fort Myers. At its various Florida branch offices, Specialty Products employed branch managers, operation managers, sales representatives, inside sales people, sales service clerks, office coordinators, warehousers and truck drivers. During the period from 1993 through 1995, Specialty Products made retail sales of its products from its Florida branch offices to Florida customers. During the period from 1993 through 1995, Specialty Products remitted intangible taxes to the state of Florida on the accounts receivable that were generated by its retail sales to its Florida customers. Specialty Products does not employ any credit managers at any of its Florida branch offices. Specialty Products' credit service, credit, cash application, and accounting departments are all located in Pennsylvania. When a customer seeks credit from Petitioner in order to purchase materials or services, the customer executes a credit application and contract for purchase at Petitioner's Florida branch office. With the exception of those described in paragraph 20, below, all applications for credit submitted by its Florida customers are forwarded by Petitioner's Florida branch offices to Petitioner's credit department in Pennsylvania for review and approval. Limited authority for granting credit (in an amount up to $5,000) to a Florida customer in an emergency is delegated to the branch manager located at each Florida branch office. All corporate bank accounts are located in Pennsylvania. All payments relating to sales made in the state of Florida are received and recorded in Pennsylvania, and all deposits are made into Petitioner's bank account in Pennsylvania. If a Florida customer sends a payment to a Florida branch office, this payment is forwarded to the Pennsylvania offices of the Petitioner to be recorded, processed, and deposited. All control procedures related to Specialty Products' accounts receivable are performed by employees located in Pennsylvania. No cash payments or bank accounts are maintained by Specialty Products in the state of Florida. A C & S, Inc. A C & S, Inc., is an insulation contracting company specializing in the thermal insulation of mechanical systems, and it operates in the state of Florida. At all times relevant to this matter, A C & S, Inc., was registered to do business as a non-domiciliary with the Florida Department of State, Division of Corporations. At all times relevant to this matter, A C & S, Inc., was registered as a dealer with the Department of Revenue for purposes of collecting and remitting sales taxes. Although it is headquartered in Pennsylvania, at all times relevant to this matter, A C & S, Inc., maintained at least one branch office in the state of Florida through which it conducted business. This branch office is located in Jacksonville, Florida. A C & S, Inc., also had a branch office in Merritt Island, Florida, until August 1995. At its Florida branch office, A C & S, Inc., employed a district manager, contract manager, construction superintendent, secretary, more than one sales representative, and an estimator. During the period from 1993 through 1995, A C & S, Inc., remitted intangible taxes to the state of Florida on the accounts receivable that were generated by its contracting sales to its Florida customers. A C & S, Inc., does not employ any credit managers at any of its Florida branch offices. A C & S, Inc.'s credit service, credit, cash application, and accounting departments are all located in Pennsylvania. When a customer seeks credit from Petitioner in order to purchase materials or services, the customer executes a credit application and contract for purchase at Petitioner's Florida branch office. With the exception of those described in paragraph 35, below, all applications for credit submitted by its Florida customers are forwarded by Petitioner's Florida branch offices to Petitioner's credit department in Pennsylvania for review and approval. Limited authority for granting credit (in an amount up to $5,000) to a Florida customer in an emergency is delegated to the branch manager located at each Florida branch office. All corporate bank accounts are located in Pennsylvania. All payments relating to sales made in the state of Florida are received and recorded in Pennsylvania, and all deposits are made into Petitioner's bank account in Pennsylvania. If a Florida customer sends a payment to a Florida branch office, this payment is forwarded to the Pennsylvania offices of the Petitioner to be recorded, processed, and deposited. All control procedures related to A C & S, Inc.'s accounts receivable are performed by employees located in Pennsylvania. No cash payments or bank accounts are maintained by A C & S, Inc., in the state of Florida. Centin Corporation Centin Corporation is an insulation contracting company operating in the state of Florida. At all times relevant to this matter, Centin Corporation was registered to do business as a non-domiciliary with the Florida Department of State, Division of Corporations. At all times relevant to this matter, Centin was registered as a dealer with the Department of Revenue for purposes of collecting and remitting sales taxes. Although it is headquartered in Pennsylvania, at all times relevant to this matter, Centin Corporation maintained at least one branch office in the state of Florida through which it conducted business. This branch office is located in Pompano Beach, Florida. At its Florida branch office, Centin employed a branch manager, construction superintendent, secretary, and more than one sales representative. During the period from 1993 through 1995, Centin remitted intangible taxes to the state of Florida on the accounts receivable that were generated by its contracting sales to its Florida customers. Centin does not employ any credit managers at any of its Florida branch offices. Centin's credit service, credit, cash application, and accounting departments are all located in Pennsylvania. When a customer seeks credit from Petitioner in order to purchase materials or services, the customer executes a credit application and contract for purchase at Petitioner's Florida branch office. With the exception of those described in paragraph 50, below, all applications for credit submitted by its Florida customers are forwarded by Petitioner's Florida branch offices to Petitioner's credit department in Pennsylvania for review and approval. Limited authority for granting credit (in an amount up to $5,000) to a Florida customer in an emergency is delegated to the branch manager located in each Florida branch office. All corporate bank accounts are located in Pennsylvania. All payments relating to sales made in the state of Florida are received and recorded in Pennsylvania, and all deposits are made into Petitioner's bank account in Pennsylvania. If a Florida customer sends a payment to a Florida branch office, this payment is forwarded to the Pennsylvania offices of the Petitioner to be recorded, processed, and deposited. All control procedures related to Centin's accounts receivable are performed by employees located in Pennsylvania. No cash payments or bank accounts are maintained by Centin in the state of Florida.
Recommendation Based upon the facts found in the conclusions of law reached, it is RECOMMENDED: That the requests for repayment of funds paid to the State Treasury as intangible personal property taxes for all years in question be denied. DONE AND ENTERED this 23rd day of March, 1998, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of March, 1998. COPIES FURNISHED: Elizabeth Bradshaw, Esquire Jarrell L. Murchison, Esquire Office of Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 Paul R. Vidas, CPA Director Zelenkofske, Axelrod and Company, Inc. 101 West Avenue, Suite 300 Jenkintown, Pennsylvania 19046 Tom Roche Specialty Products and Insulation Company A C & S, Inc. Post Office Box 1548 Lancaster, Pennsylvania 17608 Tom Roche IREX Corporation Post Office Box 1548 Lancaster, Pennsylvania 17608 Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
