Findings Of Fact Petitioner is employed as a Tax Auditor IV in Respondent's Property Tax Administration Program. He is assigned to work in Respondent's Regional Office in Jacksonville, Florida. The counties within the Jacksonville Region for Property Tax Administration are: Duval, Clay, Nassau, Putnam, St. John and Flagler. In January of 1996, Petitioner wrote to John Everton, Director of Respondent's Property Tax Administration Program requesting permission to run for Tax Collector of Clay County. In February of 1996, Petitioner talked to Mr. Everton's secretary. After making this call, Petitioner understood that Respondent's attorneys had his application to run for elective office and that he would soon receive an answer. Petitioner sent Mr. Everton an E Mail message on or about March 6, 1996. In this message, Petitioner asked Mr. Everton to check on his request to run for office and to expedite it immediately because time was of the essence. That same day, Mr. Everton responded to Petitioner's request with an E mail message. Expressing his apologies, Mr. Everton advised Petitioner that Respondent's attorneys had Petitioner's initial request. Mr. Everton stated that he would request that the attorneys respond immediately to Petitioner's inquiry. On or about March 13, 1996 Mr. Everton advised Petitioner that he would have to send his request for approval to run for local office directly to the agency head pursuant to the directive contained in Rule 60K-13.0031(1), Florida Administrative Code. By letter dated March 18, 1996 Petitioner requested that Larry Fuchs, Respondent's Executive Director, grant him permission to run for Tax Collector of Clay County. Mr. Fuchs received this letter on March 29, 1996. Mr. Fuchs responded to Petitioner's request by letter dated April 5, 1996. He reminded Petitioner that Rule 60K-13.0031(1), Florida Administrative Code, requires employees to apply directly to the agency head when requesting approval to become a candidate for local office. Mr. Fuchs then gave several reasons why he could not certify to the Department of Management Services that Petitioner's candidacy would involve no interest which conflicts or activity which interferes with his state employment. More specifically, Mr. Fuchs' April 5, 1996 letter stated in relevant part that: Under section 195.002, Florida Statutes, the Department of Revenue has supervision of the tax collection and all other aspects of the administration of such taxes. Your position with the Department may require you to review or audit the activities of the office you propose to seek. Also some of your duties in supervising other officials in the administration of property taxes may be affected by your proposed candidacy. Your job requires you to review appropriate tax returns, and other records to resolve complex issues related to taxing statutes administered by the Department of Revenue. It also requires you to identify and scrutinize transactions to ascertain whether taxpayers have escaped paying property taxes. In addition, it also requires you to review and audit procedures used by counties to identify and value tangible personal property and accomplish statutory compliance, to investigate taxpayer complaints, to conduct field review with county staff as appropriate, and to provide education an assistance to county taxing officials. Because of the Department's statutory super- vision of the office of tax collector, there cannot be a certification that your candidacy would involve "no interest which conflicts or activity which interferes " with your state employment within the definitions of section 110.233(4), Florida Statutes. The letter went on to say that: This letter is a specific instruction to you that you should not qualify or become a candidate for office while employed in your current position. If you wish to commence your campaign by performing the pre-filing requirements, the law requires that you first resign from the Department. Failure to do so shall result in disciplinary action to dismiss you from your position in accordance with the Department's disciplinary standards and procedures, and Rule 60K-4.010, F.A.C., the Department's Code of Conduct, Section 110.233, Florida Statutes, and Rule 60K-13.002(3), F.A.C. After receiving the above decision, Petitioner requested a formal hearing to challenge the denial of his request to run for Tax Collector of Clay County by letter dated April 10, 1996. Respondent received this letter on April 16, 1996. Respondent referred Petitioner's request for a formal hearing to the Division of Administrative Hearings on April 26, 1996. Petitioner responded to the Division of Administrative Hearings' Initial Order on May 7, 1996 advising the undersigned that he was unavailable for hearing May 28, 1996 through June 10, 1996 and July 5, 1996. He also included an initial pleading requesting, among other things, that Respondent immediately allow him to run for office and pay his filing fee because, in his opinion, it was too late for him to qualify using the alternative method of submitting petitions. On May 21, 1996 this matter was scheduled for hearing on July 9, 1996. Respondent filed a Unilateral Response to the Initial Order and a Prehearing Statement on May 30, 1996. On June 14, 1996 Petitioner filed a letter stating that it was impossible for him to be prepared for the hearing scheduled for July 9, 1996 for two reasons: (a) he had just returned to work after two weeks of vacation; and (b) he was overwhelmed by discovery associated with his upcoming hearing. Petitioner requested that this matter be continued until sometime after August 15, 1996. He represented that Respondent had no objection to his request. An order dated June 20, 1996 rescheduled the case for hearing on August 19, 1996. On July 18, 1996, Respondent sent Petitioner a letter granting him permission to qualify and file the necessary paperwork to become a candidate for Clay County Tax Collector. The letter also advised Petitioner of the conditions under which he could begin campaign activities while on Respondent's payroll. Respondent's change in position was due in part to the pending Final Order in Hendrick v. Department of Revenue, DOAH Case No. 96-2054. Respondent faxed its July 18, 1996 letter to Petitioner's office at 2:38 p.m. Petitioner's immediate supervisor contacted Petitioner at his home later that day at approximately 3:45 p.m. Petitioner did not request annual leave for the following day so that he could take whatever steps were necessary in order to qualify as a candidate for the office of Tax Collector. Instead, he opted to follow through with his previously arranged appointments for July 19, 1996. On July 22, 1996 Petitioner faxed a letter to Respondent indicating that Respondent had not given him sufficient time in which to meet all requirements to qualify as a candidate for elective office by noon on July 19, 1996. In order to qualify as a candidate for elective office in Clay County, Petitioner had to declare a bank depository for campaign purposes and designate a campaign treasurer. If Petitioner intended to use the alternative method of qualifying by filing petitions, he had to file an alternative affidavit and obtain petition forms from the Clay County Supervisor of Elections between January 3, 1996 and June 21, 1996. He had to submit the signed petitions (Democrats-688; Republicans-990, Independent-1,873) to the Supervisor of Elections on or before June 24, 1996. Regardless of whether Petitioner intended to qualify by paying a fee (Major Party-$5,876.40; Independent-$4,309.36) or by using the alternative petition method, he had to complete all paperwork on or before noon of July 19, 1996. Petitioner did not qualify by either method.
Recommendation Based on the Findings of Fact and Conclusions of Law set forth above, it is recommended that Respondent enter a Final Order dismissing Petitioner's request for certification to the Department of Management Services that his candidacy for the office of Clay County Tax Collector would involve no interest which conflicts, or activity which interferes, with his state employment. DONE AND ENTERED this 15th day of October, 1996 in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1996. COPIES FURNISHED: Patrick A. Loebig, Esquire Peter S. Fleitman, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Floyd L. Hylton 103 Century 21 Drive, Suite 213 Jacksonville, Florida 32216 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
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against her, and, if so, what disciplinary action should be taken, if any.
Findings Of Fact Respondent Anne E. Carr is and has been at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0268356. In 1988 Helen B. Moser and her husband, John J. Moser, Jr., obtained their real estate salesman licenses. In 1989 they became real estate brokers. Upon becoming licensed brokers, they decided that they would like to open their own real estate office. They began contacting various real estate brokers seeking advice on how to open and operate a real estate business. Respondent was one of the brokers the Mosers contacted for advice. She and the Mosers already knew each other from previous professional activities. At the time, Respondent was the broker and sole stockholder of Carr Real Estate, Inc. She also was spending a substantial amount of time selling luxury condominiums for a particular developer, which required her to be on-site at the development. Respondent suggested to the Mosers that they join Carr Real Estate, Inc., and run the office for her rather than opening their own office, which would give them immediate access to her listings and many clients and allow her to devote her time to sales for the large real estate development. The Mosers agreed that was a good opportunity for all concerned and joined Carr Real Estate, Inc., as broker/salesmen in October of 1989. The Mosers began running the business for Respondent at her request, providing Respondent with monthly accountings. During 1990 the Mosers earned approximately $90,000 as a result of the listings they took over from Respondent and as a result of the listings Respondent referred to them. Throughout that year Carr Real Estate, Inc., remained a major presence in the Highland Beach area where Respondent was well known both for her flamboyant fashions and her ability to list and sell luxury ocean-front and water-front properties. During the first week of December 1990 Respondent advised the Mosers that due both to financial problems she was experiencing and pressure on her from the developer to devote full time to his sales she would be closing the business on December 31 unless the Mosers wanted to purchase the company from her. They advised Respondent they were interested in doing so and that they would draft the documents for Respondent's signature. Many discussions took place between Respondent and the Mosers over the next several weeks formulating the terms of the sale of the business, and the Mosers submitted to Respondent a number of drafts of documents. While the negotiations were on-going, Respondent filled out and executed on December 12, 1990, the documents necessary for her to file for personal bankruptcy. On December 15 she faxed written instructions to her attorney to not file the bankruptcy petition because she was selling her company. On December 20, 1990, Respondent and the Mosers executed a Purchase and Sale Agreement and a Bill of Sale. It is noted that those documents also involved the sale of Respondent's interest in two other corporations to the Mosers but that portion of the transaction raises no issues involved in this proceeding. The Purchase and Sale Agreement provided that its effective date would be January 1, 1991. The Agreement specifically represented that Carr Real Estate, Inc., was being sold free of any liabilities and encumbrances and that the corporation did not own any tangible assets. The Agreement further provided that Respondent would indemnify the Mosers from all obligations and liabilities incurred by Carr Real Estate, Inc., prior to January 1, 1991. The Agreement provided for no money to change hands as a result of the Mosers' purchase of Respondent's business; rather, the purchase price for the corporation was five percent of all sales commissions received by the corporation for a period of two years. On December 29, 1990, Respondent executed the Seller's Affidavit given to her by the Mosers. The portion of the Seller's Affidavit pertinent to this dispute is that Respondent attested that there were no actions or proceedings then pending in any state or federal court in which "the Affiant or Corporations" are parties, including bankruptcy. It was very clear in Respondent's mind that what she was selling under the Purchase and Sale Agreement and the Bill of Sale and what she was attesting to in the Seller's Affidavit was in regard to the corporation and not her personally. It never occurred to Respondent that she was representing to the Mosers that she personally had no bills and no assets. Respondent had no intention of defrauding the Mosers. Supporting this intent is the clear language contained in the Purchase and Sale Agreement, the Bill of Sale, and the Seller's Affidavit that she would personally indemnify and hold harmless the Mosers from any liabilities incurred by the corporation prior to the effective date of the sale. In mid-January 1991, approximately two weeks after the effective date of the sale, the Mosers discovered that a bankruptcy petition had been filed on behalf of Respondent as an individual. Although that petition did not involve the corporation, John Moser immediately contacted Respondent who did not know that her attorney had filed the petition contrary to Respondent's instructions. On January 23, 1991, Respondent wrote to Helen Moser apologizing for the erroneous filing of her bankruptcy petition and assuring her that it would be corrected. Respondent immediately contacted her attorney to ascertain how the petition could be dismissed. She was advised by her attorney that the only way she could dismiss the petition was to not attend the first meeting of creditors which would cause the petition to automatically be dismissed. Respondent did fail to attend the first meeting of creditors. Due to her failure to attend, her bankruptcy petition was dismissed. She immediately contacted Helen Moser to advise her of the dismissal. On February 1, 1991, John Moser called Respondent to inform her that a statement for a monthly automobile lease payment in the name of Carr Real Estate had been received. Respondent immediately sent the Mosers a note indicating that she had contacted G.M.A.C. but that company refused to allow her to transfer responsibility for her automobile lease payments from the corporation to herself. She acknowledged that she was responsible for any of the lease payments and requested that the Mosers acknowledge that the automobile was not an asset of the corporation. At the time Respondent knew that she was responsible for the lease payments because she signed the lease agreement as an individual. Respondent's contact with G.M.A.C. was unnecessary since her automobile had been leased to her as an individual in June of 1988, a date which preceded the existence of Carr Real Estate, Inc. The automobile was insured in Respondent's individual name and was registered in the name of G.M.A.C. at Respondent's address. The Bill of Sale executed by Respondent and the Mosers does not list the automobile as an asset of the corporation that was conveyed. The automobile leased by Respondent was not an asset of the corporation. The only relationship between Respondent's leased automobile and Carr Real Estate, Inc., concerns the deduction of automobile expenses as business expenses on the tax return for Carr Real Estate, Inc. On February 6, 1992, Helen Moser asked Respondent for a copy of the 1990 corporate tax return for Carr Real Estate, Inc., and Respondent provided a copy to her that same day. The return had been prepared in August or September of 1991 by Mary Dorak, a person enrolled with the Internal Revenue Service. It contained an entry entitled "loan from shareholder" in the sum of $107,060. Respondent had been the sole shareholder of the corporation. On February 26, 1992, the Mosers obtained an opinion letter from an attorney advising them that the corporation was not liable to Respondent for any debts. Neither the Mosers nor their accountant ever contacted Dorak or Respondent about the information contained in that tax return. Instead, the Mosers filed an amended corporate tax return for 1990 for Carr Real Estate, Inc. They removed the automobile as a corporate asset while leaving the shareholder's loan because it benefited them tax-wise. Instead of amending the return, the Mosers could have filed a 1991 return showing Respondent's stock exchange for the basis that was left of the stock in the corporation because the transaction took effect on January 1 of that year. Doing so would have caused no adverse tax consequences to the Mosers. Respondent typically provided Dorak with a listing of Respondent's income and expenses for the year and would then simply sign the return after Dorak had prepared it without reviewing the return first. Without any input from Respondent, Dorak had listed the automobile and some personal debts of Respondent on the 1990 corporate tax return because Respondent could take advantage of certain business deductions. That action had no adverse tax consequences for the Mosers. The Mosers never requested a tangible property tax return which would have reflected if there were any assets in the corporation. Had they made this request, they would have been told that there was none in existence because the corporation had no assets. At the time that Respondent and the Mosers executed the Purchase and Sale Agreement, the Bill of Sale, and the Seller's Affidavit in December, all three believed that the corporation had no assets or liabilities and that any assets and liabilities of Respondent were hers personally. As of January 1, 1991, the effective date of the sale, the corporation had no assets or liabilities. There were no tax consequences to the Mosers because of the listing of the shareholder loan in the 1990 corporate tax return because in that Subchapter S corporation the person ultimately adversely affected by the sale would be Respondent since she owned all of the shares in 1990. On the other hand, the filing of an amended 1990 corporate tax return by the Mosers without Respondent's knowledge and consent has resulted in adverse tax consequences to her, an unnecessary result. In November 1988 Respondent was involved in the sale of a condominium unit owned by Mr. and Mrs. Roy Heinz. Due to extended negotiations, the buyer's decision to not purchase the unit, and instructions from Heinz who was her client, Respondent delayed in placing the buyer's deposit check in her escrow account. Petitioner filed an Administrative Complaint against Respondent only and not also against Carr Real Estate, Inc., since that corporation was not yet in existence. After a formal evidentiary hearing, a Hearing Officer of the Division of Administrative Hearings specifically cleared Respondent of any intentional wrongdoing and of any culpable negligence. Respondent was found guilty, however, of what was specifically characterized to be a technical violation of failure to immediately place the deposit check into her escrow account. The minimum penalty permissible was assessed against Respondent. Respondent was also dismissed from the civil lawsuit filed by Roy Heinz which emanated out of the same circumstances for which the administrative action was brought. The Mosers knew about the disciplinary action and the civil lawsuit pending against Respondent individually prior to their execution of the December 1990 documents transferring Carr Real Estate, Inc., from Respondent's ownership to theirs effective January 1, 1991. The "Roy Heinz matter" was specifically raised by John Moser during the negotiations among the Mosers and Respondent. In April of 1991 Respondent sent Helen Moser a copy of the Recommended Order finding Respondent not guilty of any dishonest conduct or culpable negligence, and Helen Moser failed to even read the entire Order since she considered it unimportant and because she knew the transaction involved occurred prior to the formation of Carr Real Estate, Inc. The Mosers continue to operate Carr Real Estate, Inc. The business has been diminishing, however, since 1991 due to the reduction in the number of salespersons affiliated with the business, John Moser's inability to attract listings and retain clients, and the amount of time the Mosers have been devoting to John Moser's computer business. Respondent's actions and/or inactions have not been the cause of the decline in Carr Real Estate, Inc.'s, business. Moreover, the Mosers have not been harmed financially or in any other way due to any statements contained in the Purchase and Sale Agreement, Bill of Sale, or Seller's Affidavit executed by Respondent. The sale of Carr Real Estate, Inc., by Respondent to the Mosers benefited all three of them. In her negotiations surrounding that sale, Respondent agreed to the terms desired by the Mosers, acted honestly, and did not knowingly or intentionally misrepresent any material fact. Those misrepresentations alleged by the Mosers and Petitioner to be contained in the closing documents, such as any statement that Respondent personally had no assets or liabilities, were not material to the sale and purchase of the corporation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered finding Respondent not guilty of the allegations contained in the Administrative Complaint filed against her and dismissing that Administrative Complaint. DONE and ENTERED this 16th day of December 1994, at Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December 1994. APPENDIX TO RECOMMENDED ORDER Petitioner's proposed findings of fact numbered 1-4, 6-11, 13, 15, 18, and 19 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed findings of fact numbered 5, 16, and 17 have been rejected as not being supported by the weight of the credible evidence. Petitioner's proposed findings of fact numbered 12 and 14 have been rejected as being subordinate. Respondent's proposed findings of fact numbered 1-29, 31, and 33-36 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed finding of fact numbered 30 has been rejected as not being supported by the weight of the credible evidence in this cause. Respondent's proposed findings of fact numbered 32 has been rejected as not constituting a finding of fact but rather as constituting argument of counsel. COPIES FURNISHED: Jack McRay, Esquire Acting General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Theodore R. Gay, Senior Attorney Department of Business and Professional Regulation 401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128 Harold M. Braxton, P.A. Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156-7815
The Issue Is the purchase or use of tangible personal property by a contractor who purchases material and supplies for use in performing non-public works contracts taxable under Chapter 212, Florida Statutes, and Rule 12A-1.051, Florida Administrative Code?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made. Petitioner is a Florida Corporation having its principal place of business located at 560 Highway 27 North, Sebring, Florida 33820, and is subject to the taxes imposed under Chapter 212, Florida Statutes. The Department is the agency authorized to administer the tax laws of the State of Florida, pursuant to Section 213.05, Florida Statutes. The Department is authorized to prescribe the records to be kept by all persons subject to taxes under Chapter 212, Florida Statutes. Such persons have a duty to keep and preserve their records, and the records shall be open to examination by the Department or its authorized agents at all reasonable hours pursuant to Section 212.12(6), Florida Statutes. The Department is authorized to conduct audits of taxpayers and to request information to ascertain their tax liability, if any, pursuant to Section 213.34, Florida Statutes. The Department conducted an audit of Petitioner to determine if Petitioner was properly collecting and remitting sales and use tax to the Department. The audit covers the period from November 1, 1992, through October 31, 1997. Petitioner is a retail carpet store, selling carpet and other flooring material, both installed and non-installed, in Sebring, Florida, and the surrounding areas. An invoice is prepared for each sales transaction. Petitioner rents the building in which its business is conducted and where Petitioner’s inventory and supplies are stored. Petitioner pays rent monthly. During the audit period, tax was neither paid nor collected on the rent payments. Petitioner purchases carpet samples from out-of-state vendors for use in its business. During the audit period, sales tax was not paid on all purchases. Petitioner collected tax on the price of the carpet or other flooring materials, as reflected on the invoice, where the customer was a taxpaying entity and collected tax on the total price on the invoice when the invoice specified installation. Petitioner did not collect tax on the price of the carpet or other flooring material, as reflected on the invoice, for tax-exempt entities, whether the invoice reflected the carpet or other flooring material as installed or non-installed. On May 18, 1998, a Notice of Intent to Make Audit Changes was presented to Petitioner. Additional sales and use tax and infrastructure surtax were determined to be due for the following taxable events: (a) rental expenses; (b) taxable purchases of samples; and, (c) sales to tax-exempt entities where the sale of carpet or other flooring materials included installation to real property. On May 18, 1998, Petitioner paid the additional tax assessed for taxable rental expenses and taxable purchases of samples and has been given credit for such payment. Petitioner protests the tax assessed on the cost price of carpeting used where the customer was a tax-exempt entity and the sales price included installation. On July 16, 1998, the Department sent to Petitioner its Notice of Proposed Assessment showing that Petitioner owed additional sales and use tax and infrastructure surtax in the amount of $13,569.15 and $2,188.01, respectively. Added to the tax owed by Petitioner were penalties in the amount of $6,730.78 and $1,085.02, respectively, and interest through July 16, 1998, in the amount of $4,627.66 and $736.95, respectively. The total assessment was $24,927.59 and $4,009.98, respectively. Credits in the amount of $8,233.87 and $1,372.30 respectively, have been applied against the taxes assessed and reflect the payments made by Petitioner on May 18, 1998. The amount of taxable rental expenses reported on the audit work paper Schedule B010 is consistent with Petitioner’s monthly reports. The amount of taxable sample expenses reported on the audit work paper Schedule B020 is consistent with Petitioner’s monthly reports. 18 The amount of exempt sales reported on the audit work paper Schedule B030 is consistent with Petitioner’s monthly reports. Petitioner timely filed a written protest of the Department’s proposed assessment. On October 25, 1998, the Department issued its Notice of Decision as to the protest of Petitioner. The proposed assessment was sustained by the Department. All invoices in the Department’s Composite Exhibit numbered 2, with the exception of invoices numbered 68, 197, 262, 432, 481, 482, 497, and 498, which are related to transactions that do not involve real property, are records of contracts between Petitioner and the tax-exempt entity to furnish and install wall-to-wall carpet or other flooring materials on real property. There is no retained title provision in any of these contracts. With the exception of invoices numbered 68, 197, 262, 432, 481, 482, 497, and 498, the invoices contained in the Department’s Composite Exhibit numbered 2 reflect an improvement being made to real property. Each of the invoices in the Department’s Composite Exhibit numbered 2 corresponds to a specific entry in Schedule B030 of the audit work papers and which is included under Tab 7a, pages 19 through 32, of the Department’s Composite Exhibit numbered 1. When Petitioner installed, or subcontracted the installation of carpet, the carpet was affixed to the floor by glue, nails, or other means and became the finished floor. Although tack strips, glue, nails, seaming tape, and other items were not listed on the invoice, these items are commonly used in the industry to complete performance of contracts such as those involved in this proceeding. In providing for the installation of carpet or other flooring materials involved in this proceeding, Petitioner engaged subcontractors and paid the subcontractor by the square yard. The square yard price included all materials and labor. With some exceptions, such as metal strips, materials used in the installation of the carpet or other flooring materials were not reflected on the invoices. Since there was no itemization of parts and labor, the invoices contained in the Department’s Composite Exhibit numbered 2, with the exception of invoices numbered 68, 197, 262, 432, 481, 482, 497, and 498, are lump-sum contracts. During his testimony at the hearing, John T. Griffin described Petitioner’s invoices as lump-sum contracts. Petitioner argued that the Department had failed to provide the proper information and training concerning the Department’s position on the imposition of the tax. However, based on the testimony of the Department’s witnesses concerning this matter it appears that sufficient information and sufficient training concerning the Department’s position on the imposition of the tax was readily available to Petitioner or its employees. The noncompliance by Petitioner with the applicable sales and use tax rules was not due to willful negligence, willful neglect, or fraud. It is the recommendation of the Department’s employees that the penalty assessed in this matter be waived. As of January 18, 2000, the total sales and use tax, penalty, and interest was $17,658.80. The local governmental infrastructure total surtax, penalty, and interest was $2,786.58. These totals do not reflect a downward adjustment for the taxes, penalty, and interest assessed against invoices numbered 68, 197, 262, 432, 481, 482, 497, and 498. For these invoices, the adjustment for taxes assessed, penalty, and interest shall be calculated from the date of each specific invoice and Petitioner given credit for any taxes, penalty, or interest charged against it for invoices numbered 68, 197, 262, 432, 481, 482, 497, and 498. The interest that has been assessed for the taxes that were not paid on the rent of the building or the carpet samples is appropriate. Petitioner does not disagree with this interest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order upholding its assessments dated October 25, 1998, of sales and use tax, the local infrastructure surtax, plus applicable interest against Griffin Carpet Mart, Inc., with credit being provided for any payments made and for the assessments related to invoices numbered 68, 197, 262, 432, 481, 482, 497, and 498. It is further recommended after considering all the circumstances surrounding this case, that all penalties be waived. DONE AND ENTERED this 7th day of April, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 2000. COPIES FURNISHED: James F. McCollum, Esquire Law Offices of James F. McCollum, P.A. 129 South Commerce Avenue Sebring, Florida 33870-3698 John Mika, Esquire Nicholas Bykosky, Esquire Office of the Attorney General Department of Legal Affairs The Capitol, Tax Section Tallahassee, Florida 32399-1050 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Post Office Box 6668 Tallahassee, Florida 32314-6668
The Issue The issue in the case is whether the allegations of the Administrative Complaint for Revocation of Certification of Registration are correct.
Findings Of Fact At all times material to this case, the Respondent operated a used car dealership at 1014 West Central Boulevard, Orlando, Florida, 32805. At all times material to this case, the Respondent's registered corporate agent was identified as Jennifer Hamilton, 3517 Domino Drive, Orlando, Florida, 32805. Florida law requires specified persons conducting business within the state to register with the Petitioner and to obtain a certificate of registration essentially for purposes of tax collection. As a dealer, the Respondent was required to register with the Petitioner and received Certificate of Registration No. 58-8011915294-5 from the Petitioner. As a dealer, the Respondent was required to collect sales and use taxes from purchasers and to submit monthly tax returns and collected taxes to the Petitioner. The Respondent filed proper tax returns, but failed to remit taxes received for the following months: September 2004, October 2004, December 2004, January 2005 through October 2005, December 2005, March 2007 through July 2007, and September 2007 through December 2007. The unremitted taxes totaled $21,194.32. Based on the Respondent's failure to remit the taxes, on July 22, 2008, the Petitioner assessed a penalty of $3,271.64 pursuant to Subsection 212.12(2), Florida Statutes. Based on the Respondent's failure to remit the taxes, the Petitioner assessed interest charges of $4,304.62 (as of July 22, 2008) pursuant to Subsection 212.12(3), Florida Statutes. The interest charges continue to accrue until they are paid. The Respondent failed to file tax returns for the months of January 2008 through July 2008. Pursuant to Subsection 212.12(5), Florida Statutes, the Petitioner assessed an estimated tax liability of $3,500.00 against the Respondent. Pursuant to Subsection 212.15(4), Florida Statutes, the Petitioner has recorded warrants in the public records of Orange County, Florida, for the unpaid taxes. Pursuant to Subsection 212.18(3)(d), Florida Statutes, the Petitioner issued a Notice of Conference of Revocation of Certificate of Registration dated July 30, 2008, and an informal conference was conducted on September 4, 2008. No one appeared at the conference on behalf of the Respondent. The Petitioner thereafter filed the Administrative Complaint underlying this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a final order revoking the certificate of registration held by the Respondent. DONE AND ENTERED this 3rd day of March, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 3rd day of March, 2009.
The Issue The issue is whether petitioner, a sales tax dealer, must pay taxes, interest and penalties for collecting sales taxes on certain nontaxable transactions and then failing to remit those funds to respondent.
Findings Of Fact Based upon all of the evidence, including the pleadings, filings, and stipulation of counsel, the following findings of fact are determined: On an undisclosed date, respondent, Department of Revenue (DOR), conducted an audit of petitioner, Blackshears II Aluminum, Inc. (Blackshears), a registered sales tax dealer located in Crystal River, Florida. The audit covered the period from June 1, 1985, through March 31, 1989. As a result of that audit, on December 27, 1989, DOR issued a notice of intent to make sales and use tax audit charges. After petitioner availed itself of various informal procedures, a notice of reconsideration (notice) was issued on January 7, 1992, imposing a final assessment of $623,131.69. This action prompted Blackshears to initiate this proceeding. Although the notice addressed five issues, only issue three is relevant to this proceeding. That issue is broadly defined in the notice as "whether taxes collected on nontaxable transactions are state funds." According to the notice, the issue should be answered in the affirmative because (e)very dealer in the State of Florida is an agent for the state in that it is their responsibility to collect and remit sales tax. Blackshears collected the funds in the name of the State of Florida and has presented no refund assignments from the purchasers to permit them to apply for refunds, therefore, the State of Florida is due the funds. If the Department were to permit the use of its name to unjustly enrich Blackshears, a continuing deception would occur. The parties agree that petitioner collected sales taxes on various transactions (real property contracts) during the audit period. Whether such transactions were subject to the sales tax is in dispute, but for purposes of resolving the issue presented here, the parties have agreed that the undersigned can assume that the transactions were nontaxable. It is further agreed that even though petitioner collected the taxes from its customers, it failed to remit them to the state, and it has likewise failed to furnish proof that it refunded those moneys to its customers. Accordingly, DOR's assessment seeks to collect those taxes together with interest and substantial penalties. The parties have also agreed that the portion of the total tax assessment attributable to real property contracts is $277,406.53. As of March 29, 1993, the assessment totaled $636,570.37, after the accrual of interest and penalties. However, petitioner has paid to the state $16,180.19, for which it should receive credit. During the audit period, Rule 12A-1.014(6), Florida Administrative Code, was in effect and provided as follows: (6) Whenever a dealer credits a customer with tax on returned merchandise or for tax erroneously collected, he must refund such tax to his customer before his claim to the State for credit or refund will be approved. Under the terms of this rule, which interpreted the provisions of Chapter 212, Florida Statutes, any moneys erroneously collected by a dealer as taxes were to be remitted to the state. However, if the moneys were refunded to the customer, the dealer could then receive a refund of the moneys previously paid or a credit towards other taxes due.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent enter a final order granting its motion for partial summary adjudication and sustaining the assessment on issue three of its notice of reconsideration, plus interest and penalties, less those taxes already paid and identified in paragraph 2 of the parties' joint stipulation. DONE and ENTERED this 3rd day of May, 1993, in Tallahassee, Florida. DONALD R. ALEXANDER 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 3rd day of May, 1993. COPIES FURNISHED: Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100 Linda Lettera, Esquire 204 Carlton Building Tallahassee, FL 32399-0100 C. Lynne Chapman, Esquire Department of Legal Affairs The Capitol-Tax Section Tallahassee, FL 32399-1050 Harold F. X. Purnell, Esquire 315 South Calhoun Street Suite 500 Tallahassee, FL 32301
Findings Of Fact The facets herein are undisputed. On May 31, 1973 Petitioner purchased Thomas Concrete Company, and on February 28, 1973 Petitioner purchased Kelly Builders, Inc. Both companies were forthwith liquidated and federal income tax returns were filed in which depreciation in excess of fair value of the properties was recaptured for federal tax purposes. In his state corporate income tax returns Petitioner claimed deduction for that portion of the recaptured depreciation which occured prior to November 2, 1971, the effective date of the Florida Corporate Income Tax Statute. These deductions were disallowed by the Department of Revenue, that portion of the tax relating to Thomas Concrete Company was paid under protest, the portion relating to Kelly Builders, Inc. was not paid, and this petition was filed. In 1974 Petitioner sold real property on which it made a substantial capital gain. In computing its federal income tax the full capital gain was reported. However, that portion of its capital gain accruing prior to November 2, 1971 was excluded from its Florida corporate income tax and the assessment of $50,494.75 was levied against Petitioner by Respondent, Department of Revenue for the full amount of the capital gain as income received in 1974. The two issues here involved are whether Petitioner is taxable under Chapter 220 F.S. on depreciation taken prior to the effective date of Chapter 220, and subsequently recaptured, and whether Petitioner is taxable under Chapter 220, F.S. for the full amount of capital gain realized on property held prior to the effective date of Chapter 220 where part of appreciation occurred prior to the effective date of the Florida Corporate Income Tax law.
Findings Of Fact The State of Florida, Department of Revenue issued to the Petitioners a tax warrant dated May 12, 1986, for sales and use tax alleged to be due and delinquent, interest, penalties, and filing fees in the total sum of $8,269.95. Susan R. Bayer is the owner of a parcel of property located in Hillsborough County, Florida, commonly known as 3001 East Hillsborough Avenue, having become the owner of that property on February 29, 1984. Lloyd W. Bayer owned the property in finding 2 above prior to February 29, 1984. When Susan Bayer became the owner of the property, she became the successor in interest to a lease between Brown Bayer, Inc., and Creech Produce, Inc., wherein a portion of the property was leased to Creech Produce, Inc., for use by Creech Produce, Inc., to let sellers of produce use a space to park a vehicle to sell produce out of the vehicle. This business of Creech was licensed by the City of Tampa as a parking lot. The spaces in the lot were rented on a nightly basis and rent was collected on a nightly basis. There were no terms of rentals for periods longer than a nightly basis. The persons parking vehicles in the spaces generally sold wholesale produce out of the vehicles but not all of them did so, and there was no requirement the vehicles occupying these spaces be used for any specific purpose. In 1985, Susan Bayer filed proceedings against Creech Produce, Inc., seeking to revoke the lease to Creech. One ground alleged in this complaint (Exhibit 8) was that Creech was using the property in violation of state laws and regulations in failing to collect sales taxes on the parking fees and remit same to the Department of Revenue. The court not only ruled against Bayer on the eviction proceedings but extended the lease for an additional year. The lease to Creech (Exhibit 5) provided, inter alia, that the lessee would pay 1/2 of the sanitation expense paid by the lessor and that portion of electricity used for the portion of the building used and the lights for the outside of the property." The electricity was billed to the lessor and, pursuant to this lease provision, Creech remitted its share of the bill to the lessor. This payment for electricity by Creech was included by Respondent as rent on which the sales tax was levied. Exhibit 3 clearly conveys the intent of the parties to lease the property to be used by the lessee as a parking lot for the vehicles from which produce was to be sold and that the lessee could collect the fees for the use of these parking spaces. On February 1, 1984, Bayer entered into an Agreement for Purchase and Sale (Exhibit 2) with Bobby Lee McGilvery and Adella Fisher to sell the business known as Farmer Jahn's Ice to the latter. This business consisted of two icemaking machines on the premises of 3001 East Hillsborough Avenue, storage- disposing facilities at about 60 locations in Tampa, a pickup truck, step-van, ice baggers, bags, etc. McGilvery had worked for Bayer in this business of making and selling ice cubes for 15 years and purchased the business with no money down for a total price of $125,000 to be paid at the rate of $1,275 per month at 10 percent interest until the total of $125,000 is paid. Exhibit 2 provided that a separate lease agreement for the property occupied by the business would be executed providing for payment of $500 per month. A promissory note in the amount of $125,000 payable to Bayer was executed by McGilvery and Fisher (Exhibit 3) which provided for payment of $1,725 per month with interest at 10 percent until the total of $125,000 was paid. There appears to have been a scrivener's error in the preparation of the note so far as the monthly payment is concerned. Since the sale agreement provided for the business to be paid for at $1,275 per month and a rental price of $500 per month the monthly payments should have been $1,775. The Business Lease executed February 1, 1984, (Exhibit 4) provided "consideration for this lease is the note on the sale of the business." The auditor for Respondent based his sales tax calculation solely on the Business Lease (Exhibit 4) and the promissory note and calculated the tax on a rental of $1,725 per month. McGilvery and Fisher defaulted on the payments on the note and the business was recaptured by Petitioner. Having no lien on the personal property sold to the buyers Petitioner was able to recover only a small portion of those items enumerated in Finding 9 above.
The Issue The issue in this case is whether the Respondent's certificates of registration should be revoked for an alleged failure to file tax returns and to remit taxes to the Petitioner.
Findings Of Fact The Petitioner is the state agency responsible for collection of sales and use taxes in Florida, pursuant to chapter 212, Florida Statutes (2011).1/ The Respondent is a Florida company doing business at 7810 U.S. Highway 19, Port Richey, Florida, and is a "dealer" as defined at section 212.06(2). The Respondent holds two certificates of registration issued by the Petitioner (Certificate No. 61-8012297146-3 and Certificate No. 61-8012297147-0) and is statutorily required to file tax returns and remit taxes to the Petitioner. As set forth herein, the Respondent has failed to file tax returns or has filed returns that were not accompanied by the appropriate tax payments. During the time the Respondent has held the certificates, the Petitioner has filed 15 separate warrants against the Respondent related to unpaid taxes, fees, penalties, and interest. The Petitioner is authorized to cancel a dealer's certificate of registration for failure of a dealer to comply with state tax laws. Prior to such cancellation, the Petitioner is required by statute to convene a conference with a dealer. On June 24, 2011, the Petitioner issued a Notice of Conference on Revocation of Certificate of Registration (Notice). The conference was scheduled for July 27, 2011. The Respondent received the Notice and attended the conference. Certificate of Registration No. 61-8012297146-3 The Respondent failed to file tax returns related to Certificate No. 61-8012297146-3 for the period of August through December 2001. The Petitioner assessed estimated taxes of $587.50, fees of $110.95, and a penalty of $285.00. As of the date of the Notice, the accrued interest due was $633.79. Additionally, the Respondent failed to remit taxes of $5,623.63 related to Certificate No. 61-8012297146-3 that were due according to his filed tax returns. Based thereon, the Respondent assessed fees of $994.58 and a penalty of $2,478.26. As of the date of the Notice, the accrued interest due was $4,702.27. As of the date of the Notice, the Respondent's total unpaid obligation on Certificate No. 61-8012297146-3 was $15,415.98, including taxes of $6,211.13, fees of $1,105.53, penalties of $2,763.26, and accrued interest of $5,336.06. Certificate of Registration No. 61-8012297147-0 The Respondent failed to file tax returns related to Certificate No. 61-8012297147-0 for the months of June 2000, September 2000, May 2001, and August 2001. The Petitioner assessed estimated taxes of $619.00 and fees of $202.00. As of the date of the Notice, the accrued interest due was $782.56. Additionally, the Respondent failed to remit taxes related to Certificate No. 61-8012297147-0 of $4,332.48 that were due according to his filed tax returns. Based thereon, the Respondent assessed fees of $771.71 and a penalty of $1,576.87. As of the date of the Notice, the accrued interest due was $4,725.27. As of the date of the Notice, the Respondent's total unpaid obligation related to Certificate No. 61-8012297147-0 was $13,009.89, including taxes of $4,951.48, fees of $973.71, penalties of $1,576.87, and accrued interest of $5,507.83. The Audit A separate audit of the Respondent's business records for the period of February 2004 through January 2007 resulted in an additional assessment totaling $9,314.07, including taxes of $5,048.23, fees of $661.76, and a penalty of $252.42. As of the date of the Notice, the accrued interest due was $3,351.66. At the July 27, 2011, conference, the parties negotiated a compliance agreement under which the Respondent would have retained the certificates of registration. The agreement required the Respondent to make an initial deposit of $2,000.00 by August 15, 2011, and then to make periodic payments towards satisfying the unpaid obligation. The Respondent failed to pay the $2,000.00 deposit, and the Petitioner subsequently filed the Complaint at issue in this proceeding. As of the date that the Complaint was filed, the Respondent owed a total of $37,797.66 to the State of Florida, including taxes of $15,004.34, estimated taxes of $1,206.50, fees of $2,741.00, penalties of $4,592.55, and accrued interest of $14,253.27.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue issue a final order revoking the certificates of registration held by the Respondent. DONE AND ENTERED this 1st day of May, 2012, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 1st day of May, 2012.
The Issue The central issue in this case is whether the Petitioner owes sales, use, intangible taxes, penalties and interest; and, if so, the amount.
Findings Of Fact Petitioner, Allor, Inc., performs accounting services through the individual, Allan Steinberg. Subsequent to an audit of one of Mr. Steinberg's clients, the Department directed Curt Horton, a tax auditor, to perform an audit of Allor, Inc. In furtherance of the audit, Mr. Horton requested records necessary to complete the review. He discussed the audit with Mr. Steinberg and advised him of all records needed. When Mr. Steinberg produced no records the audit was estimated based on the federal tax return. Later, Mr. Horton adjusted the estimate based on actual deposits for sales. For purchases, a one year period was selected and, again, the federal tax return was reviewed. The audit was performed in this manner as the records offered by the taxpayer were insufficient to perform the audit in the more conventional format. Mr. Horton made numerous requests to the taxpayer for documentation. Mr. Horton extended the time to provide records so that the taxpayer had additional opportunity to document the audit. Credit was given for invoices that the taxpayer was able to produce and, for the remainder of the period, the amounts were averaged to determine the tax amount owed. The sales and use tax audit covered the period December 1, 1985, through November 30, 1990. The amount of the tax owed was calculated at $4,933.35. The amount of the penalty was $1,099.92. The interest owed through October 11, 1991, was $2,026.61. Based upon the foregoing, the total assessment for this audit was $8,059.88 with interest continuing to accrue at the rate of $1.62 per day. With regard to the intangible tax assessment for the period 1984 through 1991, Mr. Horton computed the accounts receivable and estimated that $2,000.00 per year would be the amount for this category. Since this taxpayer filed no intangible tax returns at all, the penalty owed was high relative to the tax amount owed. Based upon the foregoing computation, the intangible tax owed calculated to be $33.33 whereas the penalty for not filing was $2,763.55. The interest through September 20, 1991, was $14.76. Based upon the foregoing, the total assessment for the intangible tax owed was $2,811.64 with interest continuing to accrue at the rate of $.01 per day. Following the audit, the results of which were made available to the taxpayer on or about March 20, 1992, the Department issued a notice of decision on April 23, 1993, which responded to a protest letter filed by Petitioner on May 15, 1992. In substance, that notice sustained the results of the audit and noted that the taxpayer had not presented any additional documentation to support a conclusion to the contrary. Thereafter, the Petitioner filed another letter of protest and the Department issued a notice of reconsideration on February 7, 1994. That notice provided that upon further review, the proposed sustained amount for the sales and use tax was $6,945.63 and the amount owed for the intangible audit assessment was $48.09. This latter amount was reduced because the Department proposed to compromise the penalty in full. All of the acts of the auditor in this case were in keeping with the standard audit practices of the Department. None of the documents marked for identification as Petitioner's composite 2, which have not been received into evidence, were made available to the Department at any time during the audit. The Department afforded the Petitioner approximately three years after the audit to produce relevant documentation.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Revenue enter a final order sustaining the proposed sustained amounts set forth in the notice of reconsideration dated February 7, 1994. DONE AND RECOMMENDED this 28th day of September, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1892 Rulings on the proposed findings of fact submitted by the Petitioner: 1. None submitted. Rulings on the proposed findings of fact submitted by the Respondent: 1. Paragraphs 1 through 11 are accepted. COPIES FURNISHED: Allan D. Steinberg Tax Accountant Allor, Inc. Suite 14-B 4953 North University Drive Lauderhill, Florida 33351 Mark T. Aliff Assistant Attorney General Office of the Attorney General The Capitol-Tax Section Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director 104 Carlton Building Tallahassee, Florida 32399-0100
