The Issue The issue for determination is whether Respondent committed the offenses set forth in the Administrative Complaint for Revocation of Certificate of Registration issued on November 16, 2009, and, if so, what action should be taken.
Findings Of Fact There is no dispute that the Department is the state agency charged with the responsibility of regulating, controlling, and administering the revenue laws of the State of Florida, including the laws relating to the imposition and collection of the state's sales and use tax pursuant to chapter 212, Florida Statutes. There is no dispute that Abkey is a Florida corporation whose principal address is 7800 Southwest 104th Street, Miami, Florida 33156. Abkey is a restaurant. At the time of hearing, Abkey had 33 employees and was operating at a deficit. There is no dispute that, at all times material hereto, Abkey possessed Florida sales tax certificate of registration number 23-8012096448-9, issued by the Department on April 18, 1994. There is no dispute that Abkey is a dealer as defined in section 212.06(2), Florida Statutes, and has been a dealer at all times material hereto. For the month of June 2009, Abkey failed to file a sales tax return. As a result of this failure, the Department assessed Abkey an estimated sales tax due in the amount of $9,500.00. For 2005, Abkey failed to remit its self-reported sales tax liability to the Department for the months of July, September, October, November, and December. Abkey self-reported its tax liability, by filing sales tax returns, for the said months. For 2006, Abkey failed to remit its self-reported sales tax liability to the Department for the months of January and May. Abkey self-reported its tax liability, by filing sales tax returns, for the said months. Also, for 2006, Abkey failed to timely remit its sales tax liability for the month of October for which the Department assessed a penalty and an administrative/collection/processing fee. For 2007, Abkey failed to remit its self-reported sales tax liability to the Department for the months of February and August. Abkey self-reported its tax liability, by filing sales tax returns, for the said months. Also, for 2007, Abkey failed to timely remit its sales tax liability for the month of October, for which the Department assessed a penalty and an administrative/collection/processing fee. In total, for 2005, 2006, and 2007, Abkey self- reported sales tax due and failed to remit to the Department sales tax reportedly due in the amount of $122,355.36. As a result of Abkey's failure to file the sales tax return, to remit the $122,355.36 in sales tax, and to remit timely sales tax, the Department assessed Abkey, as of October 29, 2009, $16,287.59 in interest, $4,891.73 in penalties, and $13,845.10 in administrative/collection/ processing fees. Additionally, for the month of February 2007, Abkey issued to the Department a dishonored check (electronic funds transfer) on March 23, 2007, in the amount of $18,254.00. The Department assessed a $150.00 return check fee for the dishonored check. Shortly after being notified of the dishonored check by the Department, Abkey paid the $18,254.00. Abkey has a significant history of delinquency in remitting payments to the Department. The Department made several attempts, unsuccessfully, to collect the delinquent tax liabilities, including issuing Tax Warrants. In January 2007, the Department sought to revoke Abkey's Certificate of Registration for delinquent returns and outstanding liability and engaged in an informal conference with Abkey. As a result of the informal conference, Abkey and the Department entered into a Compliance Agreement executed on February 15, 2010. The Compliance Agreement required Abkey, among other things, to remit all past due payments; for 12 months (January through December 2007), to timely file tax returns and to timely remit all sales tax due; and to make a down payment of $45,000.00 (in three monthly installments but no later than April 1, 2007), 11 monthly payments of $5,000.00 (beginning May 1, 2007), and a balloon payment of $141,982.43 on April 1, 2008. Further, regarding the balloon payment of $141,982.43, the Compliance Agreement provided that the balloon payment might be negotiated for another 12 months. However, in order for Abkey to take advantage of this provision, Abkey was required to be compliant with the terms of the Compliance Agreement and its account was required to be in good standing with the Department. In accordance with the Compliance Agreement, Abkey paid the down payment of $45,000.00 (in three monthly installments) and the 11 payments of $5,000.00 although the 11 payments were late. Additionally, for the period of January through December 2007, Abkey was late filing tax returns and remitting sales tax. Abkey requested a renewal of the Compliance Agreement. Despite the late payments, the Department approved the renewal of the Compliance Agreement. A Compliance Agreement Renewal was executed on May 1, 2008. It required Abkey, among other things, to remit all past due payments and to timely file tax returns and timely remit all sales tax due for the next 12 months (May 1, 2008 through April 30, 2009); and to make 11 monthly payments of $5,000.00 (beginning May 1, 2008), and a balloon payment of $120,749.14 on April 1, 2009. Furthermore, regarding the balloon payment of $120,749.14, the Compliance Agreement Renewal provided that the balloon payment might be negotiated for another 12 months. However, in order for Abkey to take advantage of this provision, Abkey was required to be compliant with the terms of the Compliance Agreement Renewal and its account was required to be in good standing with the Department. Under the Compliance Agreement Renewal, Abkey made four payments of $5,000.00 but the payments were late. Abkey requested a reduction in the amount of the monthly payments from $5,000.00 to $2,000.00. The Department granted Abkey's request. Abkey made 12 payments of $2,000.00 but the payments were late. Additionally, for the period of May 1, 2008 through April 30, 2009, Abkey was late filing tax returns and remitting sales tax. Further, Abkey failed to make the balloon payment of $120,749.14 that was due on April 1, 2009. Abkey did not request a renegotiation of the balloon payment. At that time, Abkey did not request another Compliance Agreement. As of September 28, 2010, Abkey owed the Department $122,355.36 in actual sales tax (per Abkey's sales tax returns), $9,500.00 in estimated tax, $4,419.73 in penalty2, $14,572.80 in administrative/collection/processing fees3, $25,032.28 in interest, and $20.00 in warrant fees; totaling $175,900.17. The Department seeks to revoke Abkey's Certificate of Registration.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order revoking the Certificate of Registration issued to and held by Abkey No. 1 Limited. DONE AND ENTERED this 18th day of February, 2011, in Tallahassee, Leon County, Florida. S ERROL H. POWELL 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 18th day of February, 2011.
Findings Of Fact During the three year period from October 1, 1974 through September 30, 1977 Air Jamaica purchased prepared meals from Jerry's Caterers at Miami (Jerry's) in the total amount of $740,760.04 and Taca purchased prepared meals from Jerry's in the total amount of $161,379.72. Sales tax, penalty and interest through March 20, 1978 were assessed against Air Jamaica in the amount of $35,291.54 on the total paid for meals from Jerry's. Sales tax plus interest through November 20, 1977 were assessed against Taca in the amount of $9,359.86 on the total paid for meals from Jerry's. These figures are accepted as accurately representing 4 percent of the cost of meals purchased plus interest and penalties. The operations with respect to the meals were identical for both Air Jamaica and Taca. Prepared meals were delivered to the aircraft by Jerry's in trays holding 25 meals. These trays are supplied with heating elements and act as ovens in which the meals are heated. When placed aboard the aircraft by Jerry's' employees the trays holding meals intended to be served hot are plugged into electrical outlets on the plane. Prepared food delivered to the aircraft by Jerry's intended to be served cold obviously are not plugged into the electrical outlets. Air Jamaica departs from Miami and serves only Montego Bay and Jamaica. Taca departs from Miami and serves the cities of Belize, El Salvador, Nicaragua and Panama. Some 30 to 50 minutes after leaving Miami each company serves a meal for which no separate charge is made to the passenger. At the time these meals are served the aircraft is well outside the boundaries of Florida and either over Cuba or international waters. Although no separate charge is made for the meal served the cost of the meal, like every other operational and administrative cost, is considered in arriving at the air fare charged to the passenger for the transportation from Miami to destination. Jerry's bills the airlines for the number of meals delivered at a wholesale price of $3.48 per meal for meals served to first class passengers and $2.19 for meals served to economy passengers. Each airline provided Jerry's with tax resale certificates which relieved Jerry's from the collection of sales tax on meals delivered to the aircraft.
The Issue Whether the Department of Revenue (DOR) has properly issued an assessment against Petitioner for sales and use tax, interest, and penalty.
Findings Of Fact Petitioner is a Florida resident. In 1996, Petitioner began doing business as a sole proprietor under the name of "Duraline Industries" and registered with DOR as a sales tax dealer. Later, this entity was called "Dura Steel." Petitioner also operated as a corporation, Steel Engineered Design Systems, Inc. Petitioner's Florida sales tax numbers are 42-11-009271-63 and 40-00-003416- For purposes of these consolidated cases, Petitioner has been audited and charged individually as "Charles R. Bielinski," because the audit revealed that no checks were made out to the corporation(s) and that the monies received were received by Mr. Bielinski as a sole proprietor in one or more "doing business as" categories. Petitioner engaged in the business of fabricating items of tangible personal property, i.e., prefabricated steel buildings, many of which later became improvements to real property in Florida. Petitioner used some of the steel buildings in the performance of real property contracts by installing the buildings as improvements to real property. Petitioner also engaged in the business of selling buildings and steel component parts such as sheets and trim in Florida. Petitioner sold buildings and component parts in over- the-counter retail sales, also. On October 7, 2002, DOR issued Petitioner a Notification of Intent to Audit Books and Records for the period of September 1, 1999 through August 31, 2002. This audit was assigned number AO226920428. In 2002, Petitioner provided DOR's auditor with his sales activity records, such as contracts and job information. A telephone conversation/interview of Petitioner was conducted by the auditor. Over a period of several months, the auditor attempted to get Petitioner to provide additional records, but none were forthcoming. DOR deemed the contracts and job information provided by Petitioner to be an incomplete record of his sales activity for the audit period. Petitioner claimed that most of his sales activity records had been lost or destroyed. Due to the absence of complete records, DOR sampled Petitioner's available records and other information related to his sales in order to conduct and complete its audit. Petitioner purchased materials used to fabricate his steel buildings. Petitioner sometimes would erect the buildings on real property. Petitioner fabricated main frames for smaller buildings at a shop that he maintained at the Bonifay Airport. Otherwise, Petitioner subcontracted with like companies to fabricate main frames for larger buildings. Petitioner made some sales to exempt buyers, such as religious institutions and government entities. When he purchased the materials he used to fabricate the buildings, Petitioner occasionally provided his vendors with his resale certificate, in lieu of paying sales tax. Petitioner did not pay sales tax on the materials he purchased to fabricate buildings when such buildings were being fabricated for exempt buyers such as churches and governmental entities. On June 23, 2003, DOR issued Petitioner a Notice of Intent to Make Audit Changes (Form DR-840), for audit number AO226920428, covering the period of November 1, 1997 through August 31, 2002. DOR has assessed Petitioner sales tax on the buildings, sheets, and trim he sold over-the-counter in Florida. DOR has assessed Petitioner use tax on sales of the materials used in performing real property contracts in Florida. The auditor calculated a method of estimating taxes based on the limited documentation that had been provided by Petitioner. She used a sampling method based on Petitioner's contract numbering system; isolated the Florida contracts; and divided the Florida contracts between the actual sale of tangible property (sale of just the buildings themselves) and real property contracts (where Petitioner not only provided the building but also provided installation or erection services). The auditor scheduled the real property contracts and assessed only the material amounts as taxable in Florida. Since she had only 19 out of 47 probable contracts, or 40 percent, she projected up to what the taxable amount should be and applied the sales tax and surtax at the rate of seven percent, as provided by law. She then divided that tax for the entire audit period by the 58 months in the audit period, to arrive at a monthly tax amount. This monthly tax amount was broken out into sales and discretionary sales tax. Florida levies a six percent State sales tax. Each county has the discretion to levy a discretionary sales tax. Counties have similar discretion as to a surtax. The auditor determined that Petitioner collected roughly $22,000.00 dollars in tax from one of his sales tax registrations which had not been remitted to DOR. During the five-year audit period, Petitioner only remitted tax in May 1998. DOR gave Petitioner credit for the taxes he did remit to DOR during the audit period. The foregoing audit processes resulted in the initial assessment(s) of August 28, 2003, which are set out in Findings of Fact 25-31, infra. On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR-832/833), for additional discretionary surtax, in the sum of $2,582.19; interest through August 28, 2003, in the sum of $782.55; and penalty, in the sum of $1,289.91; plus additional interest that accrues at $0.50 per day. (DOAH Case No. 04-0008) On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR 832/833), for additional sales and use tax in the sum of $154,653.32; interest through August 28, 2003, in the sum of $50,500.06; and penalty, in the sum of $77,324.54, plus additional interest that accrues at $31.54 per day. (DOAH Case No. 04-0009) On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR 832/833), for additional local governmental infrastructure surtax, in the sum of $7,001.82; interest through August 28, 2003, in the sum of $2,352.09; and penalty in the sum of $3,497.35; plus additional interest that accrues at $1.45 per day. (DOAH Case No. 04-0010) On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR 832/833), for additional indigent care surtax, in the sum of $513.08; interest through August 28, 2003, in the sum of $156.33; and penalty, in the sum of $256.24; plus additional interest that accrues at $0.10 per day. (DOAH Case No. 04-0011) On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR 832/833), for additional school capital outlay surtax in the sum of $3,084.49; interest through August 28, 2003, in the sum of $922.23; and penalty, in the sum of $1,540.98; plus additional interest that accrues at $0.60 per day. (DOAH Case No. 04-0012) On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR 832/833), for additional charter transit system surtax, in the sum of $2,049.22; interest through August 28, 2003, in the sum of $766.07; and penalty, in the sum of $1,023.27; plus additional interest that accrues at $0.46 per day. (DOAH Case No. 04-0013) On August 28, 2003, DOR issued Petitioner a Notice of Proposed Assessment (Form DR 832/833), additional small county surtax, in the sum of $10,544.51; interest through August 28, 2003, in the sum of $3,437.85; and penalty in the sum of $5,282.30; plus additional interest that accrues at $2.15 per day. (DOAH Case No. 04-0014) However, the auditor testified at the May 13, 2004, hearing that she attended Petitioner's deposition on March 18, 2004. At that time, Petitioner provided additional documentation which permitted the auditor to recalculate the amount of tax due. The auditor further testified that she separated out the contracts newly provided at that time and any information which clarified the prior contracts she had received. She then isolated the contracts that would affect the Florida taxes due. Despite some of the new information increasing the tax on some of Petitioner's individual Florida contracts, the result of the auditor's new review was that overall, the contracts, now totaling 33, resulted in a reduction in total tax due from Petitioner. These changes were recorded in Revision No. 1 which was attached to the old June 23, 2003, Notice of Intent to Make Audit Changes, which was sent by certified mail to Petitioner. The certified mail receipt was returned to DOR as unclaimed. The auditor's calculations reducing Petitioner's overall tax are set out in Respondent's Exhibit 16 (Revision No. 1). That exhibit appears to now show that taxes are owed by Petitioner as follows in Findings of Fact 34-40 infra. For DOAH Case No. 04-0008, discretionary surtax (tax code 013), Petitioner only owes in the amount of $1,937.37, plus penalties and interest to run on a daily basis as provided by law. For DOAH Case No. 04-0009, sales and use tax (tax code 010), Petitioner only owes in the amount of $111,811.04, plus penalties and interest to run on a daily basis as provided by law. For DOAH Case No. 04-0010, local governmental infrastructure surtax (tax code 016), Petitioner only owes in the amount of $5,211.00, plus penalties and interest to run on a daily basis as provided by law. For DOAH Case No. 04-0011, indigent care surtax (tax code 230), Petitioner only owes in the amount of $317.39, plus penalties and interest to run on a daily basis as provided by law. For DOAH Case No. 04-0012, school capital outlay tax (tax code 530), Petitioner only owes in the amount of $2,398.68, plus penalties and interest to run on a daily basis as provided by law. For DOAH Case No. 04-0013, charter transit system surtax (tax code 015), Petitioner only owes in the amount of $1,558.66, plus penalties and interest to run on a daily basis as provided by law. For DOAH Case No. 04-0014, small county surtax (tax code 270), Petitioner only owes in the amount of $7,211.83, plus penalties and interest to run on a daily basis as provided by law.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law set forth above, it is RECOMMENDED that the Department of Revenue enter a final order upholding the amount of tax calculated against Petitioner in its June 21, 2003, Notice of Intent to Make Audit Changes, Revision No. 1, in the principal amounts as set forth in Findings of Fact Nos. 34-40, plus interest and penalty accruing per day as provided by law, until such time as the tax is paid. DONE AND ENTERED this 14th day of July, 2004, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 July, 2004.
The Issue The issue presented is whether Petitioner is liable for payment of sales and use taxes.
Findings Of Fact The Department conducted an audit of the business records of Petitioner, a Florida corporation operating a food catering business, covering the audit period of June 1, 1985 through May 31, 1990. As a result of that audit, the Department determined that Petitioner had failed to collect and remit sales taxes due to the Department and was liable for the payment of those unpaid sales taxes. The Department issued an assessment determining that Petitioner owed the amount of $213,683.87 in unpaid taxes, interest, and penalty for the audit period. On October 9, 1992, the Department issued its second revised audit assessment based upon its redetermination of Petitioner's tax liability. On that date, the Department reduced Petitioner's liability to the amount of $147,924.45, which sum includes the unpaid tax, the penalty therefor, and interest through that date. Based on its revised calculations, the Department also determined that interest would accrue at the rate of $27.06 per day until the date of payment. Through the date of the final hearing in this cause, Petitioner has made no payments to satisfy or reduce the amount of assessment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Petitioner liable for the payment of sales tax, penalty, and interest through October 9, 1992, in the amount of $147,924.45 together with the amount of $27.06 interest per day until the date of payment. DONE and ENTERED this 18th day of August, 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 18th day of August, 1994. APPENDIX TO RECOMMENDED ORDER The Department's proposed findings of fact numbered 1 and 6-8 have been adopted in substance in this Recommended Order. The Department's proposed findings of fact numbered 2-5 and 9-16 have been rejected as not constituting findings of fact but rather as constituting conclusions of law or recitation of the procedural context of this case. COPIES FURNISHED: Eric J. Taylor, Esquire Assistant Attorney General Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 Richard J. Hays, Esquire 7100 West Commercial Boulevard Suite 109 Lauderhill, Florida 33319 Mark D. Cohen, Esquire 121 Southeast First Street Suite 600 Miami, Florida 33131 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Modern Tool and Die, (MTD), is a privately held corporation engaged in manufacturing equipment. In 1965 they started the manufacture of bumper guards which required electroplating. They entered into agreements with MPC pursuant to which MTD erected two buildings adjacent to their plant which they leased to MPC in which to do the electroplating of the bumper guards. MPC is also a privately held corporation and there is no common ownership of these two companies. The two buildings built for MPC's occupancy were partitioned, compartmented and wired as desired by MPC and at its expense. Florida Power Corporation supplied electricity to the complex through the main transformer of MTD. In 1965 and to a lesser extent now, electricity rates per kilowatt-hour (kwh) were lowered with increased usage of electricity. Since both MTD and MPC are large users of electricity they obtain a cheaper rate if all electricity used is billed from the master meter serving MTD. Accordingly, and at the recommendation of the power company, additional transformers and meters were placed at the two buildings occupied by MPC and read monthly at or about the same time the master meter is read by the power company. The kw used at the two buildings is forwarded by MPC to MTD each month. The latter, upon receipt of the power company bill, computes the cost of the power per kwh and in turn bills MPC for its portion of the bill based upon the usage forwarded by MPC to MTD. Upon the commencement of this working agreement between these two companies in 1965 MPC, pursuant to an oral lease, has paid rent to MTD monthly at the rate of approximately $2,400 per month. It has also paid to MTD its pro rata cost for the electricity used each month. The rent is invoiced each month on the first of the month as in Exhibit 3 and paid by the 10th by MPC. Sales tax is added to the rent and remitted to DOR. Electricity usage is also invoiced by MTD to MPC on or about the 20th of the month and paid by MPC on or about the first of the following month. (Exhibit 4). Sales tax on the electricity used is paid by MTD to Florida Power Company who presumably remits this to DOR. During the 15 years these two companies have shared the cost of electric power they have been audited numerous times; the arrangement was made known to the auditors; and no auditor, prior to the present, suggested that the cost of electricity was part of the rent paid by MPC upon which sales tax was due. Notice of Proposed Assessment (Exhibit 1) in the amount of $9,747.34 is based upon the cost of electricity billed to MPC during the period of the audit December 1, 1976 through November 30, 1979 multiplied by 4 percent sales tax plus penalties and interest. The parties stipulated to the accuracy of this amount. They differ only as to whether the tax is owed.
Findings Of Fact High-Tech Yacht & Ship, Inc. (Petitioner) is a Florida corporation engaged in the business of retail sales of marine vessels. Also, Petitioner is a registered retail dealer in the State of Florida. The President of Petitioner is its only corporate officer. On or about September 2, 1993, Petitioner, in the capacity of a broker, sold a motor yacht at retail to Regency Group, Inc. (purchaser), through its representative, for $78,000. The motor yacht is described as a 1988, 41' Amerosport Chris Craft, hull Number CCHEU075E788, and called the "Motivator". At the closing of the sale, on or about September 2, 1993, the purchaser refused to pay the sales tax on the purchase, which was $4,680. However, the purchaser agreed to pay the sales tax after being informed by Petitioner that, without the payment of the sales tax, there could be no closing. The purchaser's representative submitted, at closing, a personal check in the amount of $4,680 for the sales tax. All of the necessary documents were completed for ownership and registration to be transferred to the purchaser. Subsequently, Petitioner received notice from its bank that the check for the sales tax had been dishonored by the purchaser's bank. The purchaser's representative had stopped payment on the check. In October 1993, Petitioner submitted its sales and use tax return for the month of September 1993 to Respondent in which the sale of the yacht was reported. Respondent automatically reviews sales and use tax returns. Respondent's review of Petitioner's return revealed a shortage of sales tax collected in the amount of $4,680.. In January 1994, Respondent issued a notice of tax action for assessment of additional tax in the amount of $4,710, plus interest and penalty, to Petitioner. The $4,710 included the loss of Petitioner's collection allowance of $30, which loss resulted from Petitioner's failure to timely remit all taxes due. Having received the notice of tax action, by letter dated January 20, 1994, Petitioner generally informed Respondent of the circumstances regarding the sales tax shortage, including the dishonored check. Petitioner pointed out, among other things, that Respondent had the authority and the means to collect the tax, while it (Petitioner) had limited means, and suggested, among other things, that Respondent cancel the purchaser's Florida registration of the yacht. On or about January 31, 1994, approximately three months after the check for sales tax was dishonored, Petitioner issued a notice of dishonored check to the purchaser, in which Petitioner requested payment of the sales tax. The notice provided, among other things, that Petitioner could seek criminal prosecution and civil action if the monies were not paid to Petitioner. Having not received the $4,680, Petitioner contacted the local law enforcement agency. After investigation, the law enforcement agency informed Petitioner that a civil action would have to be instituted because the purchaser, through its representative, had indicated that it was not satisfied with the yacht. Although Petitioner engaged the services of an attorney for civil action, no civil action was commenced. Additionally, Petitioner did not engage the services of a collection agency for assistance in collecting the sales tax. Subsequent to its notice of tax action, on or about March 12, 1994, Respondent issued a notice of assessment to Petitioner. The notice of assessment provided, among other things, that Petitioner was being assessed taxes in the amount of $4,710, plus penalty and interest in the amount of $2,342.61, totalling $7,052.61. Petitioner protested the assessment. On February 8, 1995, Respondent issued its notice of reconsideration in which Respondent determined, among other things, that the assessment was appropriate and affirmed the assessment of $7,052.61, plus interest and penalty. The interest accrues at the rate of $1.55 per day. Petitioner has not remitted any of the assessed tax, including interest and penalty, to Respondent. Petitioner has not identified on its federal tax return the noncollection of the sales tax from the purchaser as a bad debt. Sales tax is part of the total sale price for an item. Respondent considers the sales tax as collectable by a seller in the same manner as any other debt owed by a purchaser to a seller. A retail dealer, who is also a seller, is considered to be an agent for the State in the collection of sales tax. The burden of collecting the sales tax is placed upon the retail dealer by Respondent. Some of Respondent's employees have been sympathetic to Petitioner's tax assessment matter. However, none of the employees indicated to or advised Petitioner that Respondent was or is in error.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order affirming the assessment of sales tax against High-Tech Yacht & Ship, Inc. in the amount of $7,052.61, plus interest and penalty. DONE AND ENTERED this 7th day of August 1996, in Tallahassee, Leon County, Florida. ERROL H. POWELL, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August 1996.
The Issue The issue is whether Petitioner is liable for sales and use taxes, penalties, and interest and, if so, how much.
Findings Of Fact Petitioner operated a bar and grill in Punta Gorda that served beer, wine, liquor, and food at retail. In the course of business, Petitioner collected tax from the customers. Petitioner reported to Respondent sales tax collections for May 1996, November 1996, March 1997, November 1997, and December 1997. In connection with these collections, Petitioner remitted to Respondent seven checks representing the net tax due Respondent. These checks totaled $6700.64. The bank on which the checks were drawn dishonored them. The remittance of net sales tax proceeds by payment through checks that are later dishonored implies a fraudulent, willful intent to evade the payment of these sums. Respondent has issued five warrants concerning the unremitted taxes, penalties, and interest. Warrant 953620064 shows that Petitioner owes $1171 in sales tax remittances for the five months from July through November 1995. With penalties and interest, the total due on this warrant, through June 5, 1998, is $1832.37. Interest accrues after June 5 at the daily rate of $0.35. Warrant 467049 shows that Petitioner owes $2940.25 in sales tax remittances for the following months: April 1996, October 1996, December 1996, and January 1997. Petitioner purportedly paid each of these remittances with five (two in January) checks that were later dishonored. With penalties, including the 100 percent penalty for fraud, and interest, the total due on this warrant, through June 5, 1998, is $7480.12. Interest accrues after June 5 at the daily rate of $0.95. Warrant 971680037 shows that Petitioner owes $1301.85 in sales tax remittances for the following months: December 1995, June 1996, July 1996, September 1996, November 1996, and February 1997. With penalties and interest, the total due on this warrant, through June 5, 1998, is $2669.69. Interest accrues after June 5 at the daily rate of $0.43. Warrant 471481 shows that Petitioner owes $2912.48 in sales tax remittances for October and November 1997, for which Petitioner made remittances with two dishonored checks. With penalties, including the 100 percent penalty, and interest, the total due on this warrant, through June 5, 1998, is $6751.49. Interest accrues after June 5 at the daily rate of $0.95. Warrant 989840034 shows that Petitioner owes $8077.76 in sales tax remittances for the following months: August 1997, September 1997, December 1997, January 1998, and February 1998. With interest, the total due on this warrant, through June 5, 1998, is $8285.21. Interest accrues after June 5 at the daily rate of $2.65. Totaling the five warrants, Petitioner owes a total of $27,018.88 in taxes, penalties, and interest through June 5, 1998, and $5.33 per day for each ensuing day until the amount is paid.
Recommendation It is RECOMMENDED that the Department of Revenue enter a final order determining that Petitioner owes $27,018.88 in taxes, penalties, and interest through June 5, 1998, and $5.33 per day for each ensuing day until the amount is paid. DONE AND ENTERED this 10th day of July, 1998, 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 Filed with the Clerk of the Division of Administrative Hearings this 10th day of July, 1998. COPIES FURNISHED: John N. Upchurch Nicholas Bykowsky Assistant Attorneys General Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 Judith Crown, President Tombstone, Inc. Suite P-50 1200 West Retta Esplanade Punta Gorda, Florida 33950 Linda Lettera, General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Larry Fuchs, Executive Director Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
Findings Of Fact At all times pertinent to this cause, Robert W. Pope, has been the holder of license no. 62-600, series 4-COP, SRX, held with the State of Florida, Division of Beverage to trade as The Wedgewood Inn, located at 1701, 4th Street, South, St. Petersburg, Pinellas County, Florida. When the Respondent, Pope, began to operate the licensed premises he was given a registration sales tax number by the State of Florida, Department of Revenue. This number was provided in accordance with 212, F.S. That law required the remittance of the collected sales tax on a month to month basis, the period beginning with the first day of the month and ending with the last day of the month. The remittance was due on the first day of the following month and payable by the 20th day of the following month. Failure to pay by the 20th would result in a 5 percent penalty and 1 percent interest per month. The sales tax remittance due from the licensed premises for September, 1976 through December, 1976 was not made and a lien was recorded to aid collection of the tax. Payment of the amount of $4,500.00 was paid in February or March, 1977 to satisfy the Department of Revenue lien claims. At present all taxes due and owing under 212, F.S. are current. The above facts established that the Respondent failed to comply with the provisions of 212, F.S. pertaining to the remittance of sales tax from the Respondent to the State of Florida, Department of Revenue. This violation, thereby subjects the Respondent to the possible penalties of 561.29, F.S.
Recommendation It is recommended that the Respondent, Robert W. Pope, be required to pay a civil penalty in the amount of $500.00 or have the license no. 62-600, series 4- COP, SRX, suspended for a period of 20 days. DONE AND ENTERED this 28th day of July, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William Hatch, Esquire Division of Beverage 725 South Bronough Street Tallahassee, Florida 32304 Robert W. Pope, Esquire 611 First Avenue, North St. Petersburg, Florida 33701
The Issue Whether Petitioners are liable for sales and use tax, penalty, and interest as assessed by the Department of Revenue (the Department)?
Findings Of Fact Salma is a Florida corporation with its principal place of business at 2231 Del Prado Boulevard, Cape Coral, Florida, 33990. Gausia is a Florida corporation with its principal place of business at 11571 Gladiolus Drive, Fort Myers, Florida, 33908. Petitioners are in the business of operating gas stations with convenience stores. The Department is an agency of the State of Florida and is authorized to administer the tax laws of the State of Florida. Petitioners were selected for audit because their reported gross sales were less than the total cost of items purchased (inventory) for the audit period. The Department issued Salma and Gausia each a Notice of Intent to Conduct a Limited Scope Audit or Self-Audit, dated April 26, 2013, for sales and use tax, for the period February 1, 2010, through January 31, 2013 (collectively referred to as the Notices). The Notices requested that Petitioners provide the Department: (a) a list of all their vendors for alcohol, tobacco, soda, chips, candy, etc.; (b) their total purchases of alcohol and tobacco, by vendor, for the period July 2010 to June 2011; (c) copies of their federal tax returns for the examination period; (d) purchase receipts for all purchases for the last complete calendar month; and (e) daily register (Z tapes) for the last complete calendar month. The Notices gave Petitioners 60 days to gather the requested documents before the audit was to commence. The Notices also requested that Petitioners complete an attached Questionnaire and Self Analysis Worksheet. In response to the Notices, Petitioners requested a 30- day extension of time until July 18, 2013, to provide the requested documents and to designate a Power of Attorney. Petitioners did not provide the Department any books and records for inspection, nor did they complete and return the questionnaire and self analysis worksheets. As a result, the Department's auditor determined the sales tax due based upon the best information available. To calculate an estimated assessment of sales tax, the Department used the purchase data of Petitioners' wholesalers and distributors of alcoholic beverages and tobacco, for July 1, 2010, through June 30, 2011; the 2010 National Association of Convenience Stores average markups and in-store sales percentages of alcoholic beverage and tobacco products; and historical audit data. After reviewing the purchase data for July 1, 2010, through June 30, 2011, and for July 1, 2011, through June 30, 2012, the Department's auditor determined that the data was missing a few vendors. As a result, the Department's auditor estimated the amount of Petitioners' cigarette purchases, based on historical audit data that shows that cigarette sales are generally 4.31 times more than beer sales. The Department's auditor and audit supervisor testified that the estimated gross sales seemed reasonable and consistent with the national averages and the purchase data for July 1, 2011, through June 30, 2012. The Department estimated gross sales (i.e., the retail sale value of the goods sold) by marking up the taxable sales and exempt sales reported on the sales and use tax returns submitted to the Department by Petitioners. For example, for July 1, 2010, through June 30, 2011, Salma purchased beer from its wholesalers and distributors for $148,826.15, and the Department marked up the purchase price by 27 percent for a retail value of $189,009.21. For July 1, 2010, through June 30, 2011, Gausia purchased beer from its wholesalers and distributors for $132,138.65, and the Department marked up the purchase price by 27 percent for a retail value of $167,816.09. The Department's markup on the alcoholic beverage and tobacco products is reasonable because the Department's auditor testified that he used a combination of 2010 National Association of Convenience Stores average markups and the competitive pricing and information from audits of other convenience stores. The Department determined that the exemption ratio reported on the sales and use tax returns submitted to the Department by Petitioners was extremely high for their industry. The Department used an exemption ratio of 15 percent, based on historical audit data for the industry, to calculate Petitioners' estimated taxable sales. A review of Petitioners' sales and use tax returns revealed that they did not apply the tax bracket system to their taxable sales transactions, as required under sections 212.12(9) and (10), Florida Statutes. Instead, Petitioners remitted sales tax on their taxable sales based on their gross receipts at a flat tax rate. The Department's auditor testified that this method of reporting tax is inappropriate and does not accurately reflect the sales activity of the business. The Department calculated the average effective tax rate of 6.0856 percent, based on historical audit data for the industry. To calculate the estimated tax due, the Department multiplied the effective tax rate by the estimated taxable sales and gave Petitioners credit for any tax remitted with their tax returns. The Department issued Salma a Notice of Intent to Make Audit Changes, dated August 8, 2013, for audit number 200149872. The Department issued Gausia a Notice of Intent to Make Audit Changes, dated August 8, 2013, for audit number 200149749. The Department assessed Petitioners sales tax on their sales of alcoholic beverages and tobacco. The Notice of Intent to Make Audit Changes gave Petitioners 30 days to request a conference with the auditor or audit supervisor, to dispute the proposed changes. Petitioners did not make such a request. The Department issued a Notice of Proposed Assessment (NOPA) to Salma on March 6, 2014, for tax in the sum of $159,282.26; for penalty in the sum of $39,820.57; and interest as of March 6, 2013, in the sum of $27,772.36. The Department issued a NOPA to Gausia on March 6, 2014, for tax in the sum of $213,754.46; for penalty in the sum of $53,438.62; and interest as of March 6, 2013, in the sum of $36,921.79. Additional interest accrues at $30.55 per day until the tax is paid. The NOPAs became final assessments on May 5, 2014. After filing a request for an administrative hearing, Petitioners completed the Questionnaire and Self Analysis Worksheet and produced the following documents to the Department: (a) a list of all of their vendors for alcohol, tobacco, soda, chips, candy, etc.; (b) a list of vendors for alcohol and tobacco, for the examination period of July 2010 to June 2011; (c) a summary of their taxable sales, for the period February 2010 through December 2012; (d) copies of their federal tax returns, for the tax years 2010 through 2013; (e) copies of its purchase receipts for the months of July 2013; and (f) copies of their daily register (Z-tapes) for the month of July 2013. The Department's auditor testified that aside from being untimely, the records and information provided by Petitioners during these proceedings were not reliable because Petitioners did not provide any source documents that would allow the Department to reconcile the reported figures and confirm the supplied information. In addition, the purchase receipts and Z- tapes were not relevant because they were from outside of the audit period. The Z-tapes are also unreliable because the manager of the convenience store testified at the final hearing that employees purposely and routinely entered taxable sales into the cash registers as tax exempt sales. Petitioners argue that the Department did not use the best information available when estimating the taxes due. Petitioners claim that because their businesses are combination gas station/convenience stores, the national data for standalone convenience stores is inapplicable. However, notably absent from Petitioners' testimony or evidence was any alternative data upon which the Department could have relied for more accurate estimates.2/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying Petitioners' requests for relief and assessing, in full, the Department's assessments of sales tax, penalty, and interest against both Salma and Gausia. DONE AND ENTERED this 9th day of January, 2015, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 9th day of January, 2015.
The Issue What, if any, is Petitioner's tax liability to the State of Florida, after any legitimate tax credits are applied, for June 1998 through December 1998?
Findings Of Fact During the period of June 1998 through September 1998, Petitioner Ron Ross Meardy operated a used car lot from a location in Duval County, Florida, to wit: 1400 Mayport Road, Atlantic Beach, Florida, 32233-3440. Mr. Meardy conducted business through a sole proprietorship named Auto Liquidation Center (ALC). Mr. Meardy's business included both retail sales and wholesale sales of motor vehicles. Between June 1998 and December 1998, Mr. Meardy was a registered dealer with DOR. Mr. Meardy's sales tax registration number was 26-02-151942-23/4, which registration number pertains to the Mayport location in Duval County, Florida. Mr. Meardy filed State of Florida Sales and Use Tax returns, standard form DR-15, for each month between December 1997 through May 1998. In so doing, he relied entirely on his employees. Mr. Meardy also filed State of Florida Solid Waste returns, standard form DR-15SW, for each month between December 1997 through May 1998. In so doing, he relied entirely on his employees. In September 1998, Mr. Meardy opened a car lot in St. Augustine, St. John's County, Florida and closed the Duval County car lot. Mr. Meardy filed no DR-15 (sales tax) forms for the period of June 1998 through December 1998. Mr. Meardy filed no DR-15SW (waste tax) forms for the period of June 1998 through December 1998. Mr. Meardy asserted that he did not know that his employees had made a lot of bad loans or failed to file tax returns for June 1998 through September 1998. Mr. Meardy admitted that from September to December 1998, he deliberately filed no tax returns. First, he claimed he did not file returns because there were no taxable sales made in that period. Then, he asserted that he did not file because, in an unrelated matter, the Florida Attorney General's Office, investigating several businesses "run" by him, held necessary business documents from October 27, 1998 until December 11, 1998 (+/- 45 days). Mr. Meardy's credible testimony that he did not have his business records from October 27, 1998 to December 1998 was unrefuted. As a result of Mr. Meardy's not having filed any DR-15 and DR-15SW forms for the period of June 1998 through December 1998, DOR filed a sales and solid waste tax warrant against him dated March 30, 1999, for $11,937.86. As permitted by law, this audit/warrant merely estimated Mr. Meardy's liability. Mr. Meardy did not then file formal tax returns, file a formal request for an alleged credit (DR-95 form), or provide DOR access to his business records so that DOR could make an accurate assessment/audit/warrant for any tax, penalty, interest, and/or credit. Instead, he timely-filed a Petition for Administrative Hearing on May 28, 1999. The Petition for Administrative Hearing, dated May 21 and filed May 28, 1999, was the first written expression by which Petitioner alerted DOR that he was seeking a tax credit due to repossessions he claimed to have made on defaulted loans. The Petition only stated that DOR "owes ALC money due to repossession credits." The Petition does not contain all of the information required by rule or by the standard credit claim form DR-95B. Petitioner had, in the past, applied for credit for tax paid on repossessed items by attaching the DR-95B form to his monthly tax returns (P-3). He maintained he had relied on his employees for this function. Petitioner's credible testimony that the Attorney General again held some of his documents from the end of May 1999, until September 30, 1999 (+/-five months), due to an unrelated matter, was unrefuted. However, at no time did Petitioner ever file a formal request for credit (form DR-95B) or any tax returns for the period at issue in this proceeding. Only during the course of discovery in the instant proceeding, which discovery Petitioner resisted by every legal means, did it become clear that Petitioner was claiming a tax credit from his May 1998 sales tax return, and that the credit he sought was in excess of the tax he had paid by way of his May 1998 tax return. Only during the discovery process herein did Petitioner provide DOR with any information concerning repossession and default amounts that he was claiming. He did this by producing a "database" (DOR-4). It is unclear from the evidence at hearing when this information was provided, but the date Petitioner claims in his Proposed Findings of Fact to have first produced DOR-4 is February 10, 2000. Petitioner also claims to have given someone at DOR a computer disc with his supporting information, but no DOR witness confirmed this. Petitioner produced no such disc at hearing. Exhibit DOR-4 did not provide the vehicle registration number as part of the property description, the date the sales and use tax was paid, the purchase price less trade-in, the purchase price less cash down, or the actual date of repossession. A copy of each invoice supporting each repossession was not attached. Petitioner did not submit any tax return with DOR-4. Petitioner admits that DOR-4 does not contain all of the information required by the tax credit claim form, DR-95B. DOR revised its assessment once, based on the information Petitioner was required to produce in this proceeding. DOR revised its assessment a second time as a result of the information Mr. Meardy provided in the course of his deposition taken January 19, 2001, approximately a week-and- a-half before final hearing. As agreed-to within the Joint Pre-hearing Stipulation, the revised assessment figure in this case is now limited to $2626.31 sales tax, $1313.40 penalty, and $75.35 interest, for a total of $4735.56, as of January 31, 2001. If the foregoing base amounts are, in fact, owed, penalties and interest continue to accrue, pursuant to statute. In making the final audit/assessment/warrant, DOR's Auditor IV, Thelmesia Whitfield, used original materials supplied by Petitioner. From these, she took the actual amounts Petitioner had listed on his dated invoices and other original records as the tax he collected for June 1998 through December 1998. She then calculated the sales tax due, but not remitted, for that period. In so doing, she determined that no additional taxes were due for the months of August 1998 through December 1998. She also concluded that for Petitioner's sales in June and July 1998, a penalty should be assessed at the legal rate of 10% per month on a cumulative basis up to 50% and interest should be assessed at the legal rate of 12% per year or 1% per month on the cumulative balance that is due. Petitioner's solid waste fee liability was calculated by Ms. Whitfield on the basis of the dated sales invoices provided by Petitioner where he had charged fees for tire and battery disposal. Ms. Whitfield's calculations did not include transactions without invoices or other original records. She noted that on several transactions Petitioner had collected more solid waste tax than was required, and she concluded that once collected, those amounts should be remitted to DOR unless they had been refunded to the customer. She calculated local option taxes at the applicable rate for Duval County. Ms. Whitfield's re-calculations do not reflect credits for the repossessions shown on DOR-4, because no state tax returns were filed from June through December 1998, because all the necessary information had not been provided, and because she believed the information on DOR-4 had been provided beyond the period available to claim repossession credits, which is 13 months after the repossession takes place. Ms. Whitfield's re-calculations also do not include credits for worthless accounts orally claimed by Petitioner in the course of his January 19, 2001, deposition or which he urges that she extrapolate from DOR-4, because Petitioner did not also provide either federal tax returns or equivalent financial statements as required by law. Because Petitioner was asking for a refund of more than he said he had paid, and because the sales he was referencing took place before the period being audited, Ms. Whitfield had no way to verify that the amount of sales tax actually had been paid. Therefore, Ms. Whitfield only used DOR-4 where there was a question as to whether a sale had taken place at all. Although DOR-4 is merely a summary, because it was produced by Petitioner and listed sales dates, she used it only as his admission that certain questionable sales had, in fact, taken place. Accordingly, it is found that DOR has not relied on estimations based on prior sales outside the time frame audited, but has made its final assessment (DOR Composite Exhibit 3) upon reasonable documentation provided by Petitioner, which documentation he represented as being accurate to the best of his ability. It is further found that DOR applied defineable legal standards. Petitioner essentially challenges DOR's last assessment/audit/warrant because Ms. Whitfield did not use DOR-4 to assign him a credit or off-set. He seeks to have the undersigned relate, according to his theory of repossession/default credits, DOR's final assessment reflected in DOR's audit report and work papers (DOR Composite Exhibit 3); DOR-4, Petitioner's "database"; and Petitioner's Exhibits 1-3 so as to determine Petitioner's sales tax and solid waste liability for the June 1998 through December 1998 period, and to thereby assign him a credit against his May 1998 tax return and payment (P-3). Petitioner's theory is based on his representation that his database (DOR-4) uses the first time he received money from each sale of a vehicle as the date of the sale/transaction, even though his own invoices and other original supporting data which he provided to DOR, showed different dates as the date of each sale. Then, he asserts that where vehicles have been repossessed, or where a sale has not "gone through," or where a loan has been defaulted (presumably even without repossession, of the car, although this is unclear), a credit should be related back to his May 1998, tax return (P-3). His argument and evidence are not persuasive for the following reasons. At the outset, it is noted that Petitioner's credit claim in excess of $12,000, is more than the tax Petitioner paid in May 1998, as reflected on Exhibit P-3. Likewise, although Petitioner's invoice used in Ms. Whitfield's calculations recorded a sale on June 22, 1998, to Lori Armstrong at $1500.00, Petitioner, without any supporting evidence, asserted at hearing that this sale actually was made on June 23, 1998, and that someone stole $500.00 of the tendered price, so he should pay tax, if at all, on a sale of only $1,000. He had a similar unsupported reason for attempting to reduce, by $100.00, the sales price on another invoice amount for Randy Davis, which invoice Ms. Whitfield had utilized. Petitioner also claimed, at hearing, again with no supporting evidence, that invoices he had previously produced and which were relied upon by Ms. Whitfield for customers Crumley, Mosley, and Lebourgeois "did not go through," and therefore he should not be liable for sales tax on these invoices. He asserted that since DOR could not find any title at the Department of Highway Safety and Motor Vehicles (DHSMV) for these customers, the inference must be drawn that those sales never closed and therefore no sales tax on them is owed by him. Petitioner also claimed at hearing that the Lebourgeois sale had resulted in a repossession. At hearing, Petitioner admitted liability for a $1,000 sale to a customer Millwater, but claimed that a credit from May 1998 would cover it, without any clear explanation of how this should occur. Petitioner maintained at hearing, again only because no title in that name had been located at the DHSMV, that an invoice of September 14, 1998, to a customer Wilkerson for $200 meant that the sale to Wilkerson was an out-of-state sale, and therefore no tax was owed. In his Proposed Findings of Fact, Petitioner does not address theft as an alleged reason he did not collect the full amounts shown on his invoices (see Finding of Fact 35), but he does seek a tax credit for all sales where no title was found at DHSMV and discusses at least the Crumley, Mosley, and Lebourgeois transactions as a source of these alleged "credits," sometimes for months in which he did not file any tax return. He also addressed customers Varner, Bailey, Little, Wright, Emanual, Lanier, Maynard, Porter, Williams, Arenas, Bays, Beasley, Butt, Carvey, Catlin, Chapman, Clendenin, Cunningham, Forbes, Catina Friend, Gonzalez, Knight, Lloyd, Owens, Strickland, Daniels, Johnson, and McDade, whose names and information (except for Bailey) appear on DOR-4, Petitioner's database, as repossessions or defaulted loans. Bailey appears on DOR-4 but in a different portion of DOR-4. (See Finding of Fact 47). The two biggest problems with Petitioner's theory are that he submitted no evidence to affirmatively demonstrate that any vehicle was repossessed, and Exhibit P-3 does not allow the undersigned any way of determining which vehicle sales were included in the May 1998 tax paid. Exhibit P-3 does provide information as to the repossessions claimed in May 1998 for previous months' sales, but it does not itemize or identify May 1998 sales upon which the tax was being paid in that month. Simply testifying that a repossession or default occurred and that someone entered that information into Petitioner's database (DOR-4) is not competent and credible proof that repossession occurred. In light of Petitioner's testimony that he relied on unreliable and dishonest employees to handle both his sales and tax matters at the Duval County office and without any explanation or documentation of how repossessions or loan defaults were handled from either of his business locations, the undersigned is left with the sense that Petitioner had neither hands-on experience with the listed repossessions nor with the subsequent entries of repossessions and/or loan defaults into his database. Although Petitioner has made a logical argument for "starting at ground zero" with regard to his May 1998 tax return, without more than is in evidence here, vehicles allegedly sold prior to June 1998 cannot be related to vehicles allegedly repossessed after June 1998 by way of the May 1998 tax return (P-3). (See Findings of Fact 21 and 41.) The absence of a title of registration in a given individual's name, without more, is not sufficient to infer that a sale was not consummated or that there had been an out-of- state sale. If the buyer had the duty to transfer title, failure of title proves nothing. If the dealer had the duty to transfer title, Petitioner's failure to transfer title does not automatically translate into a tax credit. The minimal documentation underlying DOR-4 which Petitioner offered (Exhibits P-1 and P-2), also is not persuasive of Petitioner's theory of the case, including but not limited to his suggestion that DOR is required to regard the sale date as being a date when money allegedly was first received, instead of the dates of sale on his invoices or other underlying documentation. It seems undisputed that "Ralston Varner" and "Varner Dean" are the same customer, full name "Ralston Dean Varner." Petitioner's Exhibit 1 is a receipt showing a payment by Ralston Varner for an "'88 Chevy Caviler" [sic] and is dated May 1, 1998, which is the date Petitioner claims to be the completion of sale date. By Petitioner's theory, sales tax on this purchase should have been included in his May 1998 tax return, entitling him to receive a tax credit upon repossession of this or some other vehicle. This cannot be determined from the tax return (P-3). Exhibit DOR-6 is a composite exhibit concerning a sale to Ralson Varner. Those pages preceding the page titled "Certification," dated July 19, 1998, were produced by Mr. Meardy at his office. The materials following the certification constitute a DHSMV "body jacket." The first page of DOR-6 reveals "6-10-98," as the date of the used car order, but pertains to a "1989 Ford T-Bird." The twelfth page, the "Installment Sale Contract-Motor Vehicle," is dated June 10, 1998, and also relates to a 1989 Ford "T-Bird." DOR's final audit refers to a 1989 Ford Thunderbird sold to "Varner Dean," not an '88 Chevy Cavalier, as urged by Petitioner. Petitioner's Exhibit 2 shows two receipts from Dennis Bailey, one on May 26, 1998 and one on June 2, 1998. Petitioner maintained that the sale in question went through on May 26, 1998, the sales tax was remitted on his May 1998 tax return, and the car was later repossessed. The May 1998 tax return (P-3) does not help decipher this. A Dennis Bailey appears on DOR-4 as of May 26, 1998, in relation to a Ford Taurus, but it is not one of the transactions Petitioner has singled out by the hand- written notations on DOR-4 as being defaulted or repossessed. Exhibit DOR-5 is a composite exhibit concerning the sale to Dennis Bailey which Ms. Whitfield audited. Those pages preceding the page titled "Certification," dated July 19, 1999, were produced by Petitioner. The materials following the certification constitute a DHSMV "body jacket." Exhibit DOR-5, page one, shows "June 2, 1998," as the date of the used car order. DOR-5, page 10, the fourth page following the certification, reveals the date of sale as "6-2-98," as reported to the DHSMV, both related to a 1988 Taurus. Under these circumstances, Petitioner's view of this sale cannot prevail. Also, Petitioner admitted that even by his theory and calculations, his May 1998 tax return was "off" by $1,007, and he had been unable to discover the reason (TR-103). Moreover, the evidence does not clearly establish that DOR-4 was presented to DOR within either 12 or 13 months of all the repossessions in question. (See Findings of Fact 19 and 21- 22.) Lastly, Petitioner did not present any evidence of refunds to customers of solid waste tax overpayments.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Revenue enter a Final Order finding Petitioner is liable for the amounts as set out in Finding of Fact 24, without any credits or set-offs, and providing for accruing interest and penalties, pursuant to law. DONE AND ENTERED this 4th day of May, 2001, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 May, 2001. COPIES FURNISHED: Ron Ross Meardy Post Office Box 1853 St. Augustine, Florida 32085 Charles Catanzaro, Esquire 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 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
