99-002609 Division Of Alcoholic Beverages And Tobacco vs. Depaul, Inc., D/B/A Copper Penny Pub
 Status: Closed
Recommended Order on Tuesday, October 26, 1999.


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Summary: Lack of package sale records requires payment of a surcharge.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8DEPARTMENT OF BUSINESS AND )

13PROFESSIONAL REGULATION, )

16DIVISION OF ALCOHOLIC BEVERAGES )

21AND TOBACCO, )

24)

25Petitioner, )

27) Case No. 99-2609

31vs. )

33)

34DEPAUL, INC., d/b/a COPPER PENNY )

40PUB, )

42)

43Respondent. )

45_____________________________________)

46RECOMMENDED ORDER

48On September 23, 1999, a formal administrative hearing in

57this case was held in Tampa, Florida, before William F.

67Quattlebaum, Administrative Law Judge, Division of Administrative

74Hearings.

75APPEARANCES

76For Petitioner: Miriam S. Wilkinson, Esquire

82Department of Business

85and Professional Regulation

881940 North Monroe Street

92Tallahassee, Florida 32399-0792

95For Respondent: No appearance

99STATEMENT OF THE ISSUE

103The issue in the case is whether the allegations set forth

114in the Department's Administrative Action dated January 21, 1999,

123are correct.

125PRELIMINARY STATEMENT

127By Administrative Action dated January 21, 1999, the

135Department of Business and Professional Responsibility, Division

142of Alcoholic Beverages and Tobacco, notified the Respondent,

150DePaul, Inc., d/b/a Copper Penny Pub, of tax liability of

160$70,756.19, including penalty and interest for the period

169October 1, 1996 through September 30, 1998. The Respondent

178requested a formal administrative hearing to challenge the

186alleged liability. The request was forwarded to the Division of

196Administrative Hearings, which scheduled and conducted the

203proceeding.

204At the hearing, the Petitioner presented the testimony of

213two witnesses and had Exhibits numbered 1-4 admitted into

222evidence. The Respondent did not appear at the hearing. No

232transcript of the hearing was filed. The Petitioner filed a

242Proposed Recommended Order.

245FINDINGS OF FACT

2481. At all times material to this case, Respondent DePaul,

258Inc. operated the Copper Penny Pub, 10553 Spring Hill Drive,

268Spring Hill, Florida (the "licensed premises"). The Respondent

277held license number 37-00584, Series COP4.

2832. In or before September 1998, the Petitioner selected the

293Respondent for audit based on the Respondent's failure to file

303required monthly sales reports.

3073. By letter dated September 2, 1998, the Petitioner

316notified the Respondent of the audit. According to the letter,

326the audit would occur on September 24, 1998, at the licensed

337premises. The letter stated that the following items would be

347reviewed:

3481. All alcoholic beverage purchase invoices.

3542. Petty cash records.

3583. Business checkbooks or check stubs.

3644. Records of alcoholic beverages used in

371cooking (if any).

3745. Any worksheets you might use to prepare

382the report.

3846. The enclosed Pre-Audit Questionnaire

389completely filled out.

3924. The Pre-Audit Questionnaire allows a licensee to

400identify package sales. Package sales are those in which

409alcoholic beverages are sold in the original sealed containers

418for consumption off the licensed premises. A COP4 series

427licensee can sell packaged alcoholic beverages for consumption

435off premises.

4375. Package alcohol sales are deducted from total sales

446during the audit, and are not included in the surcharge tax

457liability. The Pre-Audit Questionnaire directs the licensee to

465identify documents that will be used to support the package sales

476deduction.

4776. The Respondent did not complete or submit the Pre-Audit

487Questionnaire.

4887. A licensee must establish entitlement to a package sales

498deduction. Generally a licensee is required to maintain a log of

509package purchases, and support the logged transactions with daily

518cash register tapes, identified as "Z" tapes.

5258. The Respondent produced no package sales records to the

535Petitioner during the audit. Even though the Respondent did not

545provide records supporting a package sales deduction, the auditor

554allowed a two-percent credit for package sales.

5619. There are two audit methodologies used in conducting the

571tax audit, the "sales" method, and the "purchase" method. The

581choice of audit methodology is left to the licensee.

59010. The Respondent selected the purchase method audit. In

599a purchase method audit, the licensee is required to pay

609surcharge taxes based on the gallons of alcoholic beverages

618purchased monthly.

62011. Division Tax Auditor Maggie Herrera conducted the

628audit.

62912. According to Ms. Herrera, the licensed premises is a

639bar located in a strip shopping center. The "package store" is

650located outside and about thirty feet away from the bar. The

"661package store" is about the size of a one-car garage.

67113. In order to make a package sale, the bartender must

682leave the bar, walk to the package store, unlock it, retrieve the

694packaged goods, re-lock the door, and return to the bar.

70414. According to Ms. Herrera, the package store contained

713one-liter bottles of liquor on shelves with prices marked with

723masking tape on the bottles. The store also contained two cases

734of "hip flask" 375-ml size bottles, one case of 50-ml bottles, "a

746lot" of brandy and dust-covered bottles of mixers.

75415. During the several hours Ms. Herrera's was present at

764the licensed premises, only one package sale (a flask size

774bottle) was made.

77716. Ms. Herrera traveled to the licensed premises on two

787occasions to meet the Respondent.

79217. On the date of the first scheduled meeting, the

802Respondent did not appear.

80618. On the date of the second scheduled meeting, the

816Respondent presented approximately thirty distributor invoices to

823Ms. Herrera and told her he was leaving for his home to retrieve

836the remainder of the records. He left the licensed premises.

846She waited for several hours. The Respondent did not return and

857did not contact Ms. Herrera to explain his failure to return.

86819. Ms. Herrera preformed an audit of the Respondent, using

878standard audit procedures. Ms. Herrera utilized monthly

885surcharge reports filed by the Respondent for the period between

895January 1995 and December 1997, the distributor sales records for

905the Respondent's purchases, and records of tax payments made by

915the Respondent.

91720. According the audit, the Respondent owes remaining tax

926surcharge payments of $47,695.85, a penalty of $17,545.74 and

937interest of $5,514.60, for a total liability of $70,756.19.

94821. There is no evidence that the audit was done

958inappropriately, or that the audited tax liability is incorrect.

96722. The Respondent was notified of the tax liability by

977certified letter.

979CONCLUSIONS OF LAW

98223. The Division of Administrative Hearings has

989jurisdiction over the parties to and subject matter of this

999proceeding. Section 120.57(1), Florida Statutes.

100424. The Department of Business and Professional

1011Responsibility, Division of Alcoholic Beverages and Tobacco, is

1019responsible for collection of alcoholic beverage surcharge taxes.

1027The failure to accurately and timely remit surcharge taxes is a

1038violation of beverage law. Section 561.501, Florida Statutes;

1046Rule 61A-4.063, Florida Administrative Code.

105125. The burden is on the licensee to establish actual sales

1062records and entitlement to package sales deductions. Rule 61A-

10714.063(4)(c), Florida Administrative Code.

107526. In this case, the licensee has failed to produce actual

1086sales records or entitlement to package sales deductions.

109427. The uncontroverted evidence establishes that the

1101Petitioner's audit methodology and resulting tax surcharge

1108liability are reasonable.

1111RECOMMENDATION

1112Based on the foregoing Findings of Fact and Conclusions of

1122Law, it is recommended that the Department of Business and

1132Professional Responsibility, Division of Alcoholic Beverages and

1139Tobacco, enter a final order imposing a total liability of

1149$70,756.19, including unpaid tax liability, penalties, and

1157interest.

1158DONE AND ENTERED this 26th day of October, 1999, in

1168Tallahassee, Leon County, Florida.

1172___________________________________

1173WILLIAM F. QUATTLEBAUM

1176Administrative Law Judge

1179Division of Administrative Hearings

1183The DeSoto Building

11861230 Apalachee Parkway

1189Tallahassee, Florida 32399-3060

1192(850) 488-9675 SUNCOM 278-9675

1196Fax Filing (850) 921-6847

1200www.doah.state.fl.us

1201Filed with the Clerk of the

1207Division of Administra tive Hearings

1212this 26th day of October, 1999.

1218COPIES FURNISHED:

1220Miriam S. Wilkinson, Esquire

1224Department of Business

1227and Professional Regulation

12301940 North Monroe Street

1234Tallahassee, Florida 32399-0792

1237William T. Charnock, President

124110154 Dunkirk Road

1244Spring Hill, Florida 34608

1248Joseph Martelli, Director

1251Division of Alcoholic Beverages

1255and Tobacco

1257Department of Business and

1261Professional Regulation

12631940 North Monroe Street

1267Tallahassee, Florida 32399-0792

1270Barbara D. Auger, General Counsel

1275Department of Business and

1279Professional Regulation

12811940 North Monroe Street

1285Tallahassee, Florida 32399-0792

1288NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

1294All parties have the right to submit written exceptions within 15

1305days from the date of this Recommended Order. Any exceptions to

1316this Recommended Order must be filed with the agency that will

1327issue the Final Order in this case.

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PDF
Date
Proceedings
PDF:
Date: 07/15/2004
Proceedings: Dismissal without Prejudice filed.
PDF:
Date: 10/26/1999
Proceedings: Recommended Order
PDF:
Date: 10/26/1999
Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 9/23/99.
Date: 10/07/1999
Proceedings: Petitioner`s Proposed Recommended Order filed.
Date: 09/23/1999
Proceedings: CASE STATUS: Hearing Held.
Date: 08/20/1999
Proceedings: Notice of Serving Petitioner`s First Set of Request for Admissions, Request for Production of Documents and Request for Interrogatories to Respondent; Petitioner`s First Request for Admissions (filed via facsimile).
Date: 08/13/1999
Proceedings: Order Granting Continuance and Re-scheduling Hearing sent out. (hearing set for September 23, 1999; 9:00 a.m.; Tampa, FL)
Date: 08/11/1999
Proceedings: (Petitioner) Motion for Continuance filed.
Date: 07/19/1999
Proceedings: Notice of Hearing sent out. (hearing set for 9:00am; Tampa; 8/18/99)
Date: 07/15/1999
Proceedings: Joint Response to Initial Order (filed via facsimile).
Date: 07/06/1999
Proceedings: Initial Order issued.
Date: 06/30/1999
Proceedings: Agency Referral Letter; Request for Hearing; Administrative Action; Administrative Action; Stipulation filed.

Case Information

Judge:
WILLIAM F. QUATTLEBAUM
Date Filed:
06/30/1999
Date Assignment:
09/15/1999
Last Docket Entry:
07/15/2004
Location:
Tampa, Florida
District:
Middle
Agency:
Department of Business and Professional Regulation
 

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