97-002996
Leonard F. Nichols vs.
Department Of Revenue
Status: Closed
Recommended Order on Thursday, December 18, 1997.
Recommended Order on Thursday, December 18, 1997.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8LEONARD F. NICHOLS )
12)
13Petitioner, )
15)
16vs. ) Case No. 97-2996
21)
22STATE OF FLORIDA, )
26DEPARTMENT OF REVENUE )
30)
31Respondent. )
33__________________________________)
34RECOMMENDED ORDER
36Pursuant to notice, a formal hearing was held by video
46teleconference in this case on October 31, 1997, at West Palm
57Beach, Florida, before Susan B. Kirkland, a duly designated
66Administrative Law Judge of the Division of Administrative
74Hearings.
75APPEARANCES
76For Petitioner: Leonard F. Nichols, pro se
831800 Southeast Street Lucie Boulevard
88Building 4-305
90Stuart, Florida 34996
93For Respondent: Eric J. Taylor
98Assistant Attorney General
101Department of Legal Affairs
105The Capitol, Tax Section
109Tallahassee, Florida 32399-1050
112STATEMENT OF THE ISSUES
116Whether Petitioner is entitled to a refund of use taxes paid
127to the State of Florida on October 11, 1995, relating to the
139purchase in another state of an automobile.
146PRELIMINARY STATEMENT
148By letter dated April 28, 1997, Respondent, Department of
157Revenue (Department), issued to Petitioner, Leonard F. Nichols
165(Nichols), a Notice of Reconsideration of Refund Denial, denying
174Nichols' request for a refund of use taxes paid to the Department
186relating to Nichols purchase of a 1995 Buick Century in New
197Jersey. By letter dated June 25, 1997, Nichols requested an
207administrative hearing.
209On July 2, 1997, the case was forwarded to the Division of
221Administrative Hearings for assignment to an administrative law
229judge.
230At the final hearing, the parties agreed to the facts
240contained in Section III E. of Respondent's Prehearing Statement
249with the exception of the following sentence: "No sales taxes
259were imposed on or paid by the Petitioner at the time of purchase
272of the Buick in Newton, New Jersey." Nichols testified in his
283own behalf at the final hearing and introduced Petitioner's
292Exhibits 1-4 in evidence. Respondent did not present any
301witnesses and introduced Respondent's Exhibits 1-13 in evidence.
309The parties agreed to file proposed recommended orders
317within ten days of the filing of the transcript. The transcript
328was filed on November 17, 1997. The parties timely filed their
339proposed recommended orders, and they have been duly considered.
348FINDINGS OF FACT
3511. Petitioner, Leonard F. Nichols (Nichols), maintains a
359residence in Florida at 1800 Southeast St. Lucie Boulevard,
368Building 4-305, Stuart, Florida 34996. Nichols is legally
376domiciled in Florida. He also maintains a residence in New
386Jersey at 3 Wood Run, Newton, New Jersey 07860.
3952. Prior to October, 1995, Nichols owned a motor vehicle,
405which was registered in Florida. The vehicle had a Florida
415vehicle tag.
4173. On October 4, 1995, Nichols purchased a 1995 Buick
427Century (VIN 1G4AG55M1S6418376) from an automobile dealer in
435Newton, New Jersey. The amount paid for the automobile was
445$13,710.00.
4474. New Jersey imposes a sales tax on the purchase of
458tangible personal property in New Jersey. Pursuant to Section
46760-570.016, New Jersey Statutes Annotated, New Jersey allows an
476exemption for the payment of sales tax on nonresidents on the
487purchase of a motor vehicle if the conditions of the statute are
499met.
5005. At the time of the purchase in New Jersey, Nichols
511submitted a ST-10 Motor Vehicle Dealer Sales Tax and Use Tax
522Exemption form. The submission of the ST-10 was made in lieu of
534payment of sales taxes. Without the submission of the ST-10, the
545New Jersey dealer would have been required to collect the sales
556tax. Because Nichols filed the ST-10 at the time of the purchase
568of the automobile, no New Jersey sales taxes were paid at that
580time.
5816. One week later, on October 11, 1995, Nichols registered
591his vehicle in Florida. At the time of registration, since no
602sales tax had been paid on the vehicle prior to this
613registration, Florida's use tax of $855.95 was imposed on and
623paid by Nichols. Nichols' Florida tags were then transferred to
633Nichols' new vehicle.
6367. On December 8, 1995, Nichols received notification from
645the State of New Jersey, Department of Treasury, Division of
655Taxation that Nichols' request for an exemption from payment of
665the New Jersey sales tax was denied and Nichols owed the State of
678New Jersey $896.63 in taxes, penalty and interest for the sales
689tax on the purchase of the Buick in New Jersey.
6998. Nichols contacted the Department and told them that he
709was being assessed a sales tax by New Jersey. Nichols was
720advised that he should pay the New Jersey sales tax and file a
733DR-26 form, requesting a refund from the Department.
7419. The charges for penalty and interest were later dropped
751by New Jersey. On December 29, 1995, Nichols mailed a check in
763the amount of $822.60 to the State of New Jersey. On January 5,
7761996, Nichols received a receipt of payment from the New Jersey
787Division of Taxation.
79010. At the time of the registration of Nichols' new Buick
801in Florida and the payment of the Florida use tax on October 11,
8141995, no taxes had been paid on the sale and purchase of Nichols'
8271995 Buick Century in New Jersey or any other state.
837CONCLUSIONS OF LAW
84011. The Division of Administrative Hearings has
847jurisdiction over the parties to and the subject matter of this
858proceeding. Section 120.57(1), Florida Statutes.
86312. The Legislature has authorized the taxation of tangible
872personal property when the item is sold at retail in Florida.
883Section 212.05(1)(a)1a, Florida Statutes. When an item is not
892sold at retail in Florida, and is not subject to the Florida
904sales tax but is being used in Florida, the item is subject to
917the use tax imposed by Section 212.05(1)(b), Florida Statutes,
926which states:
928At the rate of 6 percent of the cost price of
939each item or article of tangible personal
946property when the same is not sold but is
955used, consumed, distributed, or stored for
961use or consumption in this state.
96713. The use tax is also imposed by Section 212.06(1)(a),
977Florida Statutes, which provides:
981The aforesaid tax at the rate of 6 percent of
991the retail sales price as of the moment of
1000sale, 6 percent of the cost price as of the
1010moment of purchase, or 6 percent of the cost
1019price as of the moment of commingling with
1027the general mass of property in this state,
1035as the case may be, shall be collectible from
1044all dealers as herein defined on the sale at
1053retail, the use, the consumption, the
1059distribution, and the storage for use or
1066consumption in this state of tangible
1072personal property or services taxable under
1078this part . . . .
108414. The sale or use of a motor vehicle is subject to the
1097Florida sales or use tax. Section 212.05(1)(a)1 b, Florida
1106Statutes, states:
1108Each occasional or isolated sale of an
1115aircraft, boat, mobile home, or motor vehicle
1122of a class or type which is required to be
1132registered, licensed, titled, or documented
1137in this state or by the United States
1145Government shall be subject to tax at the
1153rate provided in this paragraph. . . .
116115. Rule 12A-1.007(2)(a), Florida Administrative Code,
1167which implements Section 212.05(1)(a)1 b, Florida Statutes,
1174states:
1175There shall be a presumption that any
1182aircraft, boat, mobile home, motor vehicle,
1188or other vehicle purchased in another state,
1195territory of the United States, or the
1202District of Columbia but titled, registered,
1208or licensed in this state is taxable . . . .
121916. Florida permits a credit against Florida use taxes if
1229the taxpayer paid a sales tax to another state on the same
1241purchase of tangible personal property. Florida's credit
1248provision is found in Section 212.06(7), Florida Statutes, which
1257states:
1258The provisions of this chapter do not apply
1266in respect to the use or consumption of
1274tangible personal property, or distribution
1279or storage of tangible personal property for
1286use or consumption in this state, upon which
1294a like tax equal to or greater than the
1303amount imposed by this chapter has been
1310lawfully imposed and paid in another state,
1317territory of the United States, or the
1324District of Columbia. The proof of payment
1331of such tax shall be made according to the
1340rules and regulations of the department. If
1347the amount of the tax paid in another state,
1356territory of the United States, or the
1363District of Columbia is not equal to or
1371greater than the amount of tax imposed by
1379this chapter, then the dealer shall pay to
1387the department an amount sufficient to make
1394the tax paid in the other state, territory of
1403the United States, or the District of
1410Columbia and in this state equal to the
1418amount imposed by this chapter.
142317. The Department has implemented the provisions of
1431Section 212.06(7), Florida Statutes, by rule. Rule
143812A-1.007(3)(a), Florida Administrative Code, provides:
1443A credit is allowed to a person who as
1452purchaser provides documentary evidence that
1457a lawfully imposed sales or use tax has been
1466paid to another state, territory of the
1473United States, or the District of Columbia on
1481any aircraft, boat, mobile home, motor
1487vehicle, or other vehicle, which later
1493becomes subject to Florida tax. The credit
1500shall be the amount of legally imposed sales
1508and use tax paid to another state, territory
1516of the United States, or the District of
1524Columbia.
152518. Section 212.06(7), Florida Statutes, is an exemption
1533from taxation and as such must be strictly construed against the
1544person claiming the exemption. Sebring Airport Authority v.
1552McIntyre , 642 So. 2d 1072 (Fla. 1994); Capital City Country Club
1563v. Tucker , 613 So. 2d 448 (Fla. 1993); Mikos v. City of Sarasota ,
1576636 So. 2d 83 (Fla. 2d DCA 1994); Asphalt Pavers, Inc. v.
1588Department of Revenue , 584 So. 2d 55 (Fla. 1st DCA 1991).
159919. The Department interprets Section 212.06(7), Florida
1606Statutes, and Rule 12-A1.007(3)(a), Florida Administrative Code
1613to mean that in order for the credit to be applicable, a tax had
1627to have been lawfully imposed and paid in another state prior to
1639the tax being due and payable in Florida.
164720. In other cases where a statute similar to Section
1657212.06(7), Florida Statutes, has been interpreted, the other
1665state courts have focused on when the other state tax had been
1677paid. In New England Yacht Sales, Inc. v. Commission of Revenue
1688Services , 198 Conn. 624, 504 A. 2d 605 (Conn. 1986), the
1699Connecticut Supreme Court dealt with a similar statute relating
1708to credit for taxes paid in other states. Connecticut General
1718Statutes, Section 12-430(5), provides:
1722(5) PAYMENT OF SALES OR USE TAX TO ANOTHER
1731STATE. If any service or article of tangible
1739personal property has already been subjected
1745to a sales or use tax by any other state or
1756political subdivision thereof and payment
1761made thereon in respect to its sale or use in
1771an amount less than the tax imposed by this
1780chapter, the provisions of this chapter shall
1787apply, but at a rate measured by the
1795difference, only, between the rate herein
1801fixed and the rate by which the previous tax
1810or use was computed. If such tax imposed in
1819such other state or political subdivision
1825thereof is equivalent to or in excess of the
1834rate imposed under this chapter at the time
1842of such sale or use, then no tax shall be due
1853on such article.
185621. The court in New England Yacht Sales, Inc. rejected a
1867yacht sellers argument that it should be given a credit for use
1879tax paid in another state by the out-of-state purchaser. The
1889court stated:
1891The plaintiff's claim is difficult to square
1898with the language of Section 12-430. That
1905statute provides a credit in the event that
1913'any service or article of tangible personal
1920property has already been subjected to a
1927sales or use tax by any other state . . . and
1939payment made thereon. . . . ' (Emphasis
1947added.) Since the plaintiff's liability for
1953sales tax in this state was antecedent to the
1962purchaser's payment of use tax in Rhode
1969Island, the plaintiff can succeed only if we
1977give retroactive effect to the Rhode Island
1984payment. Such retroactive effect would be
1990inconsistent with the general rule that
1996statutory exemptions are a matter of
2002legislative grace and are thus strictly
2008construed against the taxpayer. The B.F.
2014Goodrich Co. v. Dubno , 196 Conn. 1, 8-9, 490
2023A. 2d 991 (1985); Yaeger v. Dubno , 188 Conn.
2032206, 212, 449 A. 2d 144 (1982). As in
2041Connecticut Theater Foundation v. Brown , 179
2047Conn. 672, 677, 427 A. 2d 863 (1980), the
2056plaintiff cannot rely on an exemption that
2063does not yet exist when its tax obligation
2071becomes due.
207322. In the case of Potashnick Construction Co. v. Louisiana
2083Department of Revenue and Taxation , 470 So. 2d 526 (La. App. 1st
2095Cir. 1985), the court awarded a credit toward Louisiana taxes
2105because the taxpayer had proved that prior to the equipment
2115coming into Louisiana it had paid a sales tax to Missouri. The
2127same result was reached in Allmed, Inc. v. Department of Revenue ,
2138428 101 Ill. App 747, 428 N.E. 714 (Ill. 4th DCA 1981).
215023. In the instant case, at the time the Florida use tax
2162became due and payable, when Nichols applied for titling and
2172registration of his Buick, no sales tax had been paid by Nichols
2184in any other state. Thus, the exemption from taxation contained
2194in Section 212.06(7), Florida Statutes, does not apply and
2203Nichols is not entitled to a credit for sales taxes paid in
2215New Jersey.
2217RECOMMENDATION
2218Based on the foregoing Findings of Fact and Conclusions of
2228Law, it is RECOMMENDED that a Final Order be entered denying
2239Leonard F. Nichols' request for a refund of the use taxes paid to
2252the Department on October 4, 1995.
2258DONE AND ENTERED this 18th day of December, 1997, in
2268Tallahassee, Leon County, Florida.
2272___________________________________
2273SUSAN B. KIRKLAND
2276Administrative Law Judge
2279Division of Administrative Hearings
2283The DeSoto Building
22861230 Apalachee Parkway
2289Tallahassee, Florida 32399-3060
2292(850) 488-9675 SUNCOM 278-9675
2296Fax Filing (850) 921-6847
2300Filed with the Clerk of the
2306Division of Administrative Hearings
2310this 18th day of December, 1997.
2316COPIES FURNISHED:
2318Eric J. Taylor
2321Assistant Attorney General
2324Department of Legal Affairs
2328The Capitol, Tax Section
2332Tallahassee, Florida 32399-1050
2335Leonard F. Nichols, pro se
23401800 Southeast St. Lucie Boulevard
2345Building 4-305
2347Stuart, Florida 34996
2350Larry Fuchs
2352Executive Director
2354Department of Revenue
2357104 Carlton Building
2360Tallahassee, Florida 32399-0100
2363Linda Lettera
2365General Counsel
2367Department of Revenue
2370204 Carlton Building
2373Tallahassee, Florida 32399-0100
2376NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
2382All parties have the right to submit written exceptions within 15
2393days from the date of this Recommended Order. Any exceptions to
2404this Recommended Order should be filed with the agency that will
2415issue the Final Order in this case.
- Date
- Proceedings
- Date: 02/25/1998
- Proceedings: Final Order filed.
- Date: 11/25/1997
- Proceedings: Respondent, Department of Revenue`s Proposed Recommended Order filed.
- Date: 11/24/1997
- Proceedings: Letter to SBK from L. Nichols Re: Response to Post-Hearing Order dated 11/12/97 filed.
- Date: 11/17/1997
- Proceedings: (I Volume) Transcript filed.
- Date: 11/12/1997
- Proceedings: Post-Hearing Order sent out.
- Date: 10/31/1997
- Proceedings: CASE STATUS: Hearing Held.
- Date: 10/22/1997
- Proceedings: Respondent, Department of Revenue`s prehearing brief, Respondent`s prehearing statement, with exhibits attached filed.
- Date: 10/20/1997
- Proceedings: (Petitioner) Exhibits ; Cover Letter filed.
- Date: 08/18/1997
- Proceedings: Amended Notice of Hearing by Video sent out. (Video Final Hearing set for 10/31/97; 9:00am; WPB & Tallahassee)
- Date: 08/18/1997
- Proceedings: Order of Prehearing Instructions sent out.
- Date: 07/22/1997
- Proceedings: Letter to Judge Kirkland from Leonard Nichols re: Reply to Initial Order (filed via facsimile) rec`d
- Date: 07/15/1997
- Proceedings: Respondent, Department of Revenue`s Answer (filed via facsimile).
- Date: 07/09/1997
- Proceedings: Initial Order issued.
- Date: 07/02/1997
- Proceedings: Agency Referral Letter; Petition for An Administrative Hearing, letter form; Agency Action Letter filed.
Case Information
- Judge:
- SUSAN BELYEU KIRKLAND
- Date Filed:
- 07/02/1997
- Date Assignment:
- 07/09/1997
- Last Docket Entry:
- 02/25/1998
- Location:
- West Palm Beach, Florida
- District:
- Southern
- Agency:
- ADOPTED IN TOTO