01-000611 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco, vs. 1947 Main Street, Inc., D/B/A Station Bar
 Status: Closed
Recommended Order on Wednesday, June 13, 2001.


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Summary: Alcoholic beverages vendor failed to prove the accuracy of its sales records. Petitioner proved vendor owed surcharge and penalty on alcoholic beverage sales for consumption on premises.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8DEPARTMENT OF BUSINESS AND )

13PROFESSIONAL REGULATION, )

16DIVISION OF ALCOHOLIC )

20BEVERAGES AND TOBACCO, )

24)

25Petitioner, )

27)

28vs. ) Case No. 01-0611

33)

341947 MAIN STREET, INC., d/b/a )

40STATION BAR, )

43)

44Respondent. )

46______________________________)

47RECOMMENDED ORDER

49Robert E. Meale, Administrative Law Judge of the Division

58of Administrative Hearings, conducted the final hearing in

66Tampa, Florida, on April 10, 2001.

72APPEARANCES

73For Petitioner : Michael Martinez

78Assistant General Counsel

81Department of Business and

85Professional Regulation

871940 North Monroe Street, Suite 60

93Tallahassee, Florida 32399-2202

96For Respondent : Thomas A. Smith

102800 West Platt, Suit e 3

108Tampa, Florida 33606

111STATEMENT OF THE ISSUES

115The issues are whether Respondent has incurred and failed

124to pay Petitioner a surcharge of $12,380.59 plus a penalty of

136$7553.07, in violation of Section 561.501, Florida Statutes, and

145whether Respondent has failed to maintain the records required

154by Section 561.501(2), Florida Statutes, and Rule 61A-4.063(8),

162Florida Administrative Code.

165PRELIMINARY STATEMENT

167By Administrative Action dated March 10, 2000, Petitioner

175alleged that, from September 30, 1996, through December 31,

1841998, Respondent incurred and failed to pay a surcharge of

194$12,380.59 plus a penalty of $7553.07, in violation of Section

205561.501, Florida Statutes.

208By Motion to Amend Administrative Action filed February 26,

2172001, Petitioner requested leave to add the allegation that,

226from September 1 through December 31, 1998, Respondent failed to

236maintain the records required by Section 561.501(2), Florida

244Statutes, and Rule 61A-4.063(8), Florida Administrative Code.

251On March 13, 2001, the Administrative Law Judge granted the

261motion.

262By Request for Hearing dated March 29, 2000, Respondent

271disputed the material allegations and requested a formal

279hearing.

280At the hearing, Petitioner called two witnesses and offered

289into evidence three exhibits. Respondent called two witnesses

297and offered into evidence one exhibit. All exhibits were

306admitted.

307The court reporter filed the transcript on April 16, 2001.

317FINDINGS OF FACT

3201. Respondent holds license number 39-00410 4COP.

327Respondent owns and operates the Station Bar located at 1947

337Main Street in Tampa.

3412. Respondent sells alcoholic beverages, but is not a

350“pouring bar.” In other words, Respondent’s employees sell the

359alcoholic beverages, but never open and pour the alcoholic

368beverage into a glass.

3723. In the typical transaction, Respondent sells a bottle

381or six-pack of alcoholic beverages to a patron, who may also

392purchase from Respondent a nonalcoholic beverage to mix with his

402alcoholic beverage, as well as cups and stirrers. Sometimes,

411the patrons remain in the bar after the purchase. Respondent’s

421bar contains a dance floor, pool tables, video games, and a juke

433box for the entertainment of patrons choosing to remain and

443consume their alcoholic beverages in the bar.

4504. Respondent’s accounting system is fairly simple.

457Placing labels on each bottle, Respondent’s employees remove the

466label each time that a bottle is sold. If a patron chooses to

479consume his drink on the premises, the bartender is supposed to

490record this fact on a piece of paper. Either the bartender or

502Respondent’s manager records sales information on a daily sheet;

511Respondent’s manager transfers the information to weekly and

519monthly sheets. Respondent eventually produced for Petitioner's

526auditor some daily sheets, but they were not sufficiently

535detailed to document Respondent’s position concerning the sales

543of alcoholic beverages for off-premises consumption.

5495. Respondent also uses a two-tape cash register, but it

559shows only the sale amount and is not computerized. Neither

569tape reveals individual sales or whether the patron purchased

578his alcoholic beverage for consumption on premises.

5856. During the audit, Respondent took the position that

594about 60 percent of its sales of all alcoholic beverages were

605for off-premises consumption. However, despite repeated

611requests from Petitioner’s auditor, Respondent never produced a

619any detailed documentation of individual transactions. Instead,

626Respondent produced only highly summarized information

632supporting its position that few, if any, sales were for on-

643premises consumption.

6457. Petitioner’s auditor agreed to allow Respondent to keep

654detailed records of sales for on- and off-premises consumption

663for a period of time and then extrapolate the information back

674to the audit period. However, Respondent did not undertake such

684a process.

6868. Knowing that Respondent made some sales for consumption

695off premises, Petitioner’s auditor allocated 10 percent of all

704sales of beer and liquor for consumption off premises. Applying

714this 10 percent factor, Petitioner’s audit correctly determined

722that, from September 30, 1996, through December 31, 1998,

731Respondent incurred a surcharge liability of $14,114.90, as well

741as a penalty of $5,818.76, for a total liability of $19,933.66,

754taxes and penalty.

757CONCLUSIONS OF LAW

7609. The Division of Administrative Hearings has

767jurisdiction over the subject matter. Section 120.57(1),

774Florida Statutes. (All references to Sections are to Florida

783Statutes. All references to Rules are to the Florida

792Administrative Code.)

79410. Section 561.501(1) imposes a surcharge on the sale by

804licensed vendors of specified volumes of alcoholic beverages

"812sold at retail for consumption on premises." Section

820561.501(2) requires that vendors pay the surcharge in the

829following month to Petitioner and requires the imposition of a

839penalty for late payments. Section 561.501(2) requires

846Petitioner to "assess a late penalty in the amount of 10 percent

858of the amount due per month for each 30 days, or fraction

870thereof, after the 20th of the month, not to exceed a total

882penalty of 50 percent, in the aggregate, of any unpaid

892surcharges."

89311. Rule 61A-4.063(1)(b) states that a "sale," under

901Section 561.501, " occur[s] at the serving of any alcoholic

910beverage for consumption on premises" and includes "any transfer

919of an alcoholic beverage for a consideration." Rule

92761A -4.063(4)(c) states: "If the vendor chooses the sales

936method, the vendor will bear the burden of proof that the method

948used accurately reflects actual sales. If the vendor uses the

958purchases method, the vendor will bear the burden of proof that

969purchases are accurately recorded."

97312. Rule 61A-4.063(8) provides:

977Each vendor licensed in any manner for

984consumption on premises shall maintain

989complete and accurate records on the

995quantities of all alcoholic beverages

1000purchases, inventories, and sales. Records

1005include purchase invoices, inventory

1009records, receiving records, cash register

1014tapes, computer records generated from

1019automatic dispensing devices, and any other

1025records used in determining sales. In the

1032event a licensee maintains an active

1038consumption-on-premises license but has no

1043surcharge sales for a specific period of

1050time , the licensee must file monthly

1056surcharge report DBR form 44-005, Retail

1062Surcharge Report, showing no activity.

1067Records may be maintained on optical or

1074visual storage retrieval systems capable of

1080being viewed, retrieved and reproduced upon

1086request by the division. All records must

1093be maintained for a period of 3 years.

110113. Rule 61A-4.063(9) provides:

1105Employees of the division shall have access

1112to and shall have the right to examine the

1121accounting records, invoices, or any other

1127source documents used to determine a

1133vendor's compliance with this rule. Each

1139vendor is required to give the division the

1147means, facilities and opportunity to verify

1153the accuracy of the surcharge imposed by

1160section 561.501, Florida Statutes. In order

1166to determine whether the monthly reports

1172submitted by the vendor are accurate, the

1179division shall use the formula of beginning

1186inventory plus purchases for the period,

1192less ending inventory, less the spillage

1198allowance, to ascertain sales for the

1204period. Adjustments made to this formula in

1211favor of the licensee will be based on

1219factual, substantiated evidence. The

1223results of the formula will represent sales

1230transactions as defined herein and in

1236section 561.01(9), Florida Statutes, for the

1242period under review.

124514. Respondent has elected to account for its alcoholic

1254beverages transactions through the sales method. By rule,

1262Respondent bears the burden of proving that its sales are

1272accurately recorded. Respondent has failed to satisfy its

1280burden of proof in this regard because it has failed to maintain

1292sufficiently detailed records to permit the reliable

1299differentiation between retail sales for consumption on premises

1307and all other sales.

131115. Respondent's focus on the condition of the container

1320when transferred to the customer is misplaced. Under the

1329statute imposing the surcharge, the focus is on where the

1339customer consumes the beverage , not who opens the container. If

1349the customer consumes the beverage on premises, the surcharge is

1359due.

136016. Petitioner has therefore proved the accuracy of its

1369audit establishing that Respondent owes a surcharge of

1377$14,114.90 and a penalty of $5818.76. However, in the initial

1388and charging pleadings, as well as the prehearing stipulation,

1397Petitioner sought a surcharge of only $12,380.59 and a penalty

1408of $7553.07. This limits the amount of the surcharge at issue

1419to $12,380.59. Because the statute limits the amount of the

1430penalty to 50 percent of the surcharge, the penalty may not

1441exceed $6190.29, for a total liability of $18,570.88.

145017. This is the sole relief sought by Petitioner in its

1461original and amended charging pleadings, as well as the

1470prehearing stipulation, so it is unnecessary to consider further

1479the inadequacy of Respondent's records.

1484RECOMMENDATION

1485It is

1487RECOMMENDED that the Division of Alcoholic Beverages and

1495Tobacco enter a final order finding Respondent liable for

1504$12,380.59 in surcharge and $6190.29 in penalty, for a total

1515liability of $18,570.88.

1519DONE AND ENTERED this 13th day of June, 2001, in

1529Tallahassee, Leon County, Florida.

1533___________________________________

1534ROBERT E. MEALE

1537Administrative Law Judge

1540Division of Administrative Hearings

1544The DeSoto Building

15471230 Apalachee Parkway

1550Tallahassee, Florida 32399-3060

1553(850) 488- 9675 SUNCOM 278-9675

1558Fax Filing (850) 921-6847

1562www.doah.state.fl.us

1563Filed with the Clerk of the

1569Division of Administrative Hearings

1573this 13th day of June, 2001.

1579COPIES FURNISHED:

1581Richard Turner, Director

1584Division of Alcoholic Beverages and Tobacco

1590Department of Business and

1594Professional Regulation

15961940 North Monroe Street, Northwood Centre

1602Tallahassee, Florida 32399-2202

1605Hardy L. Roberts, III, General Counsel

1611Department of Business and

1615Professional Regulation

16171940 North Monroe Street, Northwood Centre

1623Tallahassee, Florida 32399-2202

1626Michael Martinez

1628Assistant General Counsel

1631Department of Business and

1635Professional Regulation

16371940 North Monroe Street, Suite 60

1643Tallahassee, Florida 32399-2202

1646Thomas A. Smith

1649800 West Platt, Suite 3

1654Tampa, Florida 33606

1657Captain John L. Blair

16611313 Tampa Street

1664Park Trammel Building, Suite 702

1669Tampa, Florida 33602

1672NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

1678All parties have the right to submit written exceptions within

168815 days from the date of this recommended order. Any exceptions

1699to this recommended order must be filed with the agency that

1710will issue the final order in this case.

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PDF
Date
Proceedings
PDF:
Date: 02/20/2002
Proceedings: BY ORDER OF THE COURT: (Appellee`s motion for extension of time is granted and the answer brief shall be served by March 7, 2002) filed.
PDF:
Date: 10/01/2001
Proceedings: Letter to DOAH from the District Court of Appeal filed. DCA Case No. 2D01-4191
PDF:
Date: 08/20/2001
Proceedings: Final Order filed.
PDF:
Date: 08/18/2001
Proceedings: Agency Final Order
PDF:
Date: 06/13/2001
Proceedings: Recommended Order
PDF:
Date: 06/13/2001
Proceedings: Recommended Order issued (hearing held April 10, 2001) CASE CLOSED.
PDF:
Date: 06/13/2001
Proceedings: Recommended Order cover letter identifying hearing record referred to the Agency sent out.
PDF:
Date: 05/07/2001
Proceedings: Petitioner`s Proposed Recommended Order (filed via facsimile).
PDF:
Date: 05/04/2001
Proceedings: Respondent`s Memorandum and Proposed Findings of Fact, Conclusions of Law, and Proposed Order (filed via facsimile).
Date: 04/16/2001
Proceedings: Transcript of Proceeding filed.
Date: 04/10/2001
Proceedings: CASE STATUS: Hearing Held; see case file for applicable time frames.
PDF:
Date: 04/04/2001
Proceedings: Pre-Hearing Stipulation (filed by Petitioner via facsimile).
PDF:
Date: 03/13/2001
Proceedings: Order issued (Petitioner`s Motion to Amend Notice of Administrative Action is granted).
PDF:
Date: 02/26/2001
Proceedings: Motion to Amend Notice of Administrative Action (filed via facsimile).
PDF:
Date: 02/22/2001
Proceedings: Order of Pre-hearing Instructions issued.
PDF:
Date: 02/22/2001
Proceedings: Notice of Hearing issued (hearing set for April 11, 2001; 9:00 a.m.; Tampa, FL).
PDF:
Date: 02/22/2001
Proceedings: Amended Response to Initial Order (filed via facsimile).
PDF:
Date: 02/20/2001
Proceedings: Unilateral Response to Initial Order (filed via facsimile).
PDF:
Date: 02/13/2001
Proceedings: Initial Order issued.
PDF:
Date: 02/13/2001
Proceedings: Request for Hearing filed.
PDF:
Date: 02/13/2001
Proceedings: Administrative Action filed.
PDF:
Date: 02/13/2001
Proceedings: Agency referral filed.
Date: 02/26/2000
Proceedings: Motion to Amend Notice of Administratice Action (filed via facsimile).

Case Information

Judge:
ROBERT E. MEALE
Date Filed:
02/13/2001
Date Assignment:
04/09/2001
Last Docket Entry:
02/20/2002
Location:
Tampa, Florida
District:
Middle
Agency:
ADOPTED IN TOTO
 

Counsels

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