04-002241 Sheraton Bal Harbour Associates, Ltd. vs. Department Of Revenue Status: Closed Recommended Order on Monday, October 4, 2004.

Summary: Petitioner was not entitled to a refund of sales taxes paid on valet parking.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

SHERATON BAL HARBOUR )

ASSOCIATES, LTD., )

)

Petitioner, )

) Case No. 04 - 2241

vs. )

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to an agreement of the parties and to the order

entered by the undersigned on August 27, 2004, the parties

stipulated to all relevant facts and agreed to the admission

into evidence of 14 sequentially numbered exhibits.

Consequently, no evidentia ry hearing was held in this matter.

Claude B. Arrington, a duly - designated Administrative Law Judge

of the Division of Administrative Hearings, presided over this

proceeding.

APPEARANCES

For Petitioner: Joseph C. Moffa, Esquire

Law Offices of Moffa & Gainor, P.A.

One Financial Plaza, Suite 2202

100 Southeast Third Avenue

Fort Lauderdale, Florida 33394

For Respondent: Martha F. Barrera, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to a refund for sales taxes

paid by Petitioner to R espondent on valet parking transactions

for the period May 1, 1997 through April 30, 2002.

PRELIMINARY STATEMENT

The Findings of Fact set forth in this Recommended Order

are taken from the Stipulation of Facts submitted by the

parties. The Petitioner w ill be referred to as the Sheraton and

Respondent will be referred to as the Department.

Since there was no final hearing, there is no transcript of

the proceeding. Each party filed a Proposed Recommended Order,

which has been duly - considered by the und ersigned in the

preparation of this Recommended Order.

FINDINGS OF FACT

1. The Department is the agency of the State of Florida

charged with implementing the state tax statutes.

2. The Sheraton operates a full service hotel, the

Sheraton Bal Harbour, l ocated at 9701 Collins Avenue, Bal

Harbour, Florida.

3. The Sheraton is licensed as a hotel under the

provisions of Chapter 509, Florida Statutes (2004). The

Sheraton’s principal business is providing lodging, food, and

other services to the guests of it s hotel.

4. The Sheraton provides valet parking to its hotel guests

and visitors. Upon arrival at the Sheraton, a guest or visitor

arriving by motor vehicle provides his or her vehicle and the

vehicle keys to the parking attendant. The parking staff

pro vides the guest or visitor with a valet parking ticket. The

parking attendant collects the valet parking fee upon departure

or charges it to the guest room.

5. The Sheraton’s parking is located in a building on the

Sheraton’s grounds that is secure. No hotel guests, visitors,

or members of the general public are allowed in the parking

building.

6. No guest or visitor to the Sheraton can park his or her

vehicle on the Sheraton’s grounds without using the valet

parking. There are no self - parking spaces o n the Sheraton’s

grounds.

7. No member of the valet parking staff and no member of

the hotel staff is authorized to use a guest’s or visitor’s

vehicle for any activity other than to park and return the

vehicle to the guest or visitor at his or her reque st.

8. There is no time when the vehicle would not be

delivered to the guest or visitor upon request. The Sheraton’s

guest or visitor may request his or her automobile at any time

and it is delivered. 1

9. The Sheraton’s guest may go in and out and reque st the

vehicle several times a day or night without a separate charge.

(This may not apply to a visitor to the Sheraton.)

10. There are not very many public overnight parking spots

near the Sheraton.

11. The Bal Harbour Shops 2 are located across the str eet

from the Sheraton. The Bal Harbour Shops has its own paid self -

parking and valet parking services available. The Sheraton, on

a regular basis, utilizes the Bal Harbour Shops’ parking spaces

for its valet parking when there is overflow from the parkin g

available on its premises. The Sheraton pays a per space charge

to the Bal Harbour Shops for these parking spaces, and sales tax

is included in this charge.

12. The Sheraton’s fee for valet parking services is a

flat fee and does not identify a separ ate charge for valet

services, for a parking space, or for sales tax.

13. The Sheraton advises its guests and visitors that it

is not responsible for damages to the vehicle parked by the

valet parking except through its staff’s negligence. The

Sheraton d oes pay on a regular basis for fixing cars that are

damaged while in its possession.

14. The Sheraton’s valet parking ticket and signs posted

at its entrance contain terms and conditions for the valet

parking, which include the following:

Vehicle is acc epted for parking only. We

(Sheraton) assume no liability for fire,

theft, vandalism, flood, or damage in any

case except through our own negligence. We

are not bailees and are not responsible for

loss or damage of any article left in

vehicle including b ut not limited to radar

detectors, cellular phones, money, etc. The

owner of the vehicle acknowledges that he is

in constructive possession and control

thereof at all times. . . .[ 3 ]

15. No notification was made by the Sheraton to its guests

or visitor s regarding any sales tax on valet parking during the

period at issue in this proceeding. Through internal accounting

records, the Sheraton allocated a portion of the parking fees

collected to sales tax and remitted that amount to the

Department. Sales t ax was not stated on any invoice nor did the

Sheraton’s valet parking signs posted at the hotel’s entrance

mention sales tax. During the period from May 1, 1997 through

April 30, 2002, the valet parking charges ranged from $12.00 to

$18.00 per day for ove rnight valet parking.

16. On a monthly basis, during the refund period from

May 1, 1997 through April 30, 2002, the Sheraton paid to the

Department sales taxes on valet parking in the total amount of

$329,497.20.

17. On or about July 9, 2002, 4 the Sherat on applied to the

Department for a refund in the amount of $329,497.20 for the

sales taxes it paid during the refund period.

18. On June 11, 2003, the Department denied the refund

request.

19. On August 4, 2003, the Sheraton filed a protest with

the Depa rtment.

20. On April 27, 2004, the Department issued a Notice of

Decision sustaining the denial of the refund.

21. The Sheraton thereafter timely filed the Petition for

Administrative Hearing which initiated this proceeding.

CONCLUSIONS OF LAW

22. Th e Division of Administrative Hearings has

jurisdiction over the subject matter of and the parties to this

proceeding pursuant to Sections 120.569 and 120.57(1), Florida

Statutes.

23. If the Sheraton’s valet parking transactions are non -

taxable transaction s, the Sheraton would be entitled to a refund

of the sum it paid to the Department pursuant to Section

215.26(1), Florida Statutes, which provides, in pertinent part,

as follows:

(1) The Chief Financial Officer may

refund to the person who paid same, or his

or her heirs, personal representatives, or

assigns, any moneys paid into the State

Treasury which constitute:

(a) An overpayment of any tax, license,

or account due;

(b) A payment where no tax, license, or

account is due; and

(c) Any payme nt made into the State

Treasury in error. . . .

24. The Sheraton, as the applicant asserting its

entitlement to the subject refund, has the burden of proving by

a preponderance of the evidence its entitlement thereto. See

Florida Department of Transpor tation v. J.W.C. Co., Inc. , 396

So. 2d 778 (Fla. 1st DCA 1981) and Balino v. Dep’t of Health and

Rehabilitative Services , 346 So. 2d 349 (Fla. 1st DCA 1977).

25. Section 212.03(6), Florida Statutes, provides, in

relevant part, as follows:

(6) It is t he legislative intent that

every person is engaging in a taxable

privilege who leases or rents parking or

storage spaces for motor vehicles in parking

lots or garages. . . . For the exercise of

this privilege, a tax is hereby levied at

the rate of 6 perce nt on the total rental

charged.

26. There are two separate aspects of the Sheraton’s valet

parking transaction: the service aspect and the parking aspect. 5

During the period at issue in this proceeding, the two aspects

of the Sheraton’s valet parking t ransaction were inextricably

intertwined. One aspect of the transaction could not be

accomplished without the other. A hotel guest or visitor

desiring to park his or her vehicle had no choice but to use

Sheraton’s valet parking because there was no self - parking

available. The guest or visitor was charged one fee for the

valet parking transaction, so there was no separate statement of

the fee for the service aspect of the transaction from the fee

for the parking aspect of the transaction. 6 Consequently, the

entire fee charged by the Sheraton for a valet parking

transaction was taxable pursuant to Section 231.03(6). 7

27. The Sheraton also argues that the valet parking

transaction is a non - taxable bailment, within the meaning of

Florida Administrative Co de Rule 12A - 1.070(22), which provides,

in relevant part, as follows:

(22)(a) When tangible personal property

is left upon another’s premises under a

contract of bailment, the bailee is not

exercising a privilege taxable under the

provisions of Section 2 12.031, F.S.,

relating to leases, licenses, or rentals of

real property.

(b) A bailment is a contractual

agreement, oral or written, whereby a person

(the bailor) delivers tangible personal

property to another (the bailee) and the

bailor for the duratio n of the relationship

relinquishes his exclusive possession,

control, and dominion over the property, so

that the bailee can exclude, within the

limits of the agreement, the possession of

the property to all others. If there is no

such delivery and relinq uishment of

exclusive possession, and the owner’s

control and dominion over the property is

not dependent upon the cooperation of the

person on whose premises the property is

left, and his access thereto is in no wise

subject to the latter’s control, it wi ll

generally be held that such person is a

tenant, lessee, or licensee of the space

upon the premises where the property is

left. . . .

* * *

(d) A lease, license, or bailment is

indicative of a contractual relationship,

and the terms are not mutua lly exclusive.

Whatever label is attached to a contract, in

determining whether a transaction is a

bailment or a lease or a license,

consideration will be given to the

manifested intention of the parties to which

relationship has been created.

(e) In t he absence of an express

contract, the creation of a bailment

requires that possession and control pass

from the bailor and the bailee; there must

be full transfer, actual or constructive, so

as to exclude the property from the

possession of the owner and all other

persons and give the bailee sole custody and

control for the time being.

28. The valet parking transaction is not a bailment

because the hotel guest or visitor has the right to demand

possession of his or her vehicle at any time and because th e

Sheraton did not intend to create a bailment relationship as

evidenced by the following statements on the valet parking

ticket and signs: “we [the Sheraton] are not bailees” and “[t]he

owner of the vehicle acknowledges that he is in constructive

possessi on and control thereof at all times.”

29. Moreover, while Rule 12A - 1.070(22)(a) exempts any

transaction that meets the definition of a bailment from taxes

imposed by Section 231.031, the rule relied upon by the Sheraton

does not apply to the subject tax on the rental or lease of

parking spaces, which is imposed pursuant to Section 231.03(6).

Section 212.031 imposes a general tax on the lease or rental of

real property, but the provisions of Section 212.031(1)(a)3

clearly and unequivocally provide that th e provisions of Section

212.031 do not apply to the tax on the rental or lease of

parking spaces imposed pursuant to Section 231.03(6).

30. The Department’s construction of the taxing statutes

pertaining to leased or rented parking spaces is long - standing .

Dealing with facts similar to the ones at issue in this

proceeding, the Department stated it’s position in Technical

Assistance Advisement 98A - 033 that a condominium’s charge for

valet parking is a taxable transaction pursuant to Section

312.03(6), Flor ida Statutes (1998), where the visitor or guest

is required to use unassigned parking space and valet service.

The Department’s long - standing interpretation of a statute it is

required to administer is entitled to deference and should be

sustained if that interpretation is a permissible

interpretation. See Smith v. Crawford , 645 So. 2d 513 (Fla. 1st

DCA 1991); D’Alto v. State, Dept. of Environmental Protection ,

860 So. 2d 1003 (Fla. 1st DCA 2003); Bd. of Podiatric Medicine

v. Florida Medical Ass’n , 779 So . 2d 658 (Fla. 1st DCA 2001);

and Office of Fire Code Official of Collier County Fire Control

and Rescue District v. Florida Dept. of Financial Services , 869

So. 2d 1233 (Fla. 2nd DCA 2003). The Department established in

this proceeding that its interpret ation was not only a

permissible construction of the relevant statutes and rule, its

construction is the proper construction.

31. The Sheraton has failed to meet its burden of proving

its entitlement to the subject refund.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department enter a final order

denying the subject application for a refund.

DONE AND ENTERED this 4th day of October, 2004, in

Tallahassee, Leon County, Florida.

S

___________________________________

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administrative Hearings

T he DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.do ah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 4th day of October, 2004.

ENDNOTES

1/ The second sentence, which is redundant of the first, is

included only as part of the parties’ stipulation.

2/ The Bal Harbour Shops is a shopping mall.

3/ The quoted terms pertinent to valet parking are included on

the parking ticket and on the signs posted at the Sheraton’s

entrance, which are include d among the stipulated exhibits.

This language is not a separately stipulated fact.

4/ The Stipulation of Facts submitted by the parties has the

incorrect date of July 9, 2003. Joint Exhibit 7 reflects that

the correct date is July 9, 2002.

5/ In rea ching this conclusion, the undersigned has considered

the Sheraton’s contention that valet parking is essentially a

non - taxable service that should not be divided into discrete

elements. The conclusion reached is the view espoused by the

Department, which the undersigned finds to be better - reasoned

than the Sheraton’s argument and more consistent with analogous

statements of agency policy.

6/ The undersigned rejects as being unpersuasive the Sheraton’s

argument that it did not rent parking places to gu ests within

the meaning of Section 231.30(6). Whether a vehicle is parked

in a space by a valet driver or by the owner of the vehicle, the

fact remains that a portion of the valet parking transaction

included a fee for the lease or rental of a parking spa ce within

the meaning of Section 212.03(6). Had the Sheraton structured

its valet parking transaction differently, it is possible that

the service aspect of the transaction would not have been

taxable.

7/ See AT&T v. Florida Dep’t of Revenue , 764 So 3 d 665 (Fla 1st

DCA 2000), review denied, 804 So. 2d 328 (Fla. 2001), which

pertains to an analogous calculation of a “sales price” and

Florida Administrative Code Rule 12A - 1.070(22), which provides,

in relevant part, as follows:

(10) When the owner o f a business, or the

operator of a business who is a lessee or

licensee, provides floor space to any

person, and in addition thereto and in

connection therewith also provides certain

services to such person . . . and where the

charges for such services are not separately

stated in the agreement and on the invoices

or other billings, the total consideration

paid under the agreement is taxable.

COPIES FURNISHED :

Joseph C. Moffa, Esquire

Law Offices of Moffa & Gainor, P.A.

One Financial Plaza, Suite 2202

1 00 Southeast Third Avenue

Fort Lauderdale, Florida 33394

Martha F. Barrera, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

Bruce Hoffmann, General Counsel

Department of Revenue

204 Carlton Building

Ta llahassee, Florida 32399 - 0100

James Zingale, Executive Director

Department of Revenue

104 Carlton Building

Tallahassee, Florida 32399 - 0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days fro m the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.