05-003780 Automated Petroleum And Energy Co., Inc. vs. Department Of Revenue Status: Closed Recommended Order on Friday, April 28, 2006.

Summary: At the time that the four fuel deliveries were made to Georgia, Petitioner was not licensed as an exporter. Therefore, Petitioner is not eligible to receive a refund of the state fuel tax that it paid.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AUTOMATED PETROLEUM AND ENERGY )

CO., INC. , )

)

Petitioner , )

)

vs. ) Case No. 05 - 3780

)

DEPARTMENT OF REVENUE , )

)

Respondent . )

)

RECOMMENDED OR DER

Pursuant to notice a final hearing was held in this case

before Carolyn S. Holifield, a duly - designated Administrative

Law Judge of the Division of Administrative Hearings, on

January 27, 2006, in Tampa, Florida.

APPEARANCES

For Petitioner: Willard B urnett , pro se

Automated Petroleum &

Energy Co., Inc.

1201 Oakfield Drive, Suite 109

Brandon, Florida 33509

For Respondent: James O. Jett, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE

The issue is whether Petitioner is entitled to a refund of

motor fuel taxes paid for moto r fuel exported from Florida when

Petitioner was not licensed as an exporter at the time of the

transactions.

PRELIMINARY STATEMENT

Petitioner, Automated Petroleum and Energy Company, Inc.

(Automated Petroleum or Petitioner), paid the State of Florida

$8,7 75.16 for motor fuel taxes on four (4) deliveries of diesel

fuel. Subsequently, Petitioner requested that Respondent,

Department of Revenue (Department), refund the motor fuel taxes.

In the request for the refund, Petitioner indicated that the

fuel was p icked up on the wrong account by the carrier. Instead

of being picked up on the appropriate Georgia distributor's

account, the fuel was loaded on Petitioner's account.

After the Department reviewed the refund request, it

determined that Petitioner did not qualify for a refund of the

motor fuel taxes paid. On April 1, 2005, the Department issued

a Notice of Proposed Refund Denial (Proposed Refund Denial). By

letter dated April 20, 2005, Petitioner protested the Proposed

Refund Denial. On August 16, 2005, the Department issued a

Decision of Denial, indicating that Petitioner was not eligible

for the requested refund of $8,775.16. Petitioner timely

challenged the Department's denial of the refund request.

On or about October 12, 2005, the Department forwar ded the

matter to the Division of Administrative Hearings (Division) for

assignment of an Administrative Law Judge to conduct a hearing.

By N otice issued October 28, 2005, the case was set for hearing

as noted above.

Prior to the final hearing, the partie s filed a Joint

Stipulation of Facts, setting forth facts to which the parties

agreed and which required no proof at hearing.

At hearing, Petitioner presented the testimony of Wi l lard

Burnett, wholesale manager of Automated Petroleum, and Bill

McKnight, pr esident of Automated Petroleum. The Department

presented the testimony of Ron Gay, a senior tax specialist with

the Department. The parties offered and had one exhibit, Joint

Exhibit 1, admitted into evidence.

After the hearing, on February 1, 2006, the Department

filed the deposition transcript of Daniel Way, a driver for

Kenan Advantage Group/Kenan Transport.

The hearing Transcript was filed with the Division on

February 15, 2006. At the conclusion of the hearing, the

parties agreed to file proposed re commended orders ten days

after the hearing Transcript was filed. Subsequently, the

Department filed an unopposed motion, which requested that the

time for filing proposed recommended orders be extended to

March 14, 2006. Pursuant to an O rder issued Mar ch 1, 2006, the

unopposed motion was granted. Both parties timely filed post -

hearing submittals, which have been considered in preparation of

this Recommended Order.

FINDINGS OF FACT

1. Petitioner is a Florida corporation engaged in the

business of purch a sing and reselling motor fuel.

2. Petitioner, whose principle place of business is

1201 Oakfield Drive, Brandon, Florida 33509, does business

within and without the S tate of Florida .

3. Petitioner currently has a Florida Fuel Tax License ,

which is n umb er 59 - 2150510.

4. On April 5, 2004, and May 7, 12, and 13, 2004, upon

Petitioner's orders, Kenan Transport loaded diesel fuel at the

Marathon facility in Jacksonville, Florida , and delivered the

fuel to Petitioner's Kingsland, Georgia , location.

5. D anie l Way, the driver employed by Kenan Transport ,

delivered the April 5, 2004 ; May 7, 2004 ; May 12, 2004 ; and

May 13, 2004, fuel loads to Petitioner's Kin g s land , Georgia ,

location.

6. For the April 5, 2004 ; May 7, 2004 ; May 12, 2004 ; and

May 13, 2004, fuel deliveries to Petitioner's Kingsland,

Georgia , facility, Petitioner paid a total of $8,775.16 in

Florida fuel taxes.

7. The amount of Florida fuel taxes paid for each delivery

was as follows: $2,192.99, for the April 5, 2004, delivery;

$2,187.77, for the May 7, 2004, delivery; $2,187.20, for the

May 12, 2004, delivery; and $2,187.20, for the May 13, 2004,

delivery.

8. At the time the four fuel deliveries noted in

paragraphs 4 and 5 above were made to Petitioner's Kingsland,

Georgia , facility, Petition er did not have an exporter fuel

license.

9. Petitioner obtained an exporter fuel license that

beca me effective December 1, 2004.

10. The parties stipulated to the findings in paragraphs 1

through 9 .

11. Petitioner asserts that the Department should ref und

the fuel taxes it paid because, in the four transactions,

Petitioner's account was mistakenly billed for the fuel.

12. Gowan Oil Company (Gowan) is a distributor based in

Folkston, Georgia, and has contracts with many fuel terminals in

Jacksonville.

13. Pursuant to an arrangement between Petitioner and

Gowan, Petitioner did not usually buy fuel from any of the

terminals in Jacksonville. Instead, Petitioner bought fuel for

its truck stop in Georgia from Gowan , since Gowan could buy fuel

at the Jacks onville terminals for less than Petitioner could.

14. Depending on the price of fuel on a particular day,

Petitioner would call Kenan Transport and tell the company to

pick up fuel from a particular terminal in Jacksonville. The

instructions relative to the above transactions were for the

driver to pick up BP fuel and to put it on Gowan's account.

15. Notwithstanding the specific instructions given to the

driver , he made two mistakes with respect to the four fuel

purchases. He not only mistakenly picked up the wrong fuel,

Marathon fuel, but he also put the fuel he picked up on

Petitioner's account, not on Gowan's account.

16. The mistake made by the Kenan Transport driver is a

common mistake made by transport drivers, who are "hauling out

of multiple te rminals every day."

17. Drivers have loading cards for all of the accounts on

which they pick up fuel. When picking up fuel, the driver

should use the loading card which corresponds to the account for

that particular load. In the four transactions that are at

issue in this proceeding, the driver "loaded" the card for

Petitioner's account, no t the card for Gowan's account.

18. Petitioner did not have an export license at the time

of the transactions. Therefore, Marathon properly billed

Petitioner for th e Florida fuel taxes on the fuel that was

picked up in Jacksonville, Florida, charged on Petitioner's

account, and delivered to Petitioner's truck stop in Kingsland,

Georgia.

19. Petitioner tried unsuccessfully to have Marathon bill

the subject fuel purc hases to Gowan.

20. If Gowan had been billed, it would not have been

required to pay Florida fuel taxes on the four fuel purchases

because it had an export license.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the subject matter of and parties to this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2005).

22. As the party asserting the affirmative of this issue,

the burden of proof is on Petitioner to demonstrate by a

preponderance of the evidence that he is ent itled to a refund.

See Florida Department of Transportation v. J.W.C . Company,

Inc. , 396 So. 2d 778, 788, (Fla. 1 st DCA 1981); Balino v.

Department of Health and Rehabilitative Services , 348 So. 2d 349

(Fla. 1st DCA 1977).

23. Subsection 206.87(2)(a), Fl orida Statutes (2003), 1

imposes taxes on diesel fuel when it is removed, in this state,

"from a terminal if diesel fuel is removed at the rack."

24. Section 206.052, Florida Statutes, provides that, in

certain circumstances, licensed exporters may purchas e motor

fuels for export without paying the fuel taxes.

25. Subsection 206.052(1), Florida Statutes, provides in

relevant part the following:

206.052 Export of tax - free fuels

(1) A licensed exporter may purchase from

a terminal supplier at a terminal taxable

motor fuels for export from this state

without paying the tax imposed pursuant to

this part only und er the following

circumstances:

(a) The exporter has designated to the

terminal supplier the destination for

delivery of the fuel to a location outside

the state;

(b) The exporter is licensed in the state

of destination and has supplied the terminal

supplier with that license number;

(c) The exporter has not been barred from

making tax - free exports by the department

for violation of s. 206 .051(5); and

(d) The terminal supplier collects and

remits to the state of destination all taxes

imposed on said fuel by the destination

state.

2 6 . Section 206.01, Florida Statutes, which defines terms

relevant to Chapter 206, Florida Statutes, provi des in relevant

part:

206.01 Definitions. -- As used in this

chapter:

* * *

(7) "Fuel tax" means and includes any tax

imposed by the laws of the state upon or

measured by the sale, use, distribution , or

consumption of motor fuel.

* * *

(18) "Terminal" is a storage and

distribution facility for taxable motor or

diesel fuel, supplied by pipeline or marine

vessel, that has the capacity to receive and

store a bulk transfer of taxable motor or

diesel fuel, including a loading rack

throug h which petroleum products are

physically removed into tanker trucks or

rail cars, and that is registered with the

Internal Revenue Service as a terminal.

* * *

(20) "Export" means any removal of

taxable motor or diesel fuels from this

state o ther than by bulk transfer.

(21) "Exporter" means any person that has

met the requirements of s. 206.052 and that

is licensed by the department as an exporter

of taxable motor or diesel fuels either from

substorage at a bulk facility or directly

from a terminal rack to a destination

outside the state.

2 7 . Subsection 206.02(1), Florida Statutes, provides that

a person may not engage in business as an exporter unless such

person has a license issued by the Department.

2 8 . Subsection 206.02(1)(g), Flor ida Statutes, provides:

(1) It is unlawful for any person to

engage in business as a terminal supplier,

importer, exporter, blender, biodiesel

manufacturer, or wholesaler of motor fuel

within this state unless such person is the

holder of an unrevoked l icense issued by the

department to engage in such business. A

person is engaging in such business if he or

she :

* * *

(g) Exports taxable motor or diesel fuels

either from substorage at a bulk facility or

directly from a terminal rack to a

de stination outside the state.

29 . To become licensed as an exporter, a person must

comply with the requirements of Sections 206.02 and 206.03,

Florida Statutes. Upon compliance, the Department is required

to issue a license which authorizes the person to conduct

business in the state as an the exporter, unless the person is

disqualified by Subsections 206.026(1) and (2), Florida

Statutes.

30 . Pursuant to conditions prescribed in Subsection

206.051(4), Florida Statutes, a credit or refund is available

whe n fuel taxes have been paid of fuel exported from this state.

That subsection states in pertinent part the following:

A licensed exporter shall be authorized to

take a credit on its monthly fuel tax return

or apply for a refund of all state fuel tax

and local option fuel tax paid on fuel

exported from the state in compliance with

this section. To establish the right to

refund, an exporter shall provide a copy of

the return filed in the destination state

showing the import of all fuels claimed for

refund . The department shall, absent any

violation, authorize a refund based on the

information submitted.

3 1 . The relevant and material facts in this case are not

disputed and were, in fact, stipulated to by Petitioner.

3 2 . In April and May 2004, Petitioner purchased fuel from

a terminal in Jacksonville, Florida, and exported the fuel to

Georgia. At the time of these transactions, Petitioner was not

a licensed exporter. Accordingly, Petitioner was required to

pay the fuel taxes due pursuant to Section 206.8 7, Florida

Statutes.

3 3 . The undisputed evidence is that Petitioner obtained an

exporter license after the April and May 2004 fuel deliveries to

Georgia. Petitioner, therefore, was not within the purview of

Subsection 206.052(1), Florida Statutes, quoted above, that

enumerates the circumstances in which a "licensed exporter" is

not required to pay taxes.

3 4 . In this case, Petitioner seeks a refund of the fuel

taxes which it paid on the diesel fuel that was delivered to

Georgia in April and May 2004.

3 5 . Pursuant to S ubs ection 206.051(4), Florida Statutes,

quoted above, there are instances where refunds and credits of

fuel taxes are authorized. However, the language in that

provision expressly states that only "[a] licensed exporter"

shall be authorized to apply for a refund of all fuel taxes.

Given the clear language of the statute, any unlicensed person

engaged in exporting does not meet the requisite qualification

for applying for a refund.

3 6 . Here, Petitioner's license as an exporter did not

become effective until December 1, 2004, about seven months

after the April and May 2004 fuel deliveries to Georgia. Having

failed to qualify as an exporter prior to exporting the fuel

from Florida to Georgia, Petitioner is not eligible to apply for

or receive a refund of all fuel taxes paid on fuel exported from

the state.

3 7 . Petitioner failed to meet its burden to show that it

is entitled to the refund under Florida law, and , therefore , the

denial of the refund should be sustained.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the Department of Revenue enter a final

order denying Petitioner's application for a refund of fuel

taxes.

DONE AND ENTERED this 28th day of April , 2006 , in

Tallahassee, Leon Co unty, Florida.

S

CAROLYN S. HOLIFIELD

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 (8 50) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of April , 2006 .

ENDNOTE

1/ All references to Florida Statutes are to Florida Statutes

(2003) unless otherwise indicated.

COPIES FURNISHED :

Willard Burnett

Automated Petroleum &

Energy Co., Inc.

1201 Oakfield Drive, Suite 109

Brandon, Florida 33509

James O. Jett, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

Bruce Hoffman n, General Counsel

Department of Revenue

The Carlton Building, Room 204

Tallahassee, Florida 32399 - 0100

James Zingale, Executive Director

Department of Revenue

The Carlton Building, Room 104

Tallahassee, Florida 32399 - 0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from 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.