14-003115 American Import Car Sales, Inc. vs. Department Of Revenue Status: Closed Recommended Order on Friday, April 17, 2015.

Summary: Petitioner met its burden of demonstrating assessment was incorrect. Recommended re-assessment utilizing procedure set forth in section 212.12(6)(b), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMERICAN IMPORT CAR SALES, INC.,

Petitioner,

vs. Case No. 14 - 3115

DEPARTMENT OF REVENUE,

Respondent.

_______________________________/

RECOMMENDED ORDER

This case came before Adm inistrative Law Judge Todd P.

Resavage for final hearing by video teleconference on January 15,

2015, at sites in Tallahassee and Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Joseph C. Moffa, Esquire

Moffa, Gainor and Sutton, P.A .

One Financial Plaza, Suite 2202

100 Southeast Third Avenue

Fort Lauderdale, Florida 33394

For Respondent: Carrol Y. Cherry, Esquire

Department of Legal Affairs

Offi ce of the Attorney General

PL - 01, The Capitol

Revenue Litigation Bureau

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE

Whether the Department of Revenue ' s ( " Department " )

assessment of tax, penalt y, and interest against American Import

Car Sales, Inc., is valid and correct.

PRELIMINARY STATEMENT

On April 29, 2014, the Department issued a Notice of

Reconsideration ("NOR") to Petitioner consisting of tax in the

amount of $2,324,298.42, plus pe nalties and interest.

Petitioner, on June 30, 2014, filed its Petition for Chapter 120

Hearing to contest the NOR. The matter was referred to the

Division of Administrative Hearings ( " DOAH " ) for assignment of an

Administrative Law Judge on July 8, 2014.

The final hearing was originally scheduled for September 8,

2014; however, after several continuances, the final hearing

transpired on January 15, 2015. At hearing, the Department

presented the testimony of Pamela Kruse, Martha Gregory, and Joe

Lev y, and the Department ' s Exhibits identified as A through Z,

AA through FF, and H H through QQ were admitted. Petitioner

p resented the testimony of Steven Levy, and Petitioner ' s Exhibits

identified as A through F were admitted.

The final hearing Tran script was filed at DOAH on

February 10, 2015. Petitioner filed an Unopposed Motion for

Extension of Time to File Proposed Recommended Orders, and said

motion was granted. The parties timely filed proposed

recommended orders and the same have been consi dered in drafting

this Recommended Order.

Unless otherwise indicated, all rule and statutory

reference s are to the versions in effect during the audit period .

FINDING S OF FACT

1. The Department is the agency responsible for

administering the revenu e laws of the State of Florida, including

the imposition and collection of the state ' s sales and use taxes.

2. Petitioner, American Import Car Sales, Inc., is a

Florida S - corporation with its principle place of business and

mailing address in Hollywood, Florida. Petitioner , during the

period of June 1, 2007 , through May 31, 2010 ( " assessment

period " ), was in the business of selling and financing new and

used motor vehicles.

3. On June 29, 2010, the Department issued to Petitioner a

Notice of Intent to Audit Books and Records (form DR - 840) for

sales and use tax for the assessment period. Said notice

informed Petitioner that the audit would begin on or around

60 days from the date of the notice and included an attachment

identifying the records and inf ormation that would be reviewed

and should be available when the audit commence d .

4. Specifically, the Sales and Use Tax Information

Checklist attachment requested the following: chart of accounts,

general ledgers, cash receipts journals, cash disburse ment

journals, federal income tax returns, county tangible property

returns, Florida Sal es and Use Tax returns, sales journals, sales

tax exemption certificates (resale certificates), sales invoices,

purchase invoices, purchase journals, lease agreements f or real

or tangible property, depreciation schedules, bank and financial

statements, detail of fixed asset purchases, and other documents

as needed.

5. On the same date, in addition to the Notice of Intent,

the Department issued to Petitioner , inter ali a, an Electronic

Audit Survey, and a Pre - Audit Questionnaire and Request for

Information.

6. On September 17, 2010, the auditor requested the

following records to review by October 4, 2010: (1) general

l edger for the assessment period; (2) federal r etu rns for 2007,

2008, and 2009; (3) lease agre ement for the business location;

(4) deal fold ers for the assessment period; (5) all expense

purchase inv oices for the assessment period; (6) all purchase

invoices relating to assets added to the Depreciation Sch edu le

during the assessment period; (7) resale/exemption certificates,

shipping documents , and any other exempt sales documentation to

support exempt sal es during the assessment period; (8) bank

statem ents for the assessment periods; and (9) all worksheets

used to prepare monthly sales tax returns for the assessment

period.

7. On October 5, 2010, the auditor met with Petitioner ' s

President Joe Levy, Petitioner ' s Secretary Joanne Clements, and

Petitioner ' s Certified Public Accountant , Steve Levy . At that

time, Petitioner provided a hard copy of the 2007 and 2008

general ledger and profit and loss statements. At that time, the

auditor again advised Petitioner that the Department needed the

federal returns, as well as the completed electronic audit survey

a nd pre - audit questionnaire.

8. On October 5, 2010, the Department and Petitioner signed

a Consent to Extend the Time to Issue an Assessment or to File a

Claim for Refund (form DR - 872). The consent provided that

assessments or claims for refunds may be filed at any time on or

before the extended statute of limitations, December 31, 2011.

9. On October 18, 2010, Petitioner provided the Department

with the completed electronic audit survey and pre - audi t

questionnaire.

10. Thereafter , Petitioner provi ded the Department with the

following books and records : ( 1) 2009 " deal folders ; "

(2) Petitioner ' s general ledger in Excel format for June 1, 2007 ,

through December 31, 2010 ; (3) January 2009 t hrough May 2010 bank

statements; (4) a list ing of exempt sale s; and (5) lease

agreements with attendant invoices.

11. On August 25, 2011, the Department issued its

assessment, entitled a Notice of Intent to Make Audit Changes

(form DR - 1215) ( " NOI " ) . Said notice provided that Respondent owed

$2,324,298.42 in tax, $581,074.61 in penalties, and $515,117.04

in interest through August 25, 2011.

12. The NOI addressed Petitioner ' s alleged failure to

collect and remit tax on: (1) certain vehicle sales (audit

Exhibit A01 - Sales Tax Collected and Not Remitted) 1 / ; (2) veh icle

sales with no documentation regarding its exempt status (audit

Exhibit A02 - Disallowed Exempt Sales) 2 / ; (3) motor vehicle sales

where no discretionary tax was assessed (audit Exhibit A03 -

Discretionary Surtax) 3 / ; and (4) unreported sales (audit Exhibit

A04 - Unreported Sales). The assessment also related to

Petitioner ' s alleged failure to pay/accrue tax on: (1) taxable

purchases (audit Exhibit B01 - Taxable Purchases); (2) fixed assets

(audit Exhibit B02 - Fixed Assets); and (3) commercial rent

(Exhibit B03 - Commercial Realty).

13. At hearing, Petitioner stipulated that the only

component of the NOI remaining at issue pertains to audit Exhibit

A04 - Unreported Sales, as Petitioner has conceded A01, A02, A03 ,

and all fee schedules.

14. An understanding of aud it Exhibit A04 , and the

assessment methodology employed by the auditor, is articulated i n

the Department ' s Exhibit MM, entitled Explanation of Items, which

is set forth, in pertinent part, as follows:

Reason for Exhibit :

The records received for the audit were

inadequate. The taxpayer provided bank

statements for the period of January 2009

through May 2010. This period was deemed the

test period for unreported sales. A review

of the bank statements for the test period

revealed that sales were underrepor ted. This

exhibit was created to assess for sales tax

on unreported sales.

Source of Information :

Sales tax returns and Bank of America bank

statements for the test period of January

2009 through May 2010; The Department of

Motor Vehicles (DMV) [sic] was acquired for

the period of June 2007 through May 2010.

Description of Mathematical Adjustments :

The bank statements were reviewed for the

period of January 2009 through May 2010.

Taxable Sales on sales tax returns, sales tax

on sales tax returns, ta xable sales on

Exhibit on [sic] Exhibit A01, sales tax

Exhibit A01 and Exempt Sales on Exhibit A02

was subtracted from Bank Deposits to arrive

at unreported sales. See calculations on

page 53.

Unreported sales for the period of January

2009 through May 2 010 were scheduled into

this exhibit. A rate analysis of the DMV

database resulted in an effective tax rate of

6.2689. Scheduled transactions were

multiplied by the effective tax rate of

6.2689 to determine the tax due on the test

period. A percentage o f error was calculated

by dividing the tax due by the taxable sales

for each test period. The percentage of

error was applied to taxable sales for each

month of the audit period which resulted in

additional tax due.

15. T he auditor ' s analysis of the te st period, applied to

the entire assessment period, resulted in a determination that

Pet itioner owed $1,599,056.23 in tax for unreported sales.

16. On August 25, 2011 , the auditor met with Joe and Steve

Levy to discuss and present the N OI. At that time, Joe and Steve

Levy were advised that Petitioner had 30 days to provide

addition al documents to revise the N OI.

17. On September 28, 2011, the Department issued

correspondence to Petitioner advising that since a response to

the N OI had not been received , the case was being forwarded to

Tallahassee for issuance of the Notice of Proposed Assessment

( " NOPA " )(form DR - 831) .

18. On October 7, 2011, the Department issued the NOPA,

which i dentified the deficiency resulting from an audit of

Petitioner ' s books and records for the assessment period.

Pursuant to the NOPA, Petitioner was assessed $2,324,298.42 in

tax, $31,332.46 in penalty, and $534,284.54 in interest through

October 7, 2011. The NOPA provided Petitioner with its rights to

an informal written pro test, an administrative hearing, or a

judicial proceeding.

19. On December 5, 2011, Petitioner filed its Informal

Written Protest to the October 7, 2011, NOPA. The protest noted

that the NOPA was " not correct and substantially overstated. "

The protest raised several issues: (1) that the calculation was

primarily based upon bank statement deposits; (2) not all

deposits are s ales and sources of income; and (3) a substantial

amount of the deposits were exempt sales and loans. The protest

further requeste d a personal conference with a Department

specialist.

20. On January 10, 2013, Martha Gregory, a tax law

specialist and technical assistance dispute resolution employee

of the Department, issued correspondence to Petitioner. The

documented purpose of t he correspondence was to request

additional information regarding Petitioner ' s protest of the

NOPA. Among other items, Ms. Gregory requested Petitioner

provide the following:

[D]ocumentation and explanations regarding

the source of income Ï vehicle sales, loan

payments, etc. Ï for each deposit. For vehicle

sales deposits, provide the customer name,

vehicle identification number and amount; for

loan payments, provide proof of an existing

loan and the amount received from the

borrower; and for any other deposi ts, provide

documentation of the source of this income.

21. A conference was held with Petitioner on February 7,

2013. At the conference, Ms. Gregory discussed the January 10,

2013, correspondence including the request for information. The

Department did not receive the requested information.

22. Following the conference, the Department provided the

Petitioner an additional 105 days to provide documentation to

support the protest. Again, Petitioner failed to provide the

information requested.

23. On June 14, 2013, the Department issued its Notice of

Decision ( " NOD " ) . The NOD concluded that Petitioner had failed

to demonstrate that it was not liable for the tax, plus penalty

and interest, on unreported sales as scheduled in audit

Exhibit A04, Unr eported Sales, as assessed within the compliance

audit for the assessment period. Accordingly, the protested

assessment was sustained.

24. On July 15, 2013, Petitioner filed a Petition for

Reconsideration to appeal the Notice of Decision ( " POR " ). The

P OR advanced the following issues: (1) the records examined were

not the books and records of Petitioner; (2) the audit should be

reduced because the auditor ' s methodology was incorrect; and

(3) the Petitioner should be allowed a credit for bad debts take n

during the audit period.

25. At Petitioner ' s request, on October 22, 2013,

Petitioner and Ms. Gregory participated in a conference regarding

the POR. At the confer ence, Petitioner requested a 30 - day

extension to provide documentation in support of Pet itioner ' s

POR. No additional documentation was subsequently provided by

Petitioner.

26. On April 29, 2014, the Department issued its Notice of

Reconsideration ( " NOR " ). The NOR sustained the protested

assessment. Petitioner, on June 30, 2014, filed its Petition for

Chapter 120 Hearing to contest the NOR.

27. Petitioner did not file its federal tax returns for the

years 2008, 2009, and 2010 until after the Department issued the

NOR. Indeed, the federal returns were not filed until June 3,

2014. 4 /

28. Ms. Kruse conceded that the auditor ' s assessment

u tiliz ed Petitioner ' s bank statements to determine unreported

sales; however, the auditor did not make any adjustments for

" unusual items that would have been on the face of the bank

statements. " Ms . Krus e further acknowledged that the auditor ' s

assessment does not reference Petitioner ' s general ledger

information .

29. Ms. Kruse acknowledged that , for several representative

months, t he general ledger accurately report ed the deposits for

the bank stateme nts provided. When presented with a limited

comparison of the bank statement and the general ledger,

Ms. K ruse further agreed that, on several occasions, deposits

noted on the bank statements were probably not taxable

transactions; however, the same were included as taxable sales in

the auditor ' s analysis. Ms. Kruse credibly testified that the

same appeared to be transfers of funds from one account into

another; however, because the Department only possessed the bank

statements from one account, and nev er received the requested

" back up information " concerning the other account, the

Department could not discern the original source of the funds.

CONCLUSIONS OF LAW

30 . DOAH has jurisdiction over the subject matter and

parties to this proceeding pursuant to sections 120.569,

120.57(1), and 212.18, Florida Statutes.

31 . The Department is the agency authorized to administer

the tax laws of the State of Florida. §§ 20.21 and 213.05, Fla.

Stat.

32 . The Florida sales and use tax is an excise tax on the

privilege of engaging in business in the state, not a tax on the

property sold. §§ 212.05 and 212.06, Fla. Stat. As noted in

section 212.05,

It is hereby declared to be the legislative

intent that every person is exercising a

taxable privilege who engag es in the business

of selling tangible personal property at

retail in this state, including the business

of making mail order sales, or who rents or

furnishes any of the things or services

taxable under this chapter, or who stores for

use or consumption in this state any item or

article of tangible personal property as

defined herein and who leases or rents such

property within the state.

(1) For the exercise of such privilege, a

tax is levied on each taxable transaction or

incident, which tax is due and payable as

follows:

(a)1.a. At the rate of 6 percent of the

sales price of each item or article of

tangible personal property when sold at

retail in this state, computed on each

taxable sale for the purpose of remitting the

amount of tax due the state, a nd including

each and every retail sale.

33 . Section 212.02(15) defines " sale " to include " [a] ny

transfer of title or possession, or both, exchange, barter,

license, lease, or rental, conditional or otherwise, in any

manner or by any means whatsoever, of tangible personal property

for a consideration . "

34 . Section 212.02(19) defines " tangible personal

property, " as follows:

" Tangible personal property " means and

includes personal property which may be seen,

weighed, measured, or touched or is in any

manner perceptible to the senses, including

electric power or energy, boats, motor

vehicles and mobile homes as defined in

s. 320.01 (1) and (2), aircraft as defined in

s. 330.27 , and all other types of vehicles.

The term " tangible personal property " does

not include stocks, bonds, notes, insurance,

or other obligations or securities or pari -

mutuel tickets sold or issued under the

racing laws of the state.

35 . Section 212.06 defines the term " dealer. " There is no

disput e that Petitioner is a dealer within the meaning of that

definition. Every person who is engaged in business as a dealer

under the sales and use tax provisions of chapter 212 must be

registered by the Department to collect and remit tax. § 212.18,

Fla. S tat.

36 . The Department is authorized to prescribe the records

to be kept by all dealers that are subject to sales and use tax.

§ 212.12(6)(a), Fla. Stat. Section 212.12(6)(b) provides as

follows:

For the purpose of this subsection, if a

dealer does n ot have adequate records of his

or her retail sales or purchases, the

department may, upon the basis of a test or

sampling of the dealer ' s available records or

other information relating to the sales or

purchases made by such dealer for a

representative pe riod, determine the

proportion that taxable retail sales bear to

total retail sales or the proportion that

taxable purchas es bear to total purchases.

Thi s subsection does not affect the duty of

the dealer to collect, or the liability of

any consumer to pa y, any tax imposed by or

pursuant to this chapter.

37 . Florida Administrative Code Rule 12 - 3.0012(3) defines

" adequate records, " as follows:

" Adequate records " means books, accounts, and

other records sufficient to permit a reliable

determination of a tax deficiency or

overpayment. Incomplete records can be

determined to be adequate.

(a) To be sufficient to make a reliable

determination, adequate records, including

supporting documentation, must be :

1. Accurate, that is, the records must be

free from material error;

2. Inclusive, that is, the records must

capture transactions that are needed to

determine a tax deficiency or overpayment;

3. Authentic, that is, the records must be

worthy of acceptance as based on fact; and

4. System at ic, tha t is, the records must

organize transactions in an orderly manner.

38 . Section 212.12(5) addresses the Department ' s

authorization to conduct audits and a dealer ' s failure to make

records available:

(5)(a) The department is authorized to audit

or inspe ct the records and accounts of

dealers defined herein, including audits or

inspections of dealers who make mail order

sales to the extent permitted by another

state, and to correct by credit any

overpayment of tax, and, in the event of a

deficiency, an ass essment shall be made and

collected. No administrative finding of fact

is necessary prior to the assessment of any

tax deficiency.

(b) In the event any dealer or other person

charged herein fails or refuses to make his

or her records available for inspe ction so

that no audit or examination has been made of

the books and records of such dealer or

person, fails or refuses to register as a

dealer, fails to make a report and pay the

tax as provided by this chapter, makes a

grossly incorrect report or makes a report

that is false or fraudulent, then, in such

event, it shall be the duty of the department

to make an assessment from an estimate based

upon the best information then available to

it for the taxable period of retail sales of

such dealer, the gross pr oceeds from rentals,

the total admissions received, amounts

received from leases of tangible personal

property by such dealer, or of the cost price

of all articles of tangible personal property

imported by the dealer for use or consumption

or distribution or storage to be used or

consumed in this state, or of the sales or

cost price of all services the sale or use of

which is taxable under this chapter, together

with interest, plus penalty, if such have

accrued, as the case may be. Then the

department shal l proceed to collect such

taxes, interest, and penalty on the basis of

such assessment which shall be considered

prima facie correct, and the burden to show

the contrary shall rest upon the dealer,

seller, owner, or lessor, as the case may be.

39 . Sectio n 212.13(5)(c) provides that, " [o]nly records,

receipts, resale certificates, and related documents which are

available to the auditor when such audit begins shall be deemed

acceptable for the purposes of conducting such audit. "

40 . The Department bear s the initial burden to demonstrate

that the assessment has been made against Petitioner, and the

factual and legal grounds upon which the Department made the

assessment. The burden then shifts to Petitioner to demonstrate

by a preponderance of the eviden ce that the assessment is

incorrect. See IPC Sports, Inc. v. Dep ' t of Revenue , 829 So. 2d

330, 332 (Fla. 3d DCA 2002); § 120.80(14)(b)2 , Fla. Stat .

41. Tax laws should be construed strongly in favor of the

taxpayer and against the government with all a mbiguities or

doubts resolved in the taxpayer ' s favor. Lloyd Enterprises, Inc.

v. Dep ' t of Revenue , 651 So. 2d 735, 739 (Fla. 5th DCA 1995).

42. S ections 212.12(5)(b) and (6)(b) although mutually

exclusive, are identified as the statutory bases for the proposed

agency action. The Notice of Decision, in relevant part,

provides as follows:

When a dealer fails or refuses to make his or

her records available for inspection, the

Department is required to make an assessment

based upon the best information t hen

available. This assessment is considered

prima facie correct, and the burden is on

Taxpayer to show the contrary, as referenced

in ss. 212.12(5)(b), 212.12(6)(b), F.S.

43. Subsection 212. 12 (5)(b) would have authorized

Respondent to " make an assessme nt " against Petitioner " from an

estimate based on the best information then available " if it were

shown that Petitioner failed or refused to make his records

available for inspection " so that no audit or examination has

been made of the books and records. " While Petitioner did not

maintain or provide all of the books and records required and

requested, the same is not tantamount to a wholesale failure or

refusal. The statutory prerequisite in section 212. 12 (5)(b) for

an estimate , therefore , does not exist in this proceeding, as

Petitioner provided bank statements, general ledger

documentation, and other do cumentation.

44. Petitioner did not , as the Department asserts, maintain

and/or provide to the Department adequate records within the

definition of Fl orida Administrative Code Rule 12 - 3.0012(3) ,

after being provided extensions, conferences, and correspondence

outlining the needed documentation. Accordingly, the Department

was authorized , pursuant to section 212.12(6)(b) , upon the basis

of a test or sam pling of Petitioner ' s available records or other

information relating to the sales or purchases made by

Petitioner, to determine the proportion that taxable sales bear

to tot al sales.

45. The undersigned has not been cited to any statute or

rule that de fines or sets forth the proper methodology for

conducting such a " test " or " sampling " where, as here, the

dealer ' s records are inadequate. The only legislative

descrip tion of sampling is found in section 212.12(6)(c) , the

application of which is limited t o where a dealer ' s records are

adequate but voluminous in nature and substance. The methodology

described in section 212.12(6)(c) was not employed in the instant

case.

46. S imilarly, the undersigned has not been cited to any

statute or rule that sets fo rth the Department ' s discretion

concerning which of Petitioner ' s available documents the

Department may accept or reject (if any) in conducting sampling

or testing.

47. Section 212.13(3), Florida Statutes, provides that

b ooks and records kept in the reg ular course of business include ,

inter alia, general ledgers . Petitioner provided the Department

its general ledger in an Excel format for June 1, 2007 , through

December 31, 2010 (31 of the 36 months of the audit period).

48. The Department ' s assessmen t methodology to determine

unreported sales utilizes Petitioner ' s bank statements, but does

not attempt to reconcile and/or incorporate data from

Petitioner ' s general ledger which may (or may not) alter the

assessment of unreported sales.

49 . The Depart ment met its initial burden demonstrating

that an assessment was made against Petitioner, and the factual

and legal grounds upon which the Department made the assessment.

The undersigned concludes, however, that Petitioner demonstrated

by a preponderance of the evidence that the assessment is flawed

in that the Department either : 1) proceeded under section

212. 12 (5)( b) , which is clearly inapp li c able as Petitioner

provided certain books and records; 2) proceede d under a hybrid

application of sections 212. 1 2 (5)(b) and (6)(b) , which is

inappropriate as the subsections are mutually exclusive; or

3) assuming , arguendo , that the Department correctly proceeded

only under section 212. 12 (6)(b) , the assessment failed to give

appropriate consideration to Petitioner ' s available records,

i.e. , the general ledger, contrary to section 212. 12 (6)(b).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that

The Department conduct a new assessment of Petitioner ' s

sales and use t ax based on a test or sampling of Petitioner ' s

available records or other information relating to the sales or

purchases made by Petitioner for a representative period, giving

due consideration to Petitioner ' s available records, including

Petitioner ' s gene ral ledger, to determine the proportion that

taxable retail sales bear to total retail sales.

DONE AND ENTERED this 17th day of April , 2015 , in

Tallahassee, Leon County, Florida.

S

TODD P. RESAVAGE

Administrative Law Ju dge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of April , 2015 .

ENDNOTE S

1 / Audit Exhibit A01 assesses sales tax collected and not

remitted. The source of information for this exhibit was the

sales tax returns and the Florid a Department of Highway Safety

and Motor Vehicles ( " DMV " ) database for the entire assessment

period. Tax reported in the DMV database was scheduled as tax

due in this exhibit for the entire audit period. Tax reported on

monthly sales tax returns was scheduled as credits for each month

in the audit period. The difference betwe en the tax due and

credits resulted in additional tax due.

2 / Audit Exhibit A02 assesses exempt sales where Petitioner

failed to provide valid exemption documentation. The source of

information for this exhibit was sales and use tax returns and a

list of exempt sales comp i l ed by Petitioner ' s Power of Attorney

for the period of January 2009 through May 2010. Exempt sales

reported in the sales tax returns and the list of exempt sales

provided by the Power of Attorney were disallowed and scheduled

into th is exhibit. This exhibit utilized a rate analysis of the

DMV database resulting in an effective tax rate of 6.2689.

Scheduled transactions were multiplied by the effective tax rate

of 6.2689 to calculate additional tax due.

3 / Audit Exhibit A03 assess es sales tax where Petitioner failed

to collect the discretionary surtax rate based on the Florida

resident county. The source of information was the DMV database

for the entire audit period. Sales contracts in which Petitioner

failed to collect the corr ect discretionary surtax rate based on

the applicable Florida county were scheduled and taxed at the

applicabl e tax rate. Sales tax at the 6 percent tax rate was

subtracted which resulted in additional county tax due.

4 / On November 22, 2013, Petitione r provided the Department with

an unsigned and unfiled copy of its 2008 federal income tax

return. It appears that Petitioner also provided unsigned,

undated, and unfiled copies of the 2009 and 2010 federal income

tax returns at some point during the info rmal protest and/or

present proceedings; however, the undersigned is unable to

determine from the record when said documents were provided.

COPIES FURNISHED:

Nancy L. Staff, General Counsel

Department of Revenue

Post Office Box 6668

Tallahassee, Flori da 32314 - 6668

(eServed)

Joseph C. Moffa, Esquire

Moffa, Gainor and Sutton, P.A.

One Financial Plaza, Suite 2202

100 Southeast Third Avenue

Fort Lauderdale, Florida 33394

(eServed)

Carrol Y. Cherry, Esquire

Department of Legal Affairs

Office of the At torney General

PL - 01, The Capitol

Revenue Litigation Bureau

Tallahassee, Florida 32399 - 1050

(eServed)

Marshall Stranburg, Executive Director

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32314 - 6668

(eServed)

NOTICE OF RIGHT TO SUBM IT 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.