97-002996 Leonard F. Nichols vs. Department Of Revenue
 Status: Closed
Recommended Order on Thursday, December 18, 1997.

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Summary: Taxpayer not entitled to refund of uses taxes paid on out-of-state car purchase. Sales tax in other state were paid after Florida use taxes were paid.





13Petitioner, )


16vs. ) Case No. 97-2996





31Respondent. )



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



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


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.


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


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.


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


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


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


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.


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,


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


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


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:


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.


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.



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.


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


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.

Select the PDF icon to view the document.
Date: 02/25/1998
Proceedings: Final Order filed.
Date: 01/24/1998
Proceedings: Agency Final Order
Date: 01/24/1998
Proceedings: Recommended Order
Date: 12/18/1997
Proceedings: Recommended Order sent out. CASE CLOSED. Hearing held 10/31/97.
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

Date Filed:
Date Assignment:
Last Docket Entry:
West Palm Beach, Florida

Related DOAH Cases(s) (1):

Related Florida Statute(s) (3):

Related Florida Rule(s) (1):