Associated Dry Goods Corp. v. Department of Revenue

• Decision Date: 20 July 1976
• Docket Number: No. BB--125,BB--125
• Citation: 335 So.2d 832
• Parties: ASSOCIATED DRY GOODS CORPORATION, a Virginia Corporation, d/b/a Robinson's of Florida, Petitioner, v. The DEPARTMENT OF REVENUE, State of Florida, Respondent. . First District
• Court: Florida District Court of Appeals

Page 832

335 So.2d 832

ASSOCIATED DRY GOODS CORPORATION, a Virginia Corporation, d/b/a Robinson's of Florida, Petitioner, v. The DEPARTMENT OF REVENUE, State of Florida, Respondent.

No. BB--125.

District Court of Appeal of Florida. First District.

July 20, 1976.

Rehearing Denied Aug. 25, 1976.

Joel D. Bronstein of Fisher, Sauls, Adcock, DeLoach & Gowen, Port Richey, and C. Graham Carothers & James D. Beasley of Ausley, McMullen, McGehee, Carothers & Proctor, Tallahassee, for petitioner.

Robert L. Shevin, Atty. Gen., and Larry Levy, Asst. Atty. Gen., for respondent.

RAWLS, Judge.

By petition for review of final agency action, Associated Dry Goods (Robinson's) challenges a penalty imposed by the Department of Revenue (Department) pursuant to the provisions of Florida Statute 201.17(2)(b).

Robinson's began operating stores in Florida in September, 1973. A major portion of its retail sales in Florida is made pursuant to revolving charge accounts. In March of 1975, the Department audited all revolving charge account sales which had been made by Robinson's since September, 1973. As a result of this audit, the Department issued a proposed notice of assessment of tax in the sum of $17,925.00 (Florida Statute 201.08(2)) and a penalty in a like sum (Florida Statute 201.17(2)). Robinson's contested the assessments in an administrative proceeding (Chapter 120, Florida Statutes), and the hearing officer entered a recommended order which upheld the validity of the assessment of documentary tax (F.S. 201.08(2)) and rejected the applicability of the penalty (F.S. 201.17(2)). The Governor and Cabinet, sitting as the Department of Revenue, after reviewing the hearing officer's recommendation, entered the order now appealed which sustained the assessment and penalty initially imposed by the Department. In this review Robinson's challenges only the assessment of the penalty in the sum of $17,925.00, on the ground that the penalty assessment is without legal authority.

In support of its contention, Robinson's correctly asserts that the sole statutory authority for imposition of same is found in Florida Statute 201.17 which provides, in pertinent part, as follows:

'(2) Any document, instrument, or paper upon which the tax under this chapter is imposed and which, upon audit or at time of recordation, does not bear the proper value of stamps shall subject the person or persons liable for the tax upon the document, instrument or paper to:

(a) Purchase of the stamps not affixed; and

(b) Payment of penalty to the department of revenue equal to the purchase price of the stamps not affixed. This penalty is to be in addition to and not in lieu of any other penalty imposed by law.'

Robinson's then argues that the authority for assessment of documentary stamp tax on the accounts involved here is found in the last sentence of Florida Statute 201.08(2) which provides: 'No documentary stamps shall be required to be attached to instruments under the provisions of this subsection.' Robinson's then poses the following question and answer:

'What is the purchase price of stamps not affixed to the revolving charge agreements and sale tickets encompassed by the Department of Revenue's audit, which stamps were required by law to be affixed to such instruments? The answer, quite simply is none.'

In rebutting Robinson's argument, the Department emphasizes that Robinson's construction would result in an absurd result. As pointed out by the Department, Florida Statute 201.17(2) provides that '(a)ny document, instrument, or paper upon which the tax under this chapter is imposed and which, upon Audit . . . does not bear the Proper value of stamps shall Subject the Person or persons liable for the tax' (emphasis supplied) to purchase of the stamps not affixed, and payment of penalty to the Department of Revenue equal to the purchase price of the stamps not affixed.

Robinson's syllogism is basically that Florida Statute 201.08(2) states '(n)o documentary stamps shall be required to be attached' to the subject document; therefore, the provision of Florida Statute 201.17(2)(b) which states that '(p)ayment of penalty to the department of revenue equal to the purchase price of the stamps Not affixed' (emphasis supplied) is inapplicable, since the subject stamps were not to be affixed. To use a West Florida colloquialism, 'that dog won't hunt'. The sophistical argument of Robinson's rejects the clear legislative scheme...