Department of Revenue v. Merritt Square Corp.
| Decision Date | 24 May 1976 |
| Docket Number | No. Y--411,Y--411 |
| Citation | 334 So.2d 351 |
| Parties | DEPARTMENT OF REVENUE, State of Florida, Appellant, v. The MERRITT SQUARE CORPORATION, a Florida Corporation, Appellee. |
| Court | Florida District Court of Appeals |
Robert L. Shevin, Atty. Gen., J. Kendrick Tucker, Asst. Atty. Gen., for appellant.
Haywood M. Ball, Ulmer, Murchison, Ashby & Ball, Jacksonville, for appellee.
This is an appeal from a final declaratory judgment which held that appellee, The Merritt Square Corporation, is a 'private utility' within the meaning of an exemption statute, § 212.08(4), Florida Statutes, to the extent of 60% Of its operation, and that it is, therefore, exempted from payment of the sales taxes on 60% Of its purchases of natural gas. Appellant, the Department of Revenue, contends that Merritt Square is not a private utility and, thus, does not fall within the exemption as to any of its operation. Merritt Square has cross-assigned as error that portion of the judgment which holds that it is liable for sales tax on 40% Of its natural gas purchases. It contends that it is a private utility as to its entire 'total energy plant' operation.
Section 212.08(4), Florida Statutes, the sales tax exemption here in issue, provides in pertinent part as follows:
'(4) Exemptions, items bearing other excise taxes, etc.--Also exempt are . . . all fuels used by a public or private utility, including municipal corporations and rural electric cooperative associations, in the generation of electric power or energy for sale; . . .'
Appellee owns a shopping center known as Merritt Square located at Merritt Island, Florida, in which it maintains and operates a 'total energy plant' by means of which it generates electricity which is separately metered and sold to approximately 70 tenants of the shopping center for use in their respective businesses. The amount of electricity separately metered and sold to the tenants constitutes approximately 60% Of the electricity generated by the plant. Forty per cent of the electricity generated is consumed by Merritt Square itself in heating, lighting, and cooling the common areas of the shopping center and its own offices and in lighting the parking areas of the shopping center. Each tenant is charged a maintenance fee on a square foot basis for general maintenance of the common areas of the shopping center as well as for utility services provided to the mall and parking areas of the shopping center.
Merritt Square has paid no sales tax on its purchases of natural gas used to operate the plant and this suit has resulted. The salient question is whether or not Merritt Square is a private utility as to all or a portion of its electrical generating dispensing operation. The trial court stated as follows:
'The department argues that the word 'utility', insofar as it describes a type of business, is necessarily limited to those activities which are embraced in the phrase 'public utility', as that term is generally used, and that the words 'public or private utility', as used in the statute, are intended to refer to 'public' utilities as those utilities owned by the public and 'private' utilities as those utilities owned by private citizens. This use of words would require that Florida Power and Light Company, Southern Bell Telephone Company, and the Seaboard Coast Line Railroad Company be excused from any statute regulating 'public utilities' because the stock of these corporations is privately owned.
Use of the phrase 'public or private utility' is, quite obviously, intended to embrace something more than those businesses coming within the definition of public utilities or the legislature would not have included the words 'or private'.
The court recognizes the rules that exemptions from taxing statutes are strictly construed and that an administrative construction of a statute is entitled to great weight. Neither of these rules justifies the court in failing to give effect to the judicial determination of the clear meaning of a statute when that statute is considered in the light of the language used, the purpose of the statute and the means employed by the legislature to accomplish that purpose.'
The trial court went on to hold:
'The fact that gas metered to the plaintiff is used in the generation of electricity only 60% Of which is sold and it is obviously...
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