Department of Revenue v. Amrep Corp.

• Decision Date: 09 March 1978
• Docket Number: No. 50549,50549
• Citation: 358 So.2d 1343
• Parties: DEPARTMENT OF REVENUE, consisting of Ruebin O'D. Askew, as Governor of Florida, Bruce A. Smathers, as Secretary of State, Robert L. Shevin, as Attorney General, Gerald A. Lewis, as Comptroller, Philip F. Ashler, as Treasurer, Doyle Conner, as Commissioner of Agriculture, and Ralph Turlington, as Commissioner of Education; and J. Ed Straughn, as Executive Director of the Florida Department of Revenue, Appellants, v. AMREP CORPORATION, an Oklahoma Corporation, Silver Springs Shores, Inc., a Florida Corporation, Silver Springs Golf and Country Club, Inc., a Florida Corporation, Marion Realty, Inc., a Florida Corporation, Holiday Shores Tours, Inc., a Florida Corporation, Mid-Florida Lakes, Inc., a Florida Corporation, Florida Ridge Utilities Corp., a Florida Corporation, Panorama Inn of Florida, Inc., aFlorida Corporation, Rolling Greens, Inc., a Florida Corporation, and AmrepConstruction Corp., a NewMexico Corporation, Appellees.
• Court: Florida Supreme Court

Page 1343

358 So.2d 1343

DEPARTMENT OF REVENUE, consisting of Ruebin O'D. Askew, as Governor of Florida, Bruce A. Smathers, as Secretary of State, Robert L. Shevin, as Attorney General, Gerald A. Lewis, as Comptroller, Philip F. Ashler, as Treasurer, Doyle Conner, as Commissioner of Agriculture, and Ralph Turlington, as Commissioner of Education; and J. Ed Straughn, as Executive Director of the Florida Department of Revenue, Appellants, v. AMREP CORPORATION, an Oklahoma Corporation, Silver Springs Shores, Inc., a Florida Corporation, Silver Springs Golf and Country Club, Inc., a Florida Corporation, Marion Realty, Inc., a Florida Corporation, Holiday Shores Tours, Inc., a Florida Corporation, Mid-Florida Lakes, Inc., a Florida Corporation, Florida Ridge Utilities Corp., a Florida Corporation, Panorama Inn of Florida, Inc., aFlorida Corporation, Rolling Greens, Inc., a Florida Corporation, and AmrepConstruction Corp., a NewMexico Corporation, Appellees.

No. 50549.

Supreme Court of Florida.

March 9, 1978.

As Modified On Denial of Rehearing May 25, 1978.

Robert L. Shevin, Atty. Gen., and E. Wilson Crump, II, Asst. Atty. Gen., Tallahassee, for appellants.

Parker D. Thomson and Susan W. Diner of Paul & Thomson, Miami, for appellees.

On Petition For Clarification

SUNDBERG, Justice.

This appeal tests the validity of the exemption of intercompany accounts receivable from the intangible personal property tax afforded to domiciliary corporate "affiliated groups" under Section 199.023(7), Florida Statutes (1975), when measured against the Equal Protection Clause of the United States Constitution.

The appellees in this cause are Amrep Corporation, an Oklahoma corporation having its principal place of business in New York, and nine wholly-owned subsidiaries of Amrep which are incorporated in or actually doing business in Florida. The members of the corporate group not incorporated in Florida, including Amrep, are duly qualified by the Secretary of State to do business in Florida. This action was commenced in circuit court by the appellees under the provisions of Section 199.242(1), Florida Statutes (1975), ¹ to contest certain intangible personal property tax assessments totaling $422,512.58 rendered against them by the appellant, Department of Revenue, for the years 1972, 1973, and 1974. The complaint asserted that Section 199.023(7), Florida Statutes (1975), ² defining "affiliated groups" for the purpose of creating the privilege of filing a consolidated return exempting intercompany accounts receivable violated appellees' right to equal protection of the laws, and rendered the assessment void. Such was alleged because the exemption is available only to those affiliated groups of corporations whose parents are either incorporated in Florida or maintain their principal place of business in Florida. The parties stipulated that with the exception of this residency requirement, appellees meet the definition of an "affiliated group." Appellees, therefore, took the position in their pleadings that they are entitled to file a consolidated return, which eliminates all intercompany receivables notwithstanding the fact that the parent corporation is not incorporated in Florida nor does it maintain its principal place of business in this State.

Relying on the statutory exemption (§ 199.052(5), Florida Statutes (1975)), appellees chose not to return their intercompany accounts for taxation during the years in question. The proposed assessment is based entirely on such intercompany accounts. Appellees have challenged other aspects of the assessment, but by stipulation the parties have agreed there would be no assessment at all if the intercompany accounts could not be taxed.

The instant cause arrives at this Court by way of appeal from a final judgment on the pleadings entered by the Circuit Court of the Second Judicial Circuit for Leon County, wherein the trial judge declared the statute unconstitutional on Equal Protection grounds. Prior to that final judgment, the Department had moved to dismiss the complaint on the grounds that appellees (plaintiffs below) had not exhausted administrative remedies. Consequently, the circuit court lacked jurisdiction to hear the case because the appellees had not complied with the provisions of the Administrative Procedure Act, Chapter 120, Florida Statutes (1975). Subsequently, Amrep filed an "Amendment to Complaint" asserting alternatively that the circuit court has jurisdiction under Section 86.011, Florida Statutes (1975), ³ in addition to Section 199.242(1), Florida Statutes (1975). Appellant then moved to strike this amendment on the ground that it did not cure the defects raised by the initial motion to dismiss. The motion to strike and motion to dismiss were denied. The Department then filed a notice of interlocutory appeal to the District Court of Appeal, First District, but took a voluntary dismissal of that appeal prior to adjudication on the merits.

At the culmination of pleadings, the court entered its final judgment, finding the statute unconstitutional and cancelling the assessments against Amrep's intercompany accounts receivable. However, the circuit judge refused to award costs to appellees, which order is the basis for Amrep's cross-assignments of error.

We have jurisdiction pursuant to Article V, Section 3(b)(1), Florida Constitution, because the judgment of the trial court initially and directly passed upon the validity of Section 199.023(7), Florida Statutes (1975).

Three issues are presented for resolution by this appeal. They are:

(i) Whether appellee taxpayers have a right of action in the circuit courts of this State to challenge on constitutional grounds an intangible personal property tax assessment and obtain a declaration of their rights in view of the provisions of Chapter 120, Florida Statutes (1975);

(ii) Whether Section 199.023(7), Florida Statutes (1975), defining "affiliated groups" in such a way as to require that the common parent be incorporated in the State of Florida or have its principal place of business in this State violates the Equal Protection Clause of the Federal Constitution by denying an exemption for intercompany receivables to an affiliated group of corporations, otherwise qualified, whose parent is not domiciled in the State of Florida; and

(iii) Whether the circuit court erred in declining to award appellees their costs.

The gravamen of appellant's argument as to the standing issue is that the circuit courts do not retain jurisdiction to review actions taken by the Department of Revenue (DOR) when the parties seeking such review have not complied with the provisions of Chapter 120, Florida Statutes (1975). According to appellant, Section 199.242(1), Florida Statutes (1975), which was cited by appellees in their complaint as the basis for the circuit court's jurisdiction, was impliedly repealed by the Administrative Procedure Act. Appellant cites to Section 3, Chapter 74-310, Laws of Florida, ⁴ a general repealer, as support for the proposition that one of the major purposes of the act was to achieve uniformity in the public's interaction with state agencies. Toward this goal, the act was meant to replace all other provisions dealing with any form of administrative adjudication by a state agency and judicial review thereof.

Appellant concedes that DOR did not fall within the scope of Chapter 120 at one time, due to the constitutional mandate that the circuit courts have exclusive original jurisdiction in all cases involving legality of any tax assessment or toll. However, in 1972, the new Article V to the Florida Constitution was adopted. The provision adopted expressly authorized the legislature to change by general law the circuit courts' exclusive jurisdiction over tax assessments. Article V, Section 20(c)(3), Florida Constitution. It is asserted that the enactment of Chapter 120, Florida Statutes (1975), was a manifestation of the legislature's new constitutional authority.

According to appellant, it is settled law in Florida that the absence of a specific repealer does not prevent a later statute from repealing an earlier one, as the latest expression of the legislature governs. In Walton County v. Board of Public Instruction, 161 So.2d 45 (Fla. 1st DCA 1964), the court articulated the three circumstances under which one law could impliedly repeal an earlier one It is the settled law of this state that in order for a court to declare that one statute impliedly repeals another, it must appear that there is positive repugnancy between the two, or that the last was clearly intended to prescribe the only governing rule, or that it revises the subject matter of the former. (Footnote omitted) 161 So.2d at 46.

Appellant relies on the third of these bases to argue that Section 199.242(1) was impliedly repealed. While DOR concedes that the courts do not favor an implied repealer based on the first two grounds stated above, it contends that as to the third ground, this Court has found a presumption in favor of an implied repealer, where there is a complete and general revision of a subject by the legislature. See Orange City Water Co. v. Town of Orange City, 255 So.2d 257 (Fla.1971); State v. Newell, 85 So.2d 124 (Fla.1956); Brevard County v. Board of Public Instruction, 159 Fla. 869, 33 So.2d 54 (1947); Realty Bond and Share Co. v. Englar, 104 Fla. 329, 143 So. 152 (1932). Appellant concedes that Department of Revenue v. University Square, Inc., 336 So.2d 371 (Fla. 1st DCA 1975), cert. denied, 342 So.2d 1101 (Fla.1977), is contrary to this hypothesis, but dismisses this case as being an aberration from the general principle. It is asserted that the provisions of the Administrative Procedure Act show no intent to retain any provisions in the 1973 statutes regarding administrative determinations by an agency of a party's rights or judicial review of such determinations, after the effective date of the Administrative...