Harris Corp. v. Department of Revenue

• Citation: 409 So.2d 91
• Decision Date: 18 January 1982
• Docket Number: No. AD-181,AD-181
• Parties: HARRIS CORPORATION, Appellant, v. DEPARTMENT OF REVENUE, Appellee.
• Court: Court of Appeal of Florida (US)

Page 91

409 So.2d 91

HARRIS CORPORATION, Appellant, v. DEPARTMENT OF REVENUE, Appellee.

No. AD-181.

District Court of Appeal of Florida, First District.

Jan. 18, 1982.

Brian C. Ellis, of Fowler, White, Gillen, Boggs, Villareal & Banker, P. A., Tampa, for appellant.

Jim Smith, Atty. Gen., Linda C. Procta, Asst. Atty. Gen., and John Browdy, Asst. Atty. Gen., for appellee.

PER CURIAM.

Harris Corporation appeals pursuant to § 120.68 Fla.Stat. (1979) an order of the Governor and Cabinet as head of the Department of Revenue. We reverse.

The appellant is a manufacturer of electronic equipment. The appellee is attempting to collect sales tax on some of this equipment for the period June 1, 1974, through June 30, 1978. The only issue is the interpretation of the relevant statute of limitations. Section 95.091(3) Fla.Stat. (1979) provides that:

Except as otherwise provided by law, the amount of any tax may be determined and assessed within 3 years after the first day of the month following the date on which the tax becomes due and payable. However, this limitation shall be tolled for a period of 2 years by a request for inspection and examination of a taxpayer's books and records by the taxing authority within that period, in which event the period for which tax due may be determined and assessed shall be the 3 years immediately preceding the first day of the month in which a request for inspection and examination of the books and records has been made by the taxing authority.

In the instant case the Department notified Harris of a proposed audit and requested inspection of Harris' books on January 28, 1977. On June 25, 1979, two years and 5 months later, the Department issued a proposed assessment for the period January 1, 1974, through June 30, 1978, later amending the assessment to be for the period June 1, 1974, through June 30, 1978. Harris contests the assessment for the period June 1, 1974, through May 31, 1976, contending that it is barred by the statute of limitations above.

The Department's application of the statute is clearly expressed in the following excerpt from a Division of Administrative Hearings Recommended Order:

The running of the statute was "tolled" by the issuance of the Department's notice of assessment on January 28, 1977. At that point, 942 days of the three-year limitation period had run. The two-year "tolling" period expired on January 28, 1979, with no action having been taken by the Department. The three-year limitation period therefore resumed on January 29, 1979. The Department issued its notice of proposed assessment on June 25, 1979, after 147 additional days had expired on the three-year "clock." The total period expiring before issuance on the notice of assessment was, therefore, 1,089 days, or less than the three-year limitation period provided for in Section 95.091(3), Florida Statutes.

This would be a reasonable interpretation if the statute did not include the second clause "... in which event the period ... shall be the 3 years immediately preceding...." Recalling maxim that the courts should give effect to all the legislative language, this language requires the Department to make its assessment within 2 years of its request for inspection if it is to take advantage of the tolling provision. Applied to the facts of this case, the Department had until January 29, 1979 in which to assess Harris for the period from January 1, 1974. By failing to file its assessment by that date, the Department could no longer apply the tolling provision. The statutory limitation period reverted to three years as if there had been no tolling of the time. Therefore, when the assessment was made on June 25, 1979, only those taxes due on or after June 1, 1976 were subject to the assessment.

The order is REVERSED and the cause REMANDED for proceedings in accord with this opinion.

BOOTH and THOMPSON, JJ., concur.

ERVIN, J., specially concurs with written opinion.

ERVIN, Judge, specially concurring.

Under the particular circumstances of this case, I concur with the majority's opinion of reversal. Were the statute not one involving a period of limitation, and were the agency not the state's taxing authority, I would feel obliged to follow the general rule stating that an...