Rutledge v. Chandler, 64460
| Decision Date | 06 December 1983 |
| Docket Number | No. 64460,64460 |
| Citation | 445 So.2d 1007 |
| Parties | Gary RUTLEDGE, et al., Appellants, v. Herbert W. CHANDLER, et al., Appellees. . Order |
| Court | Florida Supreme Court |
Harold F.X. Purnell, General Counsel, Dept. of Business Regulation, Tallahassee, for appellants.
Thomas F. Woods of Woods & Carlson, Tallahassee, for appellees.
Mark Herron, Laurel D. Landry and Sandra M. Anderson, Tallahassee, for The Florida House of Representatives, Representative H. Lee Moffitt and Representative Barry Kutun, amicus curiae.
Arnold D. Levine and George H. Sheldon of Levine, Freedman, Hirsch & Levinson, Tampa, for The Florida Restaurant Ass'n, Inc., amicus curiae.
Wilbur E. Brewton of Taylor, Brion, Buker & Greene, Tallahassee, for The Wine Industry of Florida, Inc., amicus curiae.
This appeal is before the Court pursuant to the certification of the District Court of Appeal, First District, that the amended order of the trial court declaring Section 17, Chapter 83-349, Laws of Florida, unconstitutional was of great public importance throughout the state and required immediate resolution by this Court.
We accepted jurisdiction, and after hearing oral argument, we hold that the statute is constitutional. The order of the trial court is reversed, and the permanent injunction against the appellants is hereby vacated effective immediately.
An opinion explaining our rationale will be filed at a later date.
It is so ordered.
This case is an appeal from a final order of a trial court, certified by the First District Court of Appeal as requiring immediate resolution by this Court. We have jurisdiction pursuant to article V, section 3(b)(5) of the Florida Constitution.
During its July 1983 special session, the legislature increased state alcoholic beverage taxes. Ch. 83-349, Laws of Fla. The higher tax rates took effect September 1, 1983, to be paid by Florida alcoholic beverage distributors on sale of such products to licensed Florida retailers. The tax rate was based on gallonage and type of beverage. Section 17 of chapter 83-349 1 levied a "floor tax" on Florida retailers, taxing all alcoholic beverages in retail inventory on the September 1 effective date to ensure that all alcoholic beverages sold by retailers after the effective date bore the same tax rate. The section 17 tax mirrored the rest of the chapter regarding tax rate, gallonage, and type of beverage and was designed to prevent avoidance of the tax by stockpiling before September 1, and also to prevent a potential windfall for any retailer who might sell pre-September inventory at post-September prices.
On August 12, 1983, the appellees filed a complaint in circuit court in Leon County, challenging the constitutionality of section 17 on the ground that the state was imposing an ad valorem tax in violation of article VII, section 1(a) of the Florida Constitution. 2 The circuit judge issued a temporary injunction enjoining the Division of Alcoholic Beverages and Tobacco (Division) from collecting the section 17 tax. The order also required liquor retailers to file the required inventory report but enjoined payment of the tax. The Division filed an interlocutory appeal in the First District Court of Appeal, effectively staying the circuit court order, but the circuit court vacated the stay on September 1.
The circuit court entered an amended final order and permanent injunction September 22 holding the section 17 tax to be an unconstitutional ad valorem tax. The appellants sought immediate supreme court review by certification because the Division was unable to deposit 13,700 checks, totalling $1.3 million, submitted by Florida retailers despite the injunctive relief, and because, should section 17 be found valid, the Division needed to act quickly to collect the tax from the approximately 350 Florida retailers who go out of business each month. After oral argument on December 6, 1983, the Court issued an order holding the statute constitutional, reversing the trial court order and vacating the permanent injunction immediately. Rutledge v. Chandler, No. 64,460, --- So.2d ---- (Fla. Dec. 6, 1983). We stated then that this opinion would follow.
This Court has delineated the difference between ad valorem and excise taxes in City of DeLand v. Florida Public Service Commission, 119 Fla. 804, 813, 161 So. 735, 738 (1935):
All taxes, other than polls, are either direct or indirect property taxes. A direct tax is one that is imposed directly upon property, according to its value. It is generally spoken of as a property tax or an ad valorem tax. An indirect tax is a tax upon some right or privilege, or corporate franchise, and is most often called an excise or occupational tax.
An excise and a property tax, when the two approach each other, ordinarily may be distinguished by the respective methods adopted for laying them and fixing their amounts. If a tax is imposed directly by the Legislature without assessment, and its sum is measured by the amount of business done, income previously received, or by the extent to which a taxable privilege may have been enjoyed or exercised by the taxpayer, irrespective of the nature or value of such taxpayer's assets or his investments in business, it is to be regarded as an excise tax. But if the tax is computed upon the valuation of the property, and assessed by assessors, either where it is situated or at the owner's domicile, although privileges may be included in the valuation, it is considered a property tax.
The legislature defines an ad valorem tax as "a tax based upon the assessed value of property." § 192.001(1), Fla.Stat. (1981).
Under City of DeLand and section 192.001(1), section 17's floor tax is not a property tax because it is not levied on value assessed by assessors. Section 17 also affirmatively satisfies the criteria for an excise tax. It is imposed directly by the legislature, without assessment, and is based on the exercise of a privilege: the possession of alcoholic beverage for retail sale. The exercise of this privilege is measured by the amount of alcoholic beverages in inventory on September 1, 1983. In the past, this Court has found a tax on a privilege, measured by inventory, to be an excise tax. Smith v. City of Miami, 160 Fla. 306, 34 So.2d 544 (1948) (); Jerome H. Sheip Co. v. Amos, 100 Fla. 863, 130 So. 699 (1930) ().
While the specific issue now before us may be a case of first impression in Florida, courts in other jurisdictions have found floor taxes legally indistinguishable from the one at issue here to be an excise tax. See, e.g., Herman v. Mayor of Baltimore, 189 Md. 191, 55 A.2d 491 (1947) (...
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Campus Communications, Inc. v. Department of Revenue, State of Fla.
...is an excise tax. An excise tax is "an indirect tax levied somewhere in the chain of manufacture and distribution." Rutledge v. Chandler, 445 So.2d 1007, 1009 (Fla.1984). An excise tax is a tax on the exercise of a privilege. City of DeLand v. Florida Public Service Commission, 119 Fla. 804......
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Metropolitan Dade County v. Golden Nugget Group
...Florida Supreme Court has more recently had occasion to delineate the difference between ad valorem and excise taxes. In Rutledge v. Chandler, 445 So.2d 1007 (Fla.1984), the court reaffirmed the test articulated in City of DeLand v. Florida Public Service Company, 119 Fla. 804, 813, 161 So.......
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State Dept. of Business Regulation, Div. of Alcoholic Beverages and Tobacco v. Florida Restaurant Ass'n, 84-205
...the increased tax otherwise would not have been payable. In discussing chapter 83-349, the Florida Supreme Court in Rutledge v. Chandler, 445 So.2d 1007, 1009 (Fla.1984), Section 17 of chapter 83-349 levied a "floor tax" on Florida retailers, taxing all alcoholic beverages in retail invento......