Smith v. Florida Dept. of Revenue
| Decision Date | 26 August 1987 |
| Docket Number | No. BP-229,BP-229 |
| Citation | 512 So.2d 1008,12 Fla. L. Weekly 2071 |
| Parties | 12 Fla. L. Weekly 2071 Walter E. SMITH Jr. and Marianna 76 Truck Stop, Inc., Appellants, v. FLORIDA DEPARTMENT OF REVENUE and Jackson County Board of County Commissioners, Appellees. |
| Court | Florida District Court of Appeals |
Joseph C. Jacobs of Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, for appellants.
Frank A. Baker, Marianna, for appellees.
Smith challenges an order upholding Section 336.025, Florida Statutes (1985) (), and a local ordinance imposing such a tax in Jackson County. We affirm.
Smith owns a truck stop adjacent to Interstate 10 in Jackson County. The truck stop employs 115 to 125 employees and derives 90% of its revenue from truckers, selling about seven million gallons of diesel fuel a year. The Board of County Commissioners of Jackson County advertised a public hearing to consider adopting a local ordinance imposing a five cent per gallon local option gas tax. After the hearing, the County Commission adopted the ordinance which imposed the tax commencing September 1, 1986. 1 Smith then filed a declaratory judgment action attacking the constitutionality of the statute authorizing the local option tax (Section 336.025) and the county ordinance imposing the tax.
At trial, which was held on August 8, 1986, Smith testified that his truck stop is in direct competition with other truck stops along Interstate 10 and that his business could not withstand more than a two cent per gallon increase in fuel prices. His witnesses testified that loss in fuel sales would also result in loss of business to the restaurant and garage as well, and would render his business not economically feasible.
The expert testimony presented on behalf of the appellant included testimony that sometimes as little as a 1/2 cent increase in fuel cost at the pump can cause truckers to "move on down the road" causing the business to be no longer economically feasible.
Appellant alleges the statute is: (1) arbitrary and discriminatory because it charges a tax to maintain Jackson County roads and some of the vehicles which purchase the gas do not travel on these roads; (2) arbitrary and discriminatory because it charges this tax only in Jackson County and not statewide; (3) oppressive because the addition of five cents to his fuel prices will force appellant out of business; (4) an unlawful delegation of legislative authority.
The first challenge goes to the classification scheme. Eastern Air Lines, Inc. v. Dept. of Rev., 455 So.2d 311 (Fla.1984). However, the imposition of such taxes must be made on some just and reasonable basis, such as the cost of providing services. James v. Gerrell, 137 Fla. 324, 188 So. 812 (1938). In the instant case appellant has not shown that taxing every person who purchases fuel in the county in which the tax will be spent is not reasonably related to paying for transportation costs in that county. He has not shown how many vehicles pay such tax and do not use county roads. He has only shown that some persons pay that tax on some fuel who use only the interstate, which is presumably not maintained by the county.
The few courts which have overturned an excise or license tax on the basis of an arbitrary or discriminatory classification based the arbitrariness of the classification on the illegitimacy of the purpose of the tax. For example, in O'Connell v. Kontojohn, 131 Fla. 783, 179 So. 802 (1938), the court struck down a license tax which required bakery trucks from outside the city to pay $250 each. The license was based solely on residence of the licensee, and served no legitimate, reasonable purpose. The only purpose for such classification was to discriminate against out-of-city bakeries. It was therefore arbitrary. The court also emphasized that even where the classification is somewhat arbitrary, if the discrimination is not substantial, the statute will stand. In that case, the out-of-city bakeries would go out of business if forced to pay. In the instant case, as discussed infra, Smith has not demonstrated that he will go out of business. See also Olan Mills of Alabama, Inc. v. City of Tallahassee, 43 So.2d 521 (Fla.1949). Neither is the purpose for the tax illegitimate.
The classification is not suspect because it only taxes users in Jackson County. The classification treats all persons buying gas in Jackson County alike. It does not charge an additional tax for nonresidents who purchase gas in Jackson County. In O'Connell and Olan Mills, the tax treated similarly situated persons differently. Here, every one who purchases fuel must pay the tax. Even if it incidentally gives some advantage...
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