VMOB, LLC v. Dep't of Revenue
| Decision Date | 19 February 2020 |
| Docket Number | Case No. 2D18-2723 |
| Citation | 292 So.3d 23 |
| Parties | VMOB, LLC d/b/a Cheap on Howard and Verna Bartlett, Appellants, v. DEPARTMENT OF REVENUE, Appellee. |
| Court | Florida District Court of Appeals |
W. Bart Meacham, Tampa, for Appellants.
Ashley Moody, Attorney General, and Mark S. Urban, Assistant Attorney General, Tallahassee, for Appellee.
This appeal arises from a Tampa business's failure to make sales tax payments to the Department of Revenue as required by chapter 212, Florida Statutes (2015). VMOB, LLC d/b/a Cheap on Howard and Verna Bartlett challenge a final agency order revoking VMOB's certificate of registration, sustaining jeopardy findings and notices of final assessment, and sustaining a personal liability assessment against Ms. Bartlett in the amount of $81,060.04. We affirm the final order without comment insofar as it revoked VMOB's certificate of registration and sustained the Department's jeopardy findings and assessment notices. We reverse the final order insofar as it sustains the personal liability assessment, however, because the amount sustained exceeds the amount allowable under the governing statute.
Section 213.29, Florida Statutes (2015), authorizes a penalty—which the Department calls a personal liability assessment—against certain corporate officers or directors who assist a corporation in evading or defeating payment of certain taxes, including sales taxes under chapter 212. The statute provides that:
Any person who is required to collect, truthfully account for, and pay over any tax enumerated in chapter 201, chapter 206, or chapter 212 and who willfully fails to collect such tax or truthfully account for and pay over such tax or willfully attempts in any manner to evade or defeat such tax or the payment thereof; or any officer or director of a corporation who has administrative control over the collection and payment of such tax and who willfully directs any employee of the corporation to fail to collect or pay over, evade, defeat, or truthfully account for such tax shall, in addition to other penalties provided by law, be liable to a penalty equal to twice the total amount of the tax evaded or not accounted for or paid over. The filing of a protest based upon doubt as to liability or collection of a tax shall not be determined to be an attempt to evade tax under this section. The penalty imposed hereunder shall be in addition to any other penalty imposed or that should have been imposed under the revenue laws of this state, but shall be abated to the extent that the tax is paid. Any penalty may be compromised by the executive director of the Department of Revenue as set forth in s. 213.21. An assessment of penalty made pursuant to this section shall be deemed prima facie correct in any judicial or quasi-judicial proceeding brought to collect this penalty.
§ 213.29 (emphasis added). In sum, and as relevant here, the statute provides for a penalty (1) against any officer or director of a corporation with administrative control over the collection and payment of sales taxes who willfully directs any employee to fail to collect or pay over or to evade, defeat, or account for sales taxes; (2) in an amount equal to twice the amount of the tax; and (3) that is to be "abated to the extent that the tax is paid."
On January 9, 2017, the Department issued a notice of personal liability assessment against Ms. Bartlett in which it stated, consistent with section 213.29, that she was "a corporate officer or director with administrative control" over VMOB's payment of sale and use tax and that she had engaged in prohibited conduct for which a penalty could be imposed under section 213.29. The notice identified tax payments that were due but not made on dates between July 1, 2015 and October 31, 2016 and stated that the total amount of those unpaid taxes was $40,530.02, resulting in a penalty for which Ms. Bartlett was personally liable of $81,060.04—double the amount of those taxes. The notice informed Ms. Bartlett of her right to request a hearing, which she exercised.
Ms. Bartlett's request for a hearing, together with certain other matters with which it was consolidated, was referred to the Department of Administrative Hearings (DOAH). While the matter was pending at DOAH, VMOB paid substantially all of the outstanding taxes that were the subject of the personal liability assessment. By the time the matter went to a hearing before an administrative law judge (ALJ), only $8790.56 of the original total of $40,530.02 in unpaid tax was outstanding. In addition to disputing other aspects of the Department's case, Ms. Bartlett argued that the penalty the Department assessed could not exceed $17,581.12—double the $8790.56 not yet paid by VMOB.
The ALJ held an evidentiary hearing during which two witnesses testified and several documents were received into evidence. The ALJ issued a recommended order in which it found (1) that "Ms. Bartlett had administrative control over VMOB and was personally responsible for collecting VMOB's sales tax and remitting it to the Department," (2) that Ms. Bartlett willfully failed to submit a payment with respect to some sales taxes and willfully submitted worthless checks on behalf of VMOB for others, and (3) that the amount of the unpaid tax was $40,530.02. The ALJ concluded that the imposition of a penalty of double the amount of the unpaid tax was proper, rejected Ms. Bartlett's argument that the penalty could not exceed $17,581.12, and recommended that the Department enter a final order imposing a personal liability assessment against Ms. Bartlett in the amount of $81,060.04—double the $40,530.02 amount that was not paid when due and that was identified in the Department's notice.
VMOB and Ms. Bartlett filed exceptions to the recommended order which stated, as relevant here, that the ALJ erred in determining the amount of the personal liability assessment against Ms. Bartlett because VMOB substantially paid the taxes that were the subject of the personal liability assessment. The Department rejected that exception and rendered a final order in which it adopted the ALJ's findings of fact and conclusions of law and sustained the imposition of a $81,060.04 personal liability assessment against Ms. Bartlett. We now have a timely appeal from that order.
Ms. Bartlett does not raise any appellate issue with respect to the factual findings underlying the final order as it pertains to the personal liability assessment. Nor does she challenge the final order's determination that a personal liability assessment against her is legally proper.1 The only issue with respect to the personal liability assessment she raises is whether the Department erred by sustaining an assessment that exceeds the amount allowable under section 213.29. Based on the unambiguous language of that statute, we agree with Ms. Bartlett—at least in part.
We are presented with a question of statutory construction—whether section 213.29 allows the Department to sustain a penalty against Ms. Bartlett in the amount it did here.2 The rules we apply to answer that question are familiar. We begin with the text of the statute we are called upon to interpret, see Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362, 367 (Fla. 2013), and we give statutory terms their ordinary meaning unless the legislature has defined them or the context indicates that they have a specialized or technical meaning, see State v. Kwitowski, 250 So. 3d 210, 214-15 (Fla. 2d DCA 2018). If the statute is not ambiguous, its unambiguous meaning is dispositive and resolves the case. See Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984). If the statute is ambiguous in the sense that a reasonable person could understand it as meaning two or more different things, however, we turn to other aids to construction. See English v. State, 191 So. 3d 448, 450 (Fla. 2016) ; Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992).
The parties have not directed us to any precedents interpreting section 213.29 in circumstances where, as here, the delinquent taxes have been repaid in whole or part after a penalty has been assessed, and we have found none ourselves. The relevant statutory language and its application to this case is, however, quite straightforward.
The Department's legal conclusion that section 213.29 authorizes a penalty of $81,061.04—double the amount of VMOB's outstanding taxes at the time of the notice of personal liability assessment was issued—falters on the statute's unambiguous command that a penalty assessed pursuant to the statute "shall be abated to the extent that the tax is paid." When talking about a monetary liability like a penalty as section 213.29 does, to say that the liability shall be abated is commonly understood as saying that it shall be reduced or eliminated to some extent. See Abate , Merriam-Webster.com, https://www.merriam-webster.com/dictionary/abate (last visited Jan. 4, 2020) (defining "abate" to mean, inter alia, "to reduce in value or amount," "to make less," and "deduct, omit"); Abatement , Black's Law Dictionary (10th ed. 2009) (defining abate to mean, inter alia, "the act of lessening or moderating; diminution in amount or degree"); cf. In re Estate of Potter, 469 So. 2d 957, 959 (Fla. 4th DCA 1985) (). And the statutory phrase "to the extent that" is the rough equivalent of saying "insofar as" or "to the degree that." See Extent , Merriam-Webster.com, https://www.merriam-webster.com/dictionary/extent (last visited Jan. 7, 2020) (defining "extent" to mean, inter alia "the point, degree, or limit to which something extends"). To say, for example, that one's mortgage debt will be abated to the extent of his or her payments is to say that the debt will be reduced by the amount in which it is paid. Cf....
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