~ ~.-"-'.--_.'--_.----'-'-----"-'--'---' ----~-------------_._---_.----;-..--...---_.-.-._...~----"';,;..---~-. ---------~-.-~----,~.; SIJ:'ATE: OF FLORIDA, DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA PBS BUILDING SYSTEMS, INC., Petitioner! vs. DEPARTMENT OF REVENUE, CASE NO. 92-5765 JO~ q3-1~ -FoF FINAL ORDER This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Di~ision of Administrative Hearings in the above-styled case submitted a Recommended Order to the Department, of Revenue. A copy of that Recommended Order is attached hereto. FINDINGS OF FACT The Department hereby adopts and incorporates by reference the findings of facjc set forth in the Recommended Order. CONCLUSIONS OF LAW The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order.
,. Accordingly, IT IS ORDERED: That the Department of Revenue sustains in full the assessments described in the attached Recommended Order against the Petitioner. Any party to this Order has the right to seek judicial review of the Order pursuant to section 120.68, F.S., by the filing of a Notice of Appeal pursuant to Rule 9.110, Florida Rules of Appellate Procedure, with the Clerk of the Department in the Office of General Counsel, Post Office Box 6668, Tallahassee, Florida 32314-6668 and by filing a copy of the Notice,of Appeal accompanied by the applicable filing fees with the appropriate District Court of Appeal. The Notice of Appeal must be filed within 30 days from the date this Order is filed with the Clerk 0YJthe Department. DONE AND ORDERED THIS ;r1--- day of ~, 1'993. --,7/1~-- STATE OF FLORIDA DEPARTMENT OF REVENUE L. EX CERTIFICATE OF FILING I HEREBY CERTIFY that the foregoing Final Order has been filed in the official records of the Department of Revenue, this 215+ day of~ ' 1993.
Copies Furnished to: Robert E. Meale Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee: Florida 32399-1550 Kathryn M. Jaques Arthur Andersen & Co. suite 1600 701 B Street San Diego, Ca 92101-8195 Lisa Raleigh, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Tim Leadbeater Assistant General Counsel Department of Revenue ("'\ Room 204, Carlton Building ',-----,,/ Tallahassee, Florida 32399-0100
STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS PBS BUILDING SYSTEMS, vs. Petitioner, DEPARTMENT OF REVENUE, Respondent. INC., ------------~- RECOMMENDED CASE NO. 92-5765 ORDER Pursuant to noticef final :hearing in the above-styled case was held in Tallaha~see, Florida, on February 11, 1993, before.. Robert E. Meale, Hearing Officer of the Division of l Administrative Hearings. APPEARANCES The parties were represented at the hearing as follows: For Petitioner: For Respondent: no appearance Attorney Lisa Raleigh pepartment of Legal Affairs Tax Section, Capitol Building Tallahassee, FL 32399-1050 STATEMENT OF THE ISSUE The issue in this case is whether Petitioner is liable for corporate income and excise taxes that have been assessed by Respondent. PRELIMINARY STATEMENT On December 19, 1990, Respondent issued a notice of proposed assessment against Petitioner in the amount of $75,734, including interest through September 15, 1990, for unpaid corporate income tax. On the same date, Respondent issued a notice of proposed
assessment against Petitioner in the amount of $11,071, including interest through September 15, 1990, for unpaid corporate excise tax. By letter dated September 16, 1992, Petitioner requested a formal hearing on the proposed assessments. Petitioner failed to appear at the hearing. Respondent called no witnesses,' but offered into evidence eight ex~ibits, which were all admitted. Respondent waived its right to file a proposed recommended order, and no transcript was ordered. ~NDINGS OF FACT' 1. Petitioner i~a subsidiary of PBS Building Systems.J America, Inc. (PBS-A~' PBS-A and Petitioner filed consolidated Florida income and excise tax returns during the time in question. 2. During the years in question, PBS-A had no tax nexus :~ ~J with Florida, but incurred losses that were available to offset gross income. During the years in question, Petitioner had nexus with 'Florida and incurred taxable income. The filing of the consolidated return reduced the taxable income of Petitioner by the losses of PBS-A. 3. On December 19, 1990, Respondent issued two notices of proposed assessment for years ending December 31, 1985, through March 31, 1989. One notice identifies $8273 of unpaid corporate ~ excise tax, plus $2798 of interest through September 15, 1990. The notice states that interest continues to accrue at the daily rate' of $2.27. o 2
~-~ -~--------------- -~- ~---- - ---- -- -- ------~~----- 4. The second notice of proposed assessment identifies ( $55,480 of unpaid corporate income tax, plus $20,254 of interest through September 15, 1990. The notice states that interest continues to accrue at the daily rate of $15.20. 5. Petitioner filed a notice of protest dated February 15, 1991. By notice of decision dated October 17, 1991, Respondent rejected the protest and sustained the proposed deficiencies. The claimed deficiency for unpaid corporate income tax," however, ~ was reduced to $75,039. A"notice of reconsideration dated July 21, 1992, restates the conclusions of the notice of decision. 6. By petitio~ for formal hearing dated September 16, 1992, ~', Petitioner requestep a formal hearing concerning the tax liabilities in question and specifically the conclusion that PBS- A was ineligible to file a consolidated return in Florida due to o the absence of tax nexus with Florida. 7. The September 16 letter recites facts to establish tax nexus with Florida through the establishment of financing relationships. However, it is unnecessary to consider the sufficiency of these factual assertions because they represent mere allegations. Petitioner failed to produce any evidence in the case and, when noticed for a corporate deposition, failed to appear. Additionally, Petitioner1s failure to respond to requests for admission results in admissions that, during the relevant period, PBS-A was not a bank, brokerage house, or finance corporation and did not lend money to Petitioner. CONCLUSIONS OF LAW 3
C 8. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties. sections 120.57(1 and 120.575(2, Florida Statutes. (All references to sections are to Florida Statutes. 9. Under section 120.575(2, the burden on Respondent is to show that "an assessment has been made against the taxpayer and the factual and legal grounds.. [of] the assessment. II 10. Respondent has shown that two assessments have been made against Petitioner. The assessment for unpaid corporate excise tax is for $11,071; rlus interest at the daily rate of $2.27 from September 16, 1990. The assessment for unpaid ~; corporate income tax is for $75,039, plus interest at the daily rate of $15.20 from September 16, 1990. ( 11. Respondent'has also made a prima facie showing of the factual and legal grounds for deconsolidating the returns of Petitioner from those of its parent, PBS-A. RECOMI1ENDATION -Based on the foregoing, it is hereby RECOMMENDED that the Department of Revenue enter a final order sustaining the above-described assessments against Petitioner. ENTERED on February 12, 19~rida. (J 4 t ZJDiIJii;U:;il.iiMiWUCJ,CmueW1S.., AatsaxniJA4:OUI. u ikaaaaa4 q H4JiOi.
C COPIES FURNISHED: Filed with the Clerk of the Division of Administrative Hearings on February 12, 1993. Dr. James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, FL 32399-0100 '-- Attorney Lisa Ralei~ Department of Legal:;Affairs Tax section, capito~ Building Tallahassee, FL 32399-1050 o Kathryn M. Jaques Arthur Andersen & Co. suite 1600 701 B Street San Diego, CA 92101-8195 o 5