NATIONAL BRANDS TIRE COMPANY, INC., A FLORIDA CORPORATION, APPELLANT,
v.
DEPARTMENT OF REVENUE, CONSISTING OF REUBIN O'D. ASKEW, A GOVERNOR OF FLORIDA, AND SECRETARY OF STATE OF FLORIDA, THE ATTORNEY GENERAL OF FLORIDA, THE COMPTROLLER OF FLORIDA, THE TREASURER OF FLORIDA, THE COMMISSIONER OF EDUCATION, AND HARRY L. COE, JR., EXECUTIVE DIRECTOR OF THE STATE OF FLORIDA, DEPARTMENT OF REVENUE, APPELLEES
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National Brands Tire Company appealed a declaratory judgment interpreting Florida's sales tax bad debt credit statute. The court affirmed that a taxpayer may claim a credit only in the single period in which both the debt is found worthless AND charged off for federal income tax purposes, not in separate periods.
The statute requires that the credit be claimed only in the single period in which both events occurred—when the debt is found worthless AND charged off for federal income tax purposes during that same period. A taxpayer cannot claim the credit based on facts occurring in different periods.
[1] A taxpayer may claim a credit for sales tax paid on worthless accounts only in the tax period during which the accounts are both found to be worthless and actually charge…
[2] Statutory exceptions to general tax laws, such as credits for worthless accounts, are construed strictly against the taxpayer and in favor of the taxing authority.
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“it seems clear that the expression 'which during the period covered by the current return' modifies and applies to both of the clauses which follow it”
The court's grammatical analysis establishing that both conditions (finding worthless and charging off) must occur in the same period.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceNational Brands attempted to claim sales tax credits for accounts it had found worthless during the periods covered by its tax returns, but which had …
The full statement of facts, procedural history, and disposition for this case are member content.
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SCHWARTZ, Judge.
The taxpayer appeals from a declaratory judgment interpreting Section 212.17(3), Florida Statutes (1967),1 as it applied to stipulated facts. We affirm.
At the time of the events, involved in this case,2 the statute provided:
A dealer who has paid the tax imposed by this chapter on tangible personal property may take credit in any return filed under the provisions of this chapter for the tax paid by him on the unpaid balance due on accounts which during the period covered by the current return have been found to be worthless and are actually charged off for federal income tax purposes; provided, that if any accounts so charged off are thereafter in whole or in part paid to the dealer, the amount so paid shall be included in the first return filed after such collection and the tax paid accordingly, [e. s.]
The appellant attempted to claim credits under this provision for accounts which it had “found to be worthless” during the periods covered by the returns in which the claims were made, but which had been “actually charged off for federal income tax purposes” in prior periods. The trial judge, however, agreed with the position of the Department of Revenue that the statute required that the credit be claimed only in a single period in which both events occurred. So do we.
Purely as a matter of the rules of grammar, see Florida State Racing Commission v. Bourquardez, 42 So. 2d 87 (Fla.1949); 30 Fla.Jur. Statutes § 93 (1974), it seems clear that the expression “which during the period covered by the current return” modifies and applies to both of the clauses which follow it. If the appellant’s contention were correct, the statute would have instead provided that a credit may be taken for “amounts which have been found to be worthless during the period covered by the current return and are actually charged off for federal income tax purposes.” Furthermore, we agree with the department that National Brands’ view would permit a taxpayer to write a bad debt off for federal income tax purposes and then claim the sales tax credit at any subsequent time — no matter how long afterwards — it chose. This reading of the statute would render its timing provisions meaningless and superfluous, and is therefore not an acceptable one. See 30 Fla.Jur. Statutes § 118 (1974), and cases cited.
Finally, the appellant has, at most, raised an ambiguity in the language employed by the legislature. But it is established that Section 212.17(3), Florida Statutes (1967), provides only for a credit upon an otherwise existing tax obligation and thus constitutes an exception to the general sales tax law. Estate of W.T. Grant Co. v. Lewis, 358 So. 2d 76 (Fla. 1st DCA 1978), aff’d., 370 So. 2d 764 (Fla.1979). It is therefore essentially an embodiment of legislative grace3 which must be strictly construed against the taxpayer and in favor of the taxing authority. State ex rel. Szabo Food Services, Inc. of North Carolina v. Dickinson, 286 So. 2d 529 (Fla.1973); United States Gypsum Co. v. Green, 110 So. 2d 409 (Fla.1959); State ex rel. Wedgworth Farms, Inc. v. Thompson, 101 So. 2d 381 (Fla.1958). The application of this rule to the issue before us renders the propriety of the construction adopted below all the more certain.
Affirmed.
. The provision was significantly amended by Chapter 78-23, § 1, Laws of Fla. (effective May 8, 1978).
. Ibid.
. See State ex rel. Brunswick Corp. v. Kirk, 204 So. 2d 4 (Fla.1967), which held that there was no right to a sales tax refund as to repossessed property, without a statutory provision to that effect. The holding in Kirk apparently inspired the enactment of § 212.17(3).
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Causeway Lumber Co., Inc. v. Lewis, 410 So. 2d 511 (Fla. 4th DCA 1981)…by the presumption that the legislature, by amending a statute, intends it to have a meaning different from that accorded it before the amendment. See Reino v. State, 352 So. 2d 853 (Fla.1977). In National Brands Tire Co. v. Department of Revenue, 383 So. 2d 257 (Fla. 3d DCA), petition for review denied, 388 So. 2d 1116 (Fla.1980), our sister court analyzed the pre-amendment version of Section 212.- [*513] 17(3). There the court characterized the statute as “an embodiment of legislative grace which must be…
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State v. Kemper Invs. Life Ins. Co., 660 So. 2d 1124 (Fla. 1st DCA 1995)…ss, economic, or other activity of the taxpayer that generated the tax liability in the first instance. This factor alone distinguishes this case from authorities relied upon by the Department. In National Brands Tire Co., Inc., v. Dept. of Revenue, 383 So. 2d 257 (Fla. 3d DCA 1980), a taxpayer was denied credit against sales tax which it attempted to take for tax paid on worthless accounts charged off for federal income tax purposes in prior years, where the statute provided that such credit could be taken o…
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Dep't OF Revenue v. Mobile Home Indus., Inc., 463 So. 2d 1160 (Fla. 1st DCA 1984)…refund for the amount of sales tax attributable to the unpaid balance of the sale.4 The Legislature is not required to allow a credit or refund under the circumstance, but has seen fit to do so. National Brands Tire Company v. Department of Revenue, 383 So. 2d 257 (Fla. 3d DCA 1980). Further, the Legislature has determined that the dealer, rather than the initial purchaser or the financing agency, is entitled to apply for the credit or refund.5 Little purpose is served, therefore, by appellant’s argument that…
Authorities Cited
- State v. Dickinson, 286 So. 2d 529 (Fla. 1973)
- Est. of W. T. Grant Co. (Bankrupt) v. Lewis, 370 So. 2d 764 (Fla. 1979)
- State ex rel. Wedgworth Farms, Inc. v. Ina S. Thompson, 101 So. 2d 381 (Fla. 1958)
- Fla. State Racing Comm'n v. Bourquardez, 42 So.2d 87 (Fla. 1949)
- United States Gypsum Co. v. Green, 110 So. 2d 409 (Fla. 1959)
- Est. of W. T. Grant Co. (Bankrupt) v. Lewis, 358 So. 2d 76 (Fla. 1st DCA 1978)
- State of Fla. ex rel. Brunswick Corp. v. Kirk, 204 So. 2d 4 (Fla. 1967)