SUGAR CANE GROWERS COOPERATIVE OF FLORIDA, A CORPORATION OF FLORIDA, AND FARREL-BIRMINGHAM CO., INC., A CORPORATION OF CONNECTICUT, PETITIONERS,

v.

FLORIDA REVENUE COMMISSION, RESPONDENT

PER CURIAM.

This matter is before the court on the petition of Sugar Cane Growers Cooperative of Florida, a Florida cooperative, and Farrel-Birmingham, a Connecticut corporation, petitioners, for writ of certiorari to quash an order of the Florida Revenue Commission, respondent, making a deficiency levy for sales and use tax under Chapter 212, F.S.A., against said petitioners in the amount of $74,330.14. The respondent paid said amount, and seeks refund under the provisions of the Administrative Procedure Act, § 120.31, F.S.A.

The Cooperative contracted with Farrel-Birmingham on a cost-plus basis for the construction of a sugar mill. Farr el, as contractor, made monthly tax returns on items which it considered taxable, and on items which it considered within the exemption granted by F.S.A. 212.08(4) returns were made every six months on the basis of a maximum tax of $1,000. The question before the court is an interpretation of said § 212.08(4) as enacted by Chapter 57-398, Laws of Florida (1957) ,1 This subsection *395'of the statute is a codification of the previous laws and regulations on this subject.

The contract provides that the “owner (Cooperative) shall purchase from contractor (Farrel) and contractor shall sell to owner all necessary materials, machinery and equipment required for the Glades Sugar House.” The contract then fixes limitations on the contractor in placing subcontracts for such materials, equipment and machinery by giving the owner control of the price that the contractor may pay for such items.

The first part of this contract would seem to be a supplier contract but the second part giving the owner control of what the contractor shall pay for the personal property and what the contractor shall charge the owner for the resale are indications that the contract is not a “single transaction” from a supplier. From this, and the facts that title remained in the Cooperative; that the Cooperative advanced funds to the contractor to pay for anticipated purchases; that possession was delivered by the manufacturer or wholesaler to the Cooperative in care of the contractor; that any discounts, rebates, refunds or other price variables accrued solely to the benefit of the Cooperative; that all items purchased by Farrel were billed to the Cooperative at Farrel’s exact cost; that the Cooperative carried insurance on the items purchased; that the warranties by the supplier to Far-rel were made not to Farrel but direct to the Cooperative; and that in the event of bankruptcy the Cooperative could take possession of all equipment, the project is clearly not a “single transaction” purchased from one supplier.

After the contract was entered into, the parties agreed to additional general provisions which specifically identify the Cooperative as the owner, the buyer as Far-rel and the word “supplier” to mean the person, firm or corporation with whom or with which the order is placed.

Perhaps most important of all, all the original purchase orders issued by Farrel for the job were placed as “agent for Sugar Cane Growers Cooperative of Florida,”" and this procedure continued almost six. months until Farrel instructed the manufacturers to amend all prior orders to show Farrel as a dealer instead of as agent for the owner.

Under these circumstances and in consideration of the fact that the fee paid! to Farrel was for construction of the sugar mill, Farrel was either an independent contractor or an agent of the owner. Farrel doesn’t claim to be an independent contractor because this wouldn’t help him on his tax problem, but he does claim to be a supplier.

A supplier doesn’t review and make recommendations with respect to specifications supplied by the Co-op’s engineer, provide all necessary labor for construction, agree to complete the plant by December 1, provide technical advice for at least three months after the mill had been built, and providing performance bond in the sum of $11,-000,000, in exchange for which the Cooperative agreed to pay a fixed fee to purchase various items of equipment manufactured by Farrel and to advance funds to Farrel on a monthly basis sufficient to cover Farrel’s anticipated expenses in performing the work and furnishing the equipment.'

Clearly, Farrel was merely the agent for the owner and the owner could not claim that the multiple transactions with each of the manufacturers was a “single transaction” within the meaning of the statute. This fact and the rule that an exemption from the payment of a tax must be construed strictly against the exemption dictates the upholding of the Commission. Gay v. Canada Dry Bottling Company of Florida, Inc., Fla.1952, 59 So.2d 788.

In addition to the assessment of additional tax and interest thereon from the time the same was due until paid, the Revenue Commission assessed an additional penalty of 25%, the maximum permitted for late payment under the provisions of § 212.-*39612(2), F.S.A. This penalty amounted to $14,316.12. Such penalty is a discretionary penalty.

The Commission offered to waive such penalty if the petitioner agreed not to seek judicial review of its order assessing the deficiency tax. In view of the fact that the Commission has not by regulation defined the term “supplier,” there was reasonable basis for the interpretation of the applicable statutes used by the petitioner, and no ruling or other regulation which would form a valid basis for the petitioners to believe they were not entitled to the benefits of the exemption, the Commission abused its discretion in assessing such penalty.

This Court has authority to review such penalties under the provisions of the Administrative Procedure Act, Chapter 120, F.S.A. Florida Real Estate Commission v. Rogers, Fla.1965, 176 So.2d 65.

Accordingly, the petition for certiorari is granted. The part of the order of the Commission assessing the deficiency tax and interest thereon is affirmed, and that part of the Commission’s order assessing discretionary penalty in the amount of 25% under the provisions of § 212.12(2), F.S.A., is quashed.

ALLEN, C. J., and SMITH, J., concur.

ANDREWS, J., dissents with opinion.

ANDREWS, Judge

(dissenting).

I regret that I must respectfully dissent from the opinion of the majority in this case.

The first enactment of a sales tax in Florida was in 1949. The provision for exemption of industrial machinery was included in what became a part of F.S.A. § 212.-08, subsection 3, (1949), Sec. 8, Chapter 26319, Laws of Florida (1949).2

A sales tax by its nature is a tax upon the sale of commodities intended to be consumed, often referred to as “soft goods.” To place such a tax upon industrial machinery, generally referred to as “hard goods,” is in effect an ad valorem tax upon^ the construction in Florida of an industrial plant. Such a tax is an economic burden that deters industrial companies from constructing manufacturing facilities within the State, when the same facilities can be constructed in other states and their products sold in Florida free of the burden of such tax.

The exemption initially was set at the maximum $100 of tax with the idea that it would provide statistical information and be a means of checking on the sale of taxable items. It was never intended for the purpose of producing revenue. The legislature in 1951 amended said section to increase the maximum to $300. § 212.08(2), F.S.A. (1951). The next change was in 1957, when this section was amended to provide for $1000 limit on the tax, and added *397the words “single transaction,” and then defined single transaction. § 212.08(4), F.S.A. (1957). The next change was in 1963, which increased the limit of the tax to $5,000. § 212.08(4), F.S.A. (1963).

The effect of these changes is to discriminate against the purchasers of small plants, and to grant exemption to purchasers of large plants, and by increasing the limit of the exemption it has gradually increased the size of the plant to be constructed to which the tax would apply.

“Single transaction” as used in the first sentence of this section of the statute means that the purchase of machinery, equipment, parts and supplies necessary to completely construct a single plant for the mining, quarrying, compounding, processing, producing or manufacturing of personal property for sale in this state or used in furnishing communication, transportation or public utility services is exempt from the sales tax on the cost thereof in excess of $33,333.34.

The use of the words “single transaction” in the second sentence is intended to enlarge, not restrict, the definition of a single transaction as used in the first sentence to include orders placed and accepted for sale, and delivery within six months from one supplier to be used at a particular location of the items upon which the exemption is allowed in the first sentence.

The respondent in an attempt to increase the revenue produced by the sales tax has construed the words “single transaction” as used in the first sentence of said statute to mean a single transaction with one supplier. Such construction is contrary to the meaning of said words in their usual and accepted connotation.

An interpretation of the contract between the parties cannot be used to determine the tax status of the project The tax is on the completed project, and it is immaterial whether the owner contracted with a single contractor for the plant or had some other arrangement that could be construed as supplier, independent contractor or agent. The statute grants a partial exemption to new plants, and a separate and distinct partial exemption of the purchase of parts and supplies necessary to maintain and operate all plants within the state, provided such items constitute a six months supply, and are procured from a single supplier.

It is true that an exemption in a taxing statute should be construed strictly as against the exemption and in favor of the collection of the tax. Gay v. Canada Dry Bottling Company of Florida, Inc., Fla.1952, 59 So.2d 788. Such a rule, however, does not apply here in that the clear, unmistakable, usual definition and construction of the words used in the statute are such as to grant the exemption as a single transaction for the completed construction of industrial plants designed for the production of goods for sale.

The language of the exemption is clear and unambiguous as enacted by the legislature in accordance with rules dictated by accepted grammatical standards of the English language. Neither the respondent nor we have authority to change the meaning of said words. Wagner v. Botts, Fla.1956, 88 So.2d 611; State ex rel. Florida Jai Alai, Inc. v. State Racing Commission, Fla.1959, 112 So.2d 825.

Accordingly, I would grant the petition for certiorari, quash the Order of the Florida Revenue Commission dated November 30, 1964 denying the request for refund of the petitioners, and direct the Commission to refund the tax paid by the petitioners in excess of $1000.00.