CITY DRUG COMPANY, ET AL.,
v.
J. M. LEE, AS COMPTROLLER OF THE STATE OF FLORIDA
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City Drug Company challenged the Florida Comptroller's requirement to pay gross sales tax on restaurant and lunch counter receipts operated within drug stores. The Florida Supreme Court affirmed dismissal of the complaint, holding that the allegations failed to establish whether the food operations were separate businesses or mere incidents to the drug business.
The Court affirmed dismissal of the complaint, holding that the allegations were insufficient to establish whether the restaurant/lunch counter operations were separate and distinct businesses or mere incidents to the drug business. To avoid taxation, complainants must show that each business class is of sufficient relative magnitude and importance to warrant separate and distinct operation, and that it is in fact so operated.
“unless each of the two or more classes of business is of such relative magnitude and importance as to warrant the conduct and operation of each to be separate and distinct from the other and is in fact so operated they will be considered as one business to be classified according to the class in which the primary or dominant business falls”
Establishes the legal standard for determining whether multiple business operations in the same location should be taxed separately or as a single unified business based on their relative importance and actual operation.
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Join FLexlaw to unlock all legal intelligenceCity Drug Company and other complainants operated drug stores with lunch counters or restaurants in the same buildings. The Comptroller required them …
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Appeal brings for review final decree dismissing amended bill of complaint.
The purpose of the suit was to enjoin the Comptroller of Florida from requiring complainants to report and pay gross sales tax as provided by Chapter 16848, Acts of 1935, on the receipts accruing from restaurants and lunch counters operated in the same rooms or buildings in which they each respectively also operate a drug store.
The allegations of the bill of complaint are insufficient to show whether the so-called lunch counters or restaurants are each so operated as to be congeneric subdivisions of the retail mercantile business conducted in the involved store and, therefore, a mere incident to the retail drug business and, therefore, falls within the purview of our opinion and judgment in the cases of Liggett Drug Co. v. Lee, 126 Fla. 359, 171 Sou. 326, wherein we held the receipts from a lunch counter or restaurant as there shown to have been operated to be subj ect to the tax and also within the purview of our opinion and judgment in the case of Lee v. Clover*756leaf, 130 Fla. 425, 177 So. 722, in which we held that the sale of cigars and cigarettes as shown to have been conducted in that case was held to be a mere incident to the restaurant business and not to be subject to the tax. Nor are the allegations sufficient to show that the drug business and the restaurant or lunch counter operated by each of the complainants was conducted as separate and distinct business, although conducted in the same building as was shown to be the method of operation of the restaurant and candy store involved in the case of Lee v. Nunnally, 141 Fla. 360, 193 Sou. 51.
It is not only necessary to show that the receipts from each business are kept separate but the rationale of our opinions, supra, is that unless each oí the two or more •classes of business is of such relative magnitude and importance as to warrant the conduct and operation of each to be separate and distinct from the other and is in fact so operated they will be considered as one business to be classified according to the class in which the primary or dominant business falls in so far as the provisions of Chapter 16848 control.
So it is, there was no error in the challenged decree and the decree should be affirmed, but with permission from appellants to apply to the circuit court for leave to amend the bill of complaint if they or any of them be so advised.
So ordered.
Brown, C. J., Whitfield, Terrell, Chapman, Thomas and Adams, J. J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Lee v. Gulf Oil Corp., 148 Fla. 612 (Fla. 1941)…ness, the provisions of c. 16848, supra, should not be applicable to require the payment of the chain store tax. See Lee v. Smith, Richardson Conroy, 141 Fla. 535, 191 So. 767; Lee v. Cloverleaf, Inc.,130 Fla. 435, 177 So. 722; City Drug Co. v. Lee, 146 Fla. 754,1 So. 2d 726. Here, however, the legislature in the 1931 Act, the 1933 Act and the 1935 Act, excepted from the purview of the Act only those filling stations engaged exclusively in the sale of gasoline and other petroleum products. The word "exclusi…
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Walgreen Drug Stores Co. v. LEE, 158 Fla. 260 (Fla. 1946)…t the bill of complaint shows [*262] that the mercantile department and the restaurant department were operated separately and distinctly and were of such magnitude and importance as to justify operation in this manner. City Drug Co. et al., v. Lee, 146 Fla. 754, 1 So. (2nd) 726; Lee v. Nunally, 141 Fla. 360, 193 So. 51. We are convinced that the allegations of the bill are such as to require an affirmative answer to this question. The real question here is whether or not a suit to recover the gross receip…
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City Drug Co. v. LEE, 151 Fla. 18 (Fla. 1942)…[*19] PER CURIAM: This is the second appearance of this case here. See City Drug Co., et al., v. Lee, 146 Fla. 754, 1 Sou. (2nd) 726. It will be noted that in our opinion, supra, we said : “The allegations of the bill of complaint are insufficient to show whether the so-called lunch counters or restaurants are each so operated as to be con-generic subdivision…
Authorities Cited
- Lee v. The Cloverleaf, Inc., 130 Fla. 435 (Fla. 1937)
- Liggett Drug Co. v. Lee, 126 Fla. 359 (Fla. 1936)
- Lee v. The Nunnally Co., 141 Fla. 360 (Fla. 1940)