Case Title: Florida Department Of Revenue v. Florida Municipal Power Agency

Citation: 

Docket Number: SC00-1916

State: florida

Court: Florida Supreme Court

Date: 2001-06-28T00:00:00Z

Document:
Supreme 
Court 
of 
Florida
 
____________
No. SC00-1916
____________
FLORIDA DEPARTMENT OF REVENUE,
Petitioner,
vs.
FLORIDA MUNICIPAL POWER AGENCY, et al.,
Respondents.
[June 28, 2001]
SHAW, J.
We have for review a decision of the First District Court of Appeal certifying
the following question to be of great public importance:
Whether section 212.08(6), Florida Statutes, exempts from sales 
taxation those materials purchased by municipally owned utilities for
use in the repair, replacement, or refurbishment of their existing electric
energy transmission or distribution systems?
Florida Mun. Power Agency v. Department of Revenue, 764 So. 2d 914, 918 (Fla.
1st DCA 2000).  We have jurisdiction.  See art. V, § 3(b)(4), Fla. Const.  We
answer the certified question in the affirmative and approve the district court’s
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decision.
I.  FACTS
The relevant facts are set forth in the district court’s opinion:
In 1998, appellants, Florida Municipal Power Agency and
Florida Municipal Electric Association, Inc., filed a petition for a
declaratory statement with the department seeking an interpretation of
section 212.08(6), Florida Statutes, consistent with their position that
the statute exempted from sales taxation those materials purchased by
municipally owned utilities for use in the repair, replacement, or
refurbishment of their existing electric energy transmission or
distribution systems.  In their petition, appellants also sought the
initiation of proceedings to amend rule 12A-1.001(9) of the Florida
Administrative Code to bring it into conformity with their interpretation
of section 212.08(6), Florida Statutes.
In response to the petition, the department issued a final
declaratory statement which rejected appellants’ interpretation of
section 212.08(6) and declined to initiate rule-making proceedings to
amend rule 12A-1.001(9).  The department reasoned that section
212.08(6) as presently written was ambiguous on the issue of whether
sales tax was due from municipally owned utilities on their purchase of
materials used to repair, replace, or refurbish electric transmission or
distribution systems.  After reviewing the legislative history of the
statute, the department concluded that there was no indication that the
legislature had intended to exclude from sales taxation, in the last
amendment to the statute in 1996, purchases by municipally owned
utilities of materials used to repair, replace, or refurbish electric
transmission or distribution systems.
Florida Mun. Power Agency v. Department of Revenue, 764 So. 2d 914, 915-16
(Fla. 1st DCA 2000).  The Florida Municipal Power Agency and Florida Municipal
Electric Association, Inc. (the respondents) appealed the agency’s interpretation to
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the First District Court of Appeal.  The district court, in reversing the order on
review, found that the interpretation of the Department of Revenue (the Department)
is contrary to the plain language of the statute.  The court directed the Department
to initiate rule-making proceedings to amend administrative rule 12A-1.001(9) and
certified the above referenced question to this Court.  The Department argues that
the district court’s “plain meaning” approach to the statute leads to an incorrect
and unreasonable result.
II.  THE APPLICABLE LAW
Generally, municipalities and political subdivisions are exempt from sales tax. 
§ 212.08(6), Fla. Stat. (1997).  From 1971 until 1996, section 212.08(6) provided
that the exemption did not include:
sales, rental, use, consumption, or storage for use in any political
subdivision or municipality in this state of machines and equipment
and parts and accessories therefor used in the generation,
transmission, or distribution of electrical energy by systems owned
and operated by a political subdivision in this state except sales, rental,
use, consumption, or storage for which bonds or revenue certificates
are validated on or before January 1, 1973, for transmission or
distribution expansion. 
§ 212.08(6), Fla. Stat. (1995) (emphasis added).  The Legislature amended section
212.08(6) in 1996 as follows: 
(6) EXEMPTIONS;  POLITICAL SUBDIVISIONS.—There
are also exempt from the tax imposed by this chapter sales made to
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the United States Government, a state, or any county, municipality, or
political subdivision of a state when payment is made directly to the
dealer by the governmental entity.  This exemption shall not inure to
any transaction otherwise taxable under this chapter when payment is
made by a government employee by any means, including, but not
limited to, cash, check, or credit card when that employee is
subsequently reimbursed by the governmental entity.  This exemption
does not include sales of tangible personal property made to
contractors employed either directly or as agents of any such
government or political subdivision thereof when such tangible
personal property goes into or becomes a part of public works owned
by such government or political subdivision thereof, except public
works in progress or for which bonds or revenue certificates have
been validated on or before August 1, 1959.   This exemption does
not include sales, rental, use, consumption, or storage for use in any
political subdivision or municipality in this state of machines and
equipment and parts and accessories therefor used in the generation,
transmission, or distribution of electrical energy by systems owned
and operated by a political subdivision in this state except sales, rental,
use, consumption, or storage for which bonds or revenue certificates
are validated on or before January 1, 1973, for transmission or
distribution expansion.  Likewise exempt are charges for services
rendered by radio and television stations, including line charges, talent
fees, or license fees and charges for films, videotapes, and
transcriptions used in producing radio or television broadcasts.   
 
Ch. 96-397, § 26 at 2488, Laws of Fla.  The Department’s current administrative
rule 12A-1.001(9) interpreting section 212.08 provides in pertinent part:
(9) GOVERNMENTAL UNITS.
(a) All sales made directly to the United States Government, a
state, or any county, municipality, or political subdivision of a state are
exempt, except machines, equipment, parts, and accessories therefor
used in the generation, transmission, or distribution of electricity. . . .
(b) Sales of machines and equipment and parts and accessories
therefor for generation, transmission, or distribution of electrical
1.  Zuckerman v. Alter, 615 So. 2d 661, 663 (Fla. 1993);  see also St.
Petersburg Bank & Trust Co. v. Hamm, 414 So. 2d 1071 (Fla.1982).
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energy by systems owned and operated by a political subdivision or
municipality in this state shall be subject to the tax except sales, rental,
use, consumption, or storage for which bonds or revenue certificates
are validated on or before January 1, 1973, for transmission or
distribution expansion only. See § 212.08(5)(c), F.S.
The Department’s interpretation of a statute which it is charged with enforcing is
entitled to great deference and will not be overturned unless it is clearly erroneous
or contrary to legislative intent.  Donato v. American Tel. & Tel. Co.,  767 So. 2d
1146, 1153 (Fla. 2000). 
Legislative intent must be derived primarily from the words expressed in the
statute.  If the language of the statute is clear and unambiguous, courts enforce the
law according to its terms and there is no need to resort to rules of statutory
construction.1  “Even where a court is convinced that the Legislature really meant
and intended something not expressed in the phraseology of the act, it will not
deem itself authorized to depart from the plain meaning of the language which is
free from ambiguity.”  Forsythe v. Longboat Key Beach Erosion Control Dist., 604
So. 2d 452, 454 (Fla. 1992) (quoting Van Pelt v. Hillard, 78 So. 693, 694-95 (Fla.
1918)).
2.  The act, as it relates to section 212.08, is titled:  “An act relating to
taxation; . . . amending s. 212.08, F.S.; deleting obsolete provisions relating to
exemptions for political subdivisions, tasting beverages, and vessels engaged in
interstate or foreign commerce; . . . .”  Ch. 96-397, title at 2469, Laws of Fla. 
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III. THE PRESENT CASE
The district court held that based on the plain meaning of the statute, the
Legislature clearly extended the general sales tax exemption to include those
materials purchased by municipally owned utilities for use in the repair,
replacement, or refurbishment of their existing transmission or distribution systems. 
We agree with the holding of the First District Court and reject the Department’s
interpretation, which is clearly contrary to the wording of the statute.
The Department asserts that although the wording of the statute may be clear
on its face, it does not, in fact, reflect legislative intent as evidenced by the history
of the statute.  The Department points to the title of the 1996 amendment2 for its
proposition that the Legislature intended merely to strike obsolete language
regarding bonds and revenue certificates; it erroneously and through oversight left
in the last clause “for transmission or distribution expansion,” which  now modifies
the entire provision.  Accordingly, the Department states it is unreasonable to
construe the deletion of obsolete language in a manner that would change the
substantive meaning of the statute.   Moreover, the Department asserts that its
3.  Rollins v. Pizzarelli, 761 So. 2d 294, 299 (Fla. 2000).
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position is bolstered by the history of this provision, which demonstrates the
Legislature’s tendency to eliminate taxing differences between public and private
utility companies; hence it is unreasonable to construe the amendment in a manner
which would expand these taxing differences.  
The Department is in essence requesting this Court to strike the clause “for
transmission and distribution expansion,” despite the fact that the Legislature has
had the opportunity to correct the alleged “clear error” for the past four years and
has not done so.  The Department does not point to any ambiguity in the language
used in the statute itself that would make it subject to two reasonable
interpretations, but relies primarily upon legislative history.  Legislative history
cannot be used to change the plain and clear language of a statute.3  Moreover, as
applied to this case, the drafting error alleged is not merely a clerical and
inconsequential error—it changes the entire meaning of the statute.  This Court
does not have the authority to strike a modifying clause where such a revision
would substantively change the entire meaning of the statute in a manner contrary to
its plain meaning.  Under fundamental principles of separation of powers, courts
cannot judicially alter the wording of statutes where the Legislature clearly has not
4.    Richardson v. Richardson, 766 So. 2d 1036, 1043 (Fla. 2000).
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done so.4  A court’s function is to interpret statutes as they are written and give
effect to each word in the statute.
IV.  CONCLUSION
In conclusion, the statute as written is not ambiguous on its face.  Hence, the
language used is considered sufficient and conclusive evidence of legislative intent. 
As the parties do not allege the legislative enactment violated any constitutional
provision, this Court applies the statute as written.  If the Department is correct that
the Legislature erred in the 1996 amendments, the Legislature is the only branch
with the constitutional authority to correct this alleged error.  Accordingly, this
Court answers the certified question in the affirmative, holding that section
212.08(6), Florida Statutes, entitles the respondents to a sales tax exemption on
those materials purchased by municipally owned utilities for use in the repair,
replacement, or refurbishment of their existing electric energy transmission or
distribution systems.  The district court’s decision is approved.
It is so ordered.
WELLS, C.J., and HARDING, ANSTEAD, PARIENTE, LEWIS and QUINCE,
JJ., concur.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.
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Application for Review of the Decision of the District Court of Appeal - 
Certified Great Public Importance
First District - Case No. 1D99-3770 
Robert A. Butterworth, Attorney General, and Jarrell L. Murchison and James F.
McAuley, Assistant Attorneys General, Tallahassee, Florida,
for Petitioner
Frederick M. Bryant, Tallahassee, Florida,
for Respondent