VERIZON BUSINESS PURCHASING, LLC , Appellant,

v. STATE OF FLORIDA, DEPARTMENT OF REVENUE, A STATE AGENCY , Appellee

. IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED CASE NO. 1D 14

- 3213

_____________________________/ Opinion filed June 11, 2015. An appeal from the Circuit Court for Leon County

. Kevin J. Carroll , Judge

. Katherine E. Giddings and Kristen E. Fiore of Akerman LLP, Tallahassee; Michael J. Bowen and Peter O. Larsen of Akerman LLP, Jacksonville , for Appellant. Pamela Jo Bondi, Attorney General, and J. Clifton Cox, Special Counsel, Tallahassee , for Appellee.

LEWIS, C.J

. Appellant, Verizon Business Purchasing, LLC, appeals the trial court’ s Final Judgment entered in favor of Appellee, the Florida Department of Revenue2 (“Department ” ), and argues that the No tice of Proposed Assessment issued to it by the De partment was not the final assessment contemplated in the p ertinent statute of limitations. For the following reasons, we agree with Appellant and reverse the Final Judgment. As set forth by the trial court, the Department notified Appellant in January 2007 that it was going to audit the monthly sales tax returns that Appellant had filed for the preceding three

- year period, January 2004 through December 2006. The audit was commenced and, f or various reasons, the parties entered into a series of agreements extending the statute of limitations time period within which the Department could issue an assessment. 1 The final extension agreement was entered into in August 2010 and provided that th e new statute of li mitations date for issuance of the tax assessment would be March 31, 2011. On February 8, 2011, the Department issued to Appellant a Notice of Proposed Assessment (“NOPA” ), which “identifie[d] the [tax] deficiency ” for the three

- year pe riod at issue. The balance due from Appellant was $3,169,168.74 , plus interest. Appellant was informed that if it did not agree with the “proposed assessment,” it could request a review through an

1 Section 95. 091(3)(a)1.b., Florida Statutes (2010), the statute of limitations at issue, provides in part that “the Department . . . may determine and assess the amount of any tax, penalty, or interest due under any tax enumerated in s. 72.011, which it has authority to administer” “within 3 years after the date the tax is due, any return with respect to the tax is due, or such return is filed, whichever occur s later.” (Emphasis added).3 informal protest, an administrative hearing, or a judicia l proceeding. Appellant had until April 11, 2011, to file an informal written protest. If Appellant did not file a protest , “the proposed assessment [would] become a FINAL ASSESSMENT on 04/11/2011.” The NOPA further set forth, “If you request an administrative hearing

or judicial proceeding, you must file your request no later than 06/08/2011 or 60 days from the date the ass essment becomes a Final Assessment.” I f Appellant agreed with the “proposed assessment,” it could pay the balance due within sixty days from the “Notice date” by returning its paymen t in the enclosed envelope along with the “NOPA remittance coupon.”
In September 2011, Appellant filed an amended complaint against the Department. In Count One, Appellant challenged the NOPA on statute of limitations grounds. It contended that the “sales and use tax liability asserted in the NOPA did not become an assessm ent until April 11, 2011,” that the Department was required to issue any assessment with respect to the audit period at issue prior to March 31, 2011, and that, as a result, the “Assessment is invalid in its entirety and must be abated.” As an affirmative defense, the Department argued that Count One failed to state a cause of action because the NOPA was a legal assessment as a matter of law for purposes of the statute of limitations. Both parties subsequently moved for summary judgment. In the Order Den ying Plaintiff’s Motion for Summary Judgment and Granting4 Defendant’s Motion for Summary Judgment, the trial court determined that the NOPA constituted an assessment for purposes of section 95.091(3)(a). In support of its determination, the trial court ci ted our decision in Florida Export Tobacco Co., Inc. v. Department of Revenue , 510 So. 2d 936 (Fla . 1st DCA 1987), which, according to the trial court, held that an assessment for purposes of chapter 212, Florida Statutes, occurs whenever the Department communicates the amount of taxes claimed to be due and makes a demand for the taxpayer to make payment. The trial court also noted that Florida Ad ministrative Code Rule 12

- 6.003 refers to a
NOPA as an assessment , and it reasoned that at the time the Department issues a NOPA, it has completed its work on the audit and has fixed the amount of additional tax due. The trial court rejected Appellant’s a rgument that section 213.21(1)(b), Florida Statutes, which provides for a tolling of the statute of limitations period for the issuance of final tax assessments when informal protest procedures are sought, establishes that the assessment contemplated in se ction 95.091 (3) (a ) is a final

assessment. The trial court alternatively determined that even if the NOPA was not an assessment, only the first month of the audit period would be untimely because each month of “the taxing p eriods in the audit period” was e xtended. In other words, the “new statute of limitations date for issuance of an assessment for the first month of the audit pe riod, January 2004, was extended by the final Extension Agreement to March 31, 2011” and the “[t]he second month of the audit pe riod, February 2004,5 was extended to April 30, 2011, and through all 36 months of the audit period.” Thereafter, the trial court entered a Partial Final Judgment in the Department’s favor as to Count One of the amended complaint, Appellant voluntarily dismissed the other two counts of its amended compla int, and the Final Judgment was entered. This appeal followed. Summary judgment is proper when there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter o f law. Volusia Cnty. v. Aberde en at Ormo nd Beach, L.P. , 760 So. 2d 126, 130 (Fla. 2000). Summary judgment is reviewed de novo. Id. Statutory construction is also a question of law subject to de novo review. W. Fla. Reg’l Med. Ctr., Inc. v. See , 79 So. 3d 1, 8 (Fla. 2012). The polestar of statutory construction is legislative intent. Id. at 8

- 9. To discern legislative intent, a court must look first to the plain and obvious meaning of the statute’s text, which may be discerned from a dictionary. Id. at 9. If the language of the statute is clear and unambiguous and conveys a clear and definite meaning, a court must apply the unequivocal meaning and not resort to the rules of statutory construction. Id. If, however, an ambiguity exists, a court shou ld look to the rules of statutory construction to help interpret legislative intent, which includes the examination of a statute’s legislative history and the purpose behind its

enactment. Id. Statutes imposing taxes and penalties must be strictly constr ued against the taxing authority and any ambiguity in the provision of a tax statute must6 be resolved in the taxpayer’s favor. Philip C. Owen, Chartered v. Dep’t of Revenue , 597 So. 2d 380, 380 (Fla. 1st DCA 1992). As we explained, section 95.091(3)(a) 1.b., Florida Statutes (2010), provides that the Department may “determine and assess the amount of any tax, penalty, or interest due under any tax enumerated in s. 72.011” “within 3 years after the date the tax is due, any return with respect to the tax i s due, or such return is filed, whichever occurs later.” (Emphasis added). This case presents the issue of wh ether the Department timely assessed Appellant for purposes of the statut e of limitations when it issued the NOPA within the agreed

- upon extended statute of limita tions period. Appellant contends that the Department’s proposed tax assessment did not constitute the assessment contemplated in section 95.091(3)(a) and that it is the date upon which a proposed assessment becomes final that must be used to ascertain whether an assessment is timely. The Department argues that the proposed assessment was the pertinent assessment for purposes of the statute of limitations. As the parties acknowledge, section 95.091 does not define the word “assess.” In support of its argument, the Department relies upon section 72.011, Florida
Statutes (2010) , which addresses in part the jurisdiction of circuit courts in specific

tax matters. Section 72.011 (1)(a) provides that a “taxpayer may contest the legality of any assessment or denial of refund of tax . . . by filing an action in circuit court; or, alternatively, the taxpayer may file a petition under the applicable provisions of7 chapter 120.” Section 72.011(2)(a) provides in part that “[a]n action may not be brought to contest an assessment of any tax, interest, or penalty assessed under a section or chapter specified in subsection (1) more than 60 days after the date the assessment becomes final.” T he date upon which “an assessment . . . becomes final and procedures by which a taxpayer must be notified of the assessment . . . must be established: [b]y rule adopted by the Department . . . .” § 72.011(2)(b)1., Fla. Stat. (2010). In accordance with th e statute, Florida Administrative Code R ule 12

- 6.003 (2010) , which is entitled “Protest of Notices of Proposed Assessment Issued by the Department Which Result From an Audit,” provides in part how a taxpayer “may secure review of a Notice of Proposed Asses sment (Ass essment).” Subsection (1)(c) of the rule provides that the “Assessment becomes final for purposes of Chapter 72, F.S., upon the expiration of 60 consecutive calendar days . . . after the date of issuance on the Assessment . . . .” As the Depa rtment contends, section 72.011(2)(a) supports its position th at the Legislature contemplated both non

- final and final tax assessments. Although the word “non

- final” was not used in the statute, the implication is clear by virtue of the Legislature’s use of the langua ge “assessment becomes final.” Nevertheless, we find that neither the language of section 72.011 nor rule 12

- 6.003 settles the specific matter at hand of whether the assessment contemplated in section 95.091(3)(a) is a final assessment.8 As did the t rial court, the Department also relies upon our decision in Florida Export Tobacco Co., Inc. v. Department of Revenue , 510 So. 2d 936 (Fla. 1st DCA 1987). T here , the appellants were plaintiffs in a class action against the appellees, the Departm ent and the Comptroller, who contested the legality of the Department’s assessment of certain taxes and sought a refund. Id. at 937. The appellant s appealed a summary judgment that was granted in the appellees’ favor on the sole ground that the Comptroll er’s decision to deny a refund of the taxes in an administrative proceeding was res judicata and barred the circuit court action. Id. The appellants argued on appeal that the Comptroller lacked jurisdiction to adjudicate the legality of the tax assessmen t by reason of a constitutional provision that provided that circuit courts have exclusive jurisdiction in all cases involving the legality of any “tax assessment or toll.” Id. at 941. The appellees disputed the appellants’ contention, arguing in part th at “no tax assessment is involved in this case.” Id. In addressing this argument, we set forth: The Florida Statutes do not contain a definition of assessment, so we must look to the ordinary definition and usage of the term in construing the constitutio n and statute. . . . “Assessment” is defined as “the act of assessing” or “an amount assessed.” American Heritage Dictionary, page 79 (New College Edition 1979). The word “assess” is usually defined as including: 1. To estimate the value of (property) for taxation. 2. To set or determine the amount of (a tax, fine or other payment).9 3. To charge (a person or property) with a tax, fine, or other special payment. Id. at 79. See also Black's Law Dictionary (5th ed. 1979); Oxford English Dictionary (Comp act Ed. 1971). With the accepted definitions in mind, we conclude that the term “assessment,” as used in chapter 212, Florida Statutes, encompasses the instant situation, where a taxpayer has refused to pay a sales tax on a rental payment under chapter 212 and DOR has communicated the amount of taxes claimed to be due under that chapter and made a demand for the taxpayer to make payment

. See § 212.14, Fla.Stat. (1979)

. . . . Accordingly, DOR’s notice of tax due and demand for payment of the tax constitutes an assessment that is reviewable in ci rcuit court

.

. . . In the present case, appellants had not paid any sales tax on the profit participation charge to Dade County, and the county had not reported any tax due thereon when it filed its returns with DOR. DOR, therefore, “assessed” such taxe s when it determined that Dade County’s sales tax return was incorrect and communicated by letter to Dade County that the county was required to bill appellants for the sales taxes due on the profit participation charges, collect the taxes, and remit the c ollected monies to DOR. We hold that appellants’ cause of action in this case amounts to a challenge of “the legality of a tax assessment” within the meaning of article V, section 20(c)(3), Florida Constitution , and the related implementing statutes hereafter discussed. Id. at 942

- 43 (emphasis added). While we agree with the Department that Florida Export Tobacco Co. supports a broad reading of the term “assess” or “ass essment” in the taxing context, we do not find our previous deci sion controlling in this case as we are unable to equate a proposed assessment to a demand for payment. As the Department acknowledges, a taxpayer is under no legal obligation to pay a tax assessment until the assessment becomes final. More important to our decision, the Legislature has10 addressed in section 213.21, Florida Statutes (2010), the statute of limitations in the taxing context in terms of a “ final assessment. ” Section 213.21(1)(a) authorizes the Department to “adopt rules for establishing info rmal conference procedures within the department for resolution of disputes relating to assessment of taxes, interest, and penalties and the denial of refunds, and for informal hearings . . . .” Section
213.21 (1)(b) provides that the “statute of limitatio ns upon the issuance of final
assessments shall be tolled during the period in which the taxpayer is engaged in a procedure under this section.” (Emphasis added). In rejecting the argument that section 213.21(1)(b) supported Appellant’s position, the t rial court reasoned that the statute, which, according to it, “provides for a tolling of the limitations period for the issuance of ‘final assessments’ when certain informal procedures are sought,” indicates that an assessment of taxes exists prior to the informal procedures and a final assessment. While that may be the case, the fact remains that the statute talks of a “final assessment” in terms of the tolling of the statute of limitations, which, in taxing cases , is section 95.091 . Had the Legislature wished to, it could have simply used the word “assessment” in section
213.21 (1)(b). The fact that it chose to qualify “assessment” with the word “final” leads us to conclude that the assessment contemplated in the statute of limitations is a final assessm ent. If, as the Department contends, a proposed assessment was the assessment contemplated in section 95.091(3)(a), then there would be no need for11 section 213.21(1)(b) and the tolling of the statute pending the informal dispute or conference procedures b ecause the necessary act for purposes of the statute of limitations , i.e. , the issuance of the proposed assessment, would have already occurred by the time inf ormal procedures were invoked. See Metro. Cas. Ins. Co. v. Tepper , 2 So. 3d 209, 215 (Fla. 2009) (noting that the words in a statute should not be construed as superfluous if a reasonable construction exists and gives effect to all the words in the statute).
We also reject the Department’s argument that the provision only applies in cases where taxpayers in voke informal procedures. We see no reason to conclude that a proposed assessment is the “assessment” for purposes of section 95.091(3)(a) only in cases where a taxpayer does not dispute the proposed assessment. In stead,

we cons true, as we must, section 95.091 (3)(a) and section 213.21(1)(b) in para
materia

. See Fla. Dep’t of State, Div. of Elections v. Martin , 916 So. 2d 763, 768 (Fla. 2005) (noting that pursuant to the doctrine of in para materia , statutes relatin g to the same subject or object should be construed together to harmonize the statutes and to give effect to legislative intent). Doing so leads to the conclusion that the

assessment contemplated in section 95.09 1(3)(a) is a final assessment. 2

2 Although our conclusion is guided by the plain language of section 213.21(1)(b), the legislative history of the statute supports our conclusion. A legislative staff analysis for the bill at issue provided in part, “This section clarifies that when informal conference procedures pursuant to s. 213.21, F.S., are entered into, the period of limitation for issuing a final assessment shall be tolled for the time the12 While the Department argues that we must give deference to its longstanding administrative interpretation that its proposed assessments qualify as the type of assessment contemplated in the statute of limitations, we disagree. Judicial deference does not requir e that courts adopt an agency’s interpretation of a statute when the agency’s interpretation cannot be reconciled with the plain language of the

statute. See Kessler v. Dep’t of Mgmt. Servs., Div. of State Grp. Ins. , 17 So. 3d 759, 762 (Fla. 1st DCA 2009)

. Moreover, as we stated, statutes imposing taxes and penalties must be strictly construed against the taxing authority, and any ambiguity in the provision of a tax statute must be resolved in the taxpayer’s favor. See Philip
C. Owe n, Chartered , 597 So. 2d at 380. We further reject the Department’s argument that our conclusion will in some
way impede or delay a taxpayer’s right to protest a proposed assessment. Had the Department issued the NOPA in this case sixty days prior to the agreed

- upon extende d statute of limitations date of March 31, 2011, the proposed assessment would have become final, without an informal protest, within the statute of limitations period, and no timeliness challenge could have been made by Appellant. Had Appellant informall y challenged the proposed assessment, the statute of limitations would have been tolled pursuant to section 213.21(1)(b). We, thus, find

taxpayer is in conference.” Fla. S. Comm. on Fin. & Tax’n, C S/SB 1176 (1985) Staff Analysis (May 13, 1985).13 no merit in the Department’s contention that taxpayers’ rights will be negatively affected by our decision in this case. In reaching our conclusion, we are cognizant of the fact that section 220.705, Florida Statutes, which addresses corporate income t ax, provides that “[n]o deficiency shall be assessed with respect to a taxable year for which a return was filed unless a notice of deficiency for such year was issued not later than the date prescribed in s. 95.091(3).” Both parties and the trial court l ikened a notice of deficiency in the corporate income tax context to a NOPA in the sales and use tax context. However, in light of section 213.21(1)(b), we find the Department’s reliance upon section 220.705 t o be misplaced, and we conclude that the trial court erred in granting summary judgment in the Department’s favor. We also conclude that the trial court erred in alternatively determining that the Department’s

assessment was untimely only as to the first month of the three

- year audit period given the fact that t he parties’ extension agreement clearly stated that the new statute of limitations date for the entire three

- year audit period was March 31, 2011. Accordingly, we REVERSE the Final Judgment and REMAND with instructions that judgment be entere d in Appellant’s favor.
RAY and SWANSON , J J

. , CONCUR.