Case Name: DEPARTMENT OF REVENUE, and Department of Banking and Finance, Appellants, v. U. S. SUGAR CORPORATION, Appellee; UNITED STATES SUGAR CORPORATION, Appellant, v. DEPARTMENT OF REVENUE and Department of Banking and Finance, Appellees
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1980-09-11
Citations: 388 So. 2d 596
Docket Number: Nos. MM-389, NN-467
Parties: DEPARTMENT OF REVENUE, and Department of Banking and Finance, Appellants, v. U. S. SUGAR CORPORATION, Appellee. UNITED STATES SUGAR CORPORATION, Appellant, v. DEPARTMENT OF REVENUE and Department of Banking and Finance, Appellees.
Judges: SHIVERS, J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 388
Pages: 596–601

Head Matter:
DEPARTMENT OF REVENUE, and Department of Banking and Finance, Appellants, v. U. S. SUGAR CORPORATION, Appellee. UNITED STATES SUGAR CORPORATION, Appellant, v. DEPARTMENT OF REVENUE and Department of Banking and Finance, Appellees.
Nos. MM-389, NN-467.
District Court of Appeal of Florida, First District.
Sept. 11, 1980.
Rehearing Denied Oct. 20, 1980.
Jim Smith, Atty. Gen., and Cecil L. Davis, Jr., Asst. Atty. Gen., Tallahassee, for Dept, of Revenue and Dept, of Banking and Finance.
K. Lawrence Gragg of Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, for U. S. Sugar Corp.

Opinion:
SHAW, Judge.
The taxpayer, United States Sugar Corporation, has a division which raises and sells cattle to buyers throughout the United States. All cattle are sold f. o. b. Clewiston, Florida, the location of the corporation's ranch, purchaser providing transportation from Clewiston to the point of final destination.
Based upon the taxpayer's interpretation of § 214.71(3)(a), Florida Statutes (1977), which reads in pertinent part as follows, a refund was sought:
Sales of tangible personal property are in this state if the property is delivered or shipped to a purchaser within this state, regardless of the f. o. b. point or other conditions of the sale.
The Department of Revenue denied the claim and the taxpayer filed a petition for formal proceedings under § 120.57(1), Florida Statutes, challenging the Department's position. Subsequent to the filing of the petition it was brought to the Department's attention that the cattle had been shipped by private contract carriers. In refusing a refund the Department advised the taxpayer that:
It was determined that cattle were shipped via commercial carrier. Further, it was ascertained that these carriers were "contract carriers" and not "common carriers". Because the purchaser could redirect shipment of cattle by contract carrier (independent cattle haulers and chartered aircraft), the sales are deemed to have been made in Florida at the point where carrier took possession of cattle. The contract carrier, under the described circumstances, is acting as purchaser's agent. In the capacity of special agent for purchaser, the carrier accepted delivery of the cattle in Florida. (Tax Audit Statement)
Following this position statement U. S. Sugar filed a petition for formal proceedings to determine the validity of a rule pursuant to § 120.56, Florida Statutes, asserting that the Department's policy, as set forth in the tax audit statement, constituted a rule not properly promulgated. The petitions were consolidated, and the hearing officer entered an order in the § 120.56 proceeding and a recommended order in the § 120.57(1) proceeding.
In the recommended order the hearing officer found that had the cattle been picked up by a common carrier for shipment outside of Florida the Department would have held that the sales were out-of-state, but because the cattle were picked up by contract carrier the Department classified them as in-state and directed its auditors to so conclude on all audits. The Department rejected the recommended order and submitted a proposed substitute order which was adopted as the final order.
In light of testimony by Department personnel that the only reason the cattle sales in issue were treated as in-state sales was because they were shipped by contract carrier, it is difficult to accept the Department's argument that its policy of classifying sales on the basis of the type of carrier utilized is not a policy of general applicability. Section 214.71(3)(a), Florida Statutes, makes no distinction between common car rier and contract carrier. The Department, by making such a distinction, has placed upon the statute an interpretation that is not readily apparent from a reading of the statute, but impacts upon the taxpayer with the consistent effect of law. We agree with the hearing officer's conclusion that the statement is one of general applicability that implements, interprets or prescribes law, policy, procedure or practice requirements of the agency and falls squarely within the definition of a rule as defined by § 120.52(14), Florida Statutes (1977). State, Dept. of Com., Etc. v. Matthews Corp., 358 So.2d 256 (Fla. 1st DCA 1978); State, Dept. of Admin., Etc., Person, v. Harvey, 356 So.2d 323 (Fla. 1st DCA 1978); State, Dept. of Administration v. Stevens, 344 So.2d 290 (Fla. 1st DCA 1977). See also Fraser v. Lewis, 360 So.2d 1116 (Fla. 1st DCA 1978) and McDonald v. Dept. of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977).
Affirm MM-389.
Reverse NN-467.
SHIVERS, J., concurs.
ERVIN, J., specially concurring, with opinion.