Court Opinion

ID: 9940592
Source: CourtListenerOpinion
Date Created: 2024-02-14 20:03:24.183602+00
Date Added: 2024-06-11T13:45:03.462767
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                STATE OF FLORIDA
                  _____________________________

                         No. 1D2022-3284
                  _____________________________

SEI FUEL SERVICES INC.,

    Appellant,

    v.

FLORIDA DEPARTMENT OF
REVENUE,

    Appellee.

                  _____________________________

On appeal from the Department of Revenue.
Andrea Moreland, Deputy Executive Director.

                        February 14, 2024

OSTERHAUS, C.J.

    Appellant SEI Fuel Services, Inc. appeals the Department of
Revenue’s final order denying its request for a partial refund of
double-paid motor fuel taxes. The Department concluded that
§ 206.414(3), Florida Statutes, barred it from refunding either of
Appellant’s overpayments. We disagree and reverse.

                                I.

    Sometime between 2011 and 2014, Appellant, a supplier of
motor fuel to 7-Eleven stores, purchased a certain amount of fuel
from its upstream supplier, Sunshine Gasoline Distributors, Inc.
Florida law requires the payment of a fuel tax on the purchase or
sale of such motor fuel. See § 206.41, Fla. Stat. Appellant owed
$3,179,675.11 in motor fuel taxes on these purchases. Appellant
paid the tax amount directly to its supplier, Sunshine, who then
remitted the payment to the Department. Sometime later,
Appellant paid the same fuel tax in the same dollar amount
directly to the Department. The Department subsequently audited
Appellant’s fuel tax payments and the parties discovered the
double-payment. The parties agree that Appellant paid its
$3,179,675.11 tax bill twice to the Department through different
channels.

     After the audit, Appellant filed a request to get its direct
payment to the Department back. The Department denied it.
Appellant contested this denial pursuant to Chapter 120, Florida
Statutes. But an administrative law judge found no disputed
issues of material fact and relinquished jurisdiction back to the
Department for proceedings before a hearing officer. In arguments
before the hearing officer, Appellant asserted entitlement to a
refund of the second payment made directly to the Department.
Appellant acknowledged that it was statutorily barred from
getting a refund for the first tax payment made through Sunshine.
Appellant argued, however, that the second payment made
directly to the Department was an overpayment made in error for
purposes of § 215.26. The hearing officer ultimately upheld the
Department’s denial of Appellant’s refund request and Appellant
then appealed.

                                 II.

     An agency’s interpretations of law are reviewed de novo,
whereas its findings of fact are reviewed for competent, substantial
evidence. 1701 Collins Mia. Owner, LLC v. Dep’t of Revenue, 321
So. 3d 875, 878 (Fla. 1st DCA 2021). A reviewing court may not
defer to an agency’s interpretation of a statute. Art. V, § 21, Fla.
Const. The taxpayer has the burden of proving by a preponderance
of the evidence that it is entitled to a refund. 1701 Collins, 321 So.
3d at 880.

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      Section 206.41 sets forth the taxes payable on sales of motor
fuel. This section specifies that, generally, motor fuel taxes are
imposed on the “removal of motor fuel in this state from a terminal
if the motor fuel is removed at the rack.” § 206.41(6)(a), Fla. Stat.
But, relevant here, § 206.414 requires a different collection
methodology for fuel taxes imposed under § 206.41(1)(d), (e), and
(f) that are above the annual minimum tax. These taxes above the
annual minimum must be collected and remitted directly by
purchasing suppliers like Appellant upon selling, delivering, or
consigning fuel to their customers. § 206.414(2)-(3), Fla. Stat.
Where a midstream supplier like Appellant fails to follow this
directive and pays the taxes to an upstream supplier then “no”
refunds are available for the above-the-annual-minimum taxes
imposed under § 206.41(1)(d), (e), and (f) paid to the supplier.
§ 206.414(3), Fla. Stat.

     In this case, the parties don’t dispute that the motor fuel taxes
applicable here fall within § 206.414’s requirement for payment
directly by Appellant to the Department. This meant Appellant’s
first tax payment through Sunshine was not made via a lawful
channel. But the Department nonetheless received and accepted
the tax payment made through Appellant’s supplier. According to
§ 206.414(3), Appellant couldn’t now receive a refund for this tax
payment made through Sunshine. And Appellant concedes as
much.

     What Appellant asserts is that its subsequent second payment
of the same tax, made directly to the Department this time,
remains eligible to be refunded because it wasn’t made through a
channel for which refunds are prohibited. Section 206.13 allows
taxpayers to seek a refund for erroneously paid motor fuel taxes
under § 215.26, which provides for refunds for overpaid taxes,
payments made where no tax is due, or other payment errors.
§ 215.26(1), Fla. Stat. Here, Appellant made some combination of
these mistakes and ended up paying its tax bill twice resulting in
a more than $3 million overpayment to the Department.

     The Department counters that it can keep both of Appellant’s
payments because the first payment came through an unlawful
channel and only the direct payment properly remitted the tax
due. We do not agree, however, that the Department’s receipt and

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acceptance of the first non-refundable payment also prohibits
Appellant from obtaining a refund of the subsequent direct
payment of the same tax that resulted in double payment. The
Department acknowledges that Appellant made two full payments
corresponding to the very same tax invoice. The Department
received both payments, taking in double what it was owed.
Appellant’s first tax payment through its supplier satisfied the
required tax. Thus, as Appellant asserts, the later payment is
eligible to be refunded under § 215.26(1) as an overpayment or
other error in paying an already-paid tax. See Dep’t of Revenue v.
Kemper Invs. Life Ins. Co., 660 So. 2d 1124, 1129 (Fla. 1st DCA
1995) (“[W]e are of the view that the tax laws contain ample
provisions for penalties and interest for taxpayer's errors and
omissions, and it is not the province of the Department to create
additional penalties and forfeitures for the taxpayer, or windfalls
for the state.”). Since the second payment was made directly, and
nothing bars refunds for direct tax payments mistakenly made to
the Department, Appellant should not have been disqualified
under § 206.414(3) from receiving a refund of the $3,179,675.11
payment made directly to the Department.

     We therefore REVERSE and REMAND for the issuance of a
refund of Appellant’s direct payment because no tax remained due
in addition to the full payment made through Appellant’s supplier.

ROWE and BILBREY, JJ., concur.

                 _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

Michael J. Bowen and Aleksas A. Barauskas, of Akerman LLP,
Jacksonville; Kristen M. Fiore of Akerman LLP, Tallahassee, for
Appellant.

Ashley Moody, Attorney General, and Timothy E. Dennis, Chief
Assistant Attorney General, and Christopher Baisden, Office of

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the Attorney General, Revenue Litigation Bureau, and Mark S.
Hamilton, Florida Department of Revenue, Tallahassee, for
Appellee.

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