P.R. MARKETING GROUP, INC., A FLORIDA CORPORATION, AND WORLD FINANCIAL SERVICES, INC., D/B/A THE MORTGAGE LENDING GROUP, A FLORIDA CORPORATION, APPELLANTS,
v.
GTE FLORIDA INCORPORATED, A FLORIDA CORPORATION, ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY SITUATED, AND STATE OF FLORIDA, DEPARTMENT OF REVENUE, APPELLEES
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P.R. Marketing Group and World Financial Services challenged GTE Florida's calculation of Florida sales taxes on long distance telephone calls, alleging improper application of the bracket method and unlawful pyramiding of taxes. The trial court granted summary judgment for the Department of Revenue and GTE, and the appellate court affirmed, noting that if the administrative interpretation was not legislative intent, the legislature should clarify the statutes.
The court affirmed the trial court's summary judgment for the Department of Revenue and GTE, upholding the lawfulness of the bracket method as applied and the existing tax calculation scheme, though the court expressed concern about potential legislative intent misalignment.
[1] A tax regulation's long-standing administrative interpretation is entitled to deference, and any legislative intent to the contrary should be addressed by the legislature…
[2] The bracket method of taxation, as applied to long distance telephone calls, is permissible if implemented in accordance with administrative rules.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“We note that for years these administrative methods and interpretations have been used to implement the applicable statutes. If the DOR administrative interpretation of the legislative mandate is not what the legislature intended, it is up to our legislature to investigate and change or clarify the statutes.”
Establishes that the court defers to long-standing administrative interpretation and places the burden on the legislature to correct any misalignment with legislative intent, rather than on courts to reinterpret statutes.
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Join FLexlaw to unlock all legal intelligenceP.R. Marketing Group and World Financial Services were customers of GTE Florida who paid long distance telephone taxes. GTE and the Department of Reve…
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SALCINES, Judge.
P.R. Marketing Group, Inc., and World Financial Services, Inc. d/b/a The Mortgage Lending Group, appeal the trial court’s final summary judgment. The final summary judgment was entered after the trial court denied P.R. Marketing and World Financial Services’ motion for summary judgment on the issue of Lability and granted motions for summary judgment in favor of the Florida Department of Revenue (DOR), and GTE Florida Inc. n/k/a Verizon Florida Inc. The action brought by P.R. Marketing and World Financial Services concerned whether GTE was properly calculating Florida taxes paid on long distance telephone calls.
We affirm but write to encourage the legislature to evaluate the statutes discussed hereinafter. In count one of their complaint, P.R. Marketing and World Financial Services challenged DOR and GTE’s practice of using the bracket method of taxation for long distance telephone calls. See Fla. Admin. Code R. 12A 1.003. By using this method of taxation, the tax was calculated at the time each individual telephone call was made rather than at the time the monthly bill was rendered for all calls made during that time period. While P.R. Marketing and World Financial Services had no complaint about the bracket method of taxation itself, they argued that it had been improperly applied by DOR and GTE, and that the improper application resulted in a taxation overcharge with each monthly bill.
In count two, P.R. Marketing and World Financial Services asked the trial court to declare unlawful the imposition of a seven percent sales tax on intrastate long distance telephone calls. They alleged that a careful reading of section 212.05(l)(e), Florida Statutes (Supp.1994), revealed that only a six percent sales tax was authorized.
In count three, P.R. Marketing and World Financial Services asserted that DOR and GTE were engaged in a complicated pyramiding of taxation which was contrary to the dictates of section 212.081(3)(b), Florida Statutes (1993), and section 212.12(12), Florida Statutes (Supp. 1994).
This pyramiding was alleged to have resulted from the multiple taxation of a 2.5 percent gross receipts tax which GTE legitimately passed on to its customers pursuant to section 203.01(5), Florida Statutes (1993).
More specifically: (1) double taxation occurred when a seven percent sales tax was imposed upon the 2.5 percent gross receipt tax; (2) triple taxation occurred when the 2.5 percent gross receipt tax charged to the customer became part of the gross receipts of the utility which was then once again taxed at 2.5 percent (resulting in the collection of a total of 2.56 percent in gross receipts taxes rather than the 2.5 percent authorized); and (3) quadruple taxation occurred when the customers were subjected to a seven percent sales tax on that additional .06 percent of gross receipts tax.
We note that for years these administrative methods and interpretations have been used to implement the applicable statutes. If the DOR administrative interpretation of the legislative mandate is not what the legislature intended, it is up to our legislature to investigate and change or clarify the statutes. Accordingly, we affirm.
Affirmed.
ALTENBERND and FULMER, JJ., Concur.