3 Fla. L. Weekly Supp. 328a
Taxation — Insurance — Premium tax — Salary tax credit — Workers’ compensation self-insurance fund is “insurer” subject to premium tax and is entitled to salary tax credit provided for in section 624.509(5)
Affirmed at 21 Fla. L. Weekly D1120a
JAMES E. BROCK, RUEL L. BRADLEY, JR., RALPH GIMEL, BILL BOND, JR., MARY ANN RICHARDSON, GEORGE D. GABEL, JR., AND JACK B. HEALAN, JR., as Trustees of the FLORIDA HOTEL-MOTEL SELF INSURERS FUND, Plaintiffs, v. FLORIDA DEPARTMENT OF REVENUE, Defendant. 4th Judicial Circuit in and for Duval County. Case No. 95-00423-CA, Division CV-A. July 31, 1995. Clifford B. Shepard, Judge. Counsel: Joel B. Toomey and Karl B. Hanson, III, of Gabel & Hair, Jacksonville, for Plaintiffs. Jeffrey M. Dikman, Assistant Attorney General, Tallahassee, for Defendant.
FINAL SUMMARY JUDGMENT
This cause came on to be heard on the plaintiffs’ motion for judgment on the pleadings and/or summary judgment, and the defendant’s motion for judgment on the pleadings or alternative motion for summary judgment. Both parties agreed that there were no disputed issues of material fact, and argued only as to which side was entitled to judgment as a matter of law. This Court has reviewed the pleadings and the legal memoranda submitted by counsel and has also heard argument of counsel. For the following reasons, the Court holds that plaintiffs are entitled to final summary judgment.
The sole legal issue presented in this case is whether plaintiffs are entitled to a salary tax credit provided in §624.509(5) or whether plaintiffs are subject only to subsections (1) and (2) of §624.509, and thus not entitled to the credit provided in subsection (5). The Court is of the opinion that a careful reading of the pertinent statutes makes clear that plaintiffs are entitled to the credit provided for in §624.509(5).
Plaintiffs brought this action for a refund of $68,929.93, which they had paid to defendant under protest, after defendant had indicated its intent to disallow the salary tax credit taken by plaintiffs for the years 1989 and 1990. The amount paid in dispute represents $50,399.00 in tax, $5,039.90 in penalties and $13,491.03 in interest. After paying this disputed amount, plaintiffs submitted a formal application for refund to defendant, which was later denied.
Plaintiffs are the trustees of the Florida Hotel-Motel Self Insurers Fund (“the Fund”), which is a workers’ compensation group self-insurers’ fund. Pursuant to §440.57(7), Florida Statutes (1989), the Fund was first made subject to the premium tax contained in §624.509, Florida Statutes (1989), in the tax year 1989. Section 440.57(7) (1989) provided as follows:
Premiums, contributions, and assessments received by a group self-insurer’s fund are subject to ss. 624.509(1) and (2) and 624.5092, except that the tax rate shall be 1.6% of the gross amount of such premiums, contributions, and assessments.
Thus, the Fund was made subject to the premium tax imposed by §624.509, which is contained in subsection (1), albeit at a different rate. Defendant argues that the Court should read no further, and base its decision solely on the above language. However, obviously the Court must construe all of the pertinent provisions, including §624.509 in its entirety. Section 624.509(9) provides as follows: “As used in this section `insurer’ includes any entity subject to the tax imposed by this section.” Therefore, all provisions which refer to an “insurer” in §624.509 necessarily apply to the Fund since it is subject to the tax imposed in subsection (1). Section 624.509(5) states that “there shall be allowed a credit against the net tax imposed by this section equal to 15% of the amount paid by the insurer in salaries to employees located or based within this state and who are covered by the provisions of Chapter 443.” (Emphasis added). Because the Fund is an “insurer” as defined in §624.509(9), it is clearly entitled to the salary credit.
This Court notes that the plaintiffs’ interpretation of the statutes has recently been upheld by an administrative hearing officer in the case of Central Dade Malpractice Trust Fund v. Department of Revenue, Case No. 94-5180RX. In that case Officer Linda M. Rigot struck down the administrative rule embodying defendant’s statutory interpretation as arbitrary and capricious, and termed the defendant’s taking away of a credit granted by the legislature “despotic.” This Court is in full agreement with Officer Rigot’s reasoning and with the Final Order entered in that case dated May 19, 1995. (A copy of said order is attached as Exhibit B to plaintiffs’ memorandum of law in support of their motion for judgment on the pleadings and/or summary judgment).
Although the Court sees no need to resort to legislative history given the clear language of the statutes on their face, the legislative history makes it even clearer that the Fund is entitled to the credit it seeks. The pertinent portions of sections 440.57 and 624.509 originated in Chapter 88-206, Laws of Florida. The introductory paragraph to that Act describes it as “providing that workers’ compensation group self-insurer’s funds are subject to the insurance premium tax.” Id. at 1182. In addition, the Senate Staff Analysis and Economic Impact Statement of Chapter 88-206 states:
The following types of insurers would be subject to the tax imposed under § 624.509, F.S., except that the tax rate would be 1.6% instead of 2%:
Effective July 1, 1988:
Commercial self insurance funds
Professional liability risk management funds
Group self-insurer’s funds
Effective July 1, 1989:
Multiple employer welfare arrangements.
Medical malpractice self insurers.
Senate Staff Analysis and Economic Impact Statement, section I.B.9., Bill No. CS/CS/CS/SB 1054, May 11, 1988, as revised May 25, 1988 (emphasis added).
Thus, both the language contained in the description of the Act and its legislative history make clear that the legislature intended to make group self-insurers’ funds “subject to the tax imposed” under §624.509. Therefore, under a clear reading of subsection (9) of that section, the Fund is an “insurer,” and is therefore entitled to the credit allowed an “insurer” in §624.509(5).
For the foregoing reasons
IT IS ORDERED AND ADJUDGED that plaintiffs recover from defendant the sum of $68,929.93 that shall bear interest at the rate of 8% per year for which let execution issue. In addition, the Court retains jurisdiction to award costs in favor of plaintiffs against defendant in an amount to be determined.
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