Florida’s Constitution divides the power of the state government between three branches: the legislative, executive, and judicial branches. Rather, it argues that the Department must initiate rulemaking before applying that tax to its whole leaf tobacco wraps, because it isn’t clear that they are “loose tobacco suitable for smoking.” § 210.25(12), Fla. Grabba-Leaf doesn’t argue that its wraps cannot be taxed as “tobacco products” under the statute (not yet at least). Grabba-Leaf’s argument on appeal strikes at the heart of the Department’s authority, in the absence of rulemaking, to assess taxes against products that only arguably fall within the parameters of a tax statute. Volusia Home Builders Ass’n, Inc., 946 So. We review the ALJ’s conclusions of law in this unadopted rule challenge de novo. In his view, the Department’s memo applied the plain meaning of a clear and unambiguous statute to Grabba-Leaf’s wraps: “t is readily apparent that whole leaf, non2 homogenized cigar wraps meet statutory definition of loose tobacco suitable for smoking.” Grabba-Leaf timely appealed this final order. An administrative law judge, however, concluded that rulemaking wasn’t required. The challenge culminated below in an administrative hearing, where Grabba-Leaf argued that the Department was unlawfully enforcing interpretations of the statute and of the opinion in Brandy’s without having satisfied its rulemaking obligations. In response to the memo, Grabba-Leaf challenged the new tax policy as an unadopted rule. But that it would continue taxing whole leaf blunt wraps as “tobacco products.” See §§ 210.276 & 210.30, Fla. The Department sent a memorandum to licensed distributors of tobacco products taking the position that “homogenized tobacco wrap products,” like those sold by Brandy’s Products, would not be taxed. Following the Brandy’s decision, the Department amended its tax policy to carve out Brandy’s Products-like tobacco wraps, but continue taxing other wraps. 1st DCA 2016) (reversing the agency’s determination that Brandy’s blunt wraps “are taxable ‘tobacco products’”). And its argument ultimately prevailed before this court. Distributor Brandy’s Products, Inc., challenged the State’s tax on the basis that its wraps were not taxable “tobacco products” as defined by § 210.25, Florida Statutes. Florida’s blunt wrap distributors were not pleased. After the federal government began taxing blunt wraps in 2009, the State of Florida followed suit by applying its “other tobacco products” tax to tobacco wraps. The appellant, Grabba-Leaf, is a licensed distributor of tobacco wrap products (known colloquially as “blunt wraps”). Because the policy and practice set forth in the memo alters the Department’s tax policy, makes new distinctions between taxable and non-taxable tobacco wraps, and includes taxing whole leaf tobacco products that aren’t clearly covered by the applicable statutory definition, we conclude that the Department’s statement constitutes an unadopted rule. But Grabba-Leaf argues that the Department’s policy and interpretation of the statute required formal agency rulemaking, not simply just a memo to tobacco distributors. The memo stated that the Department would no longer tax “homogenized tobacco wraps” because of a court decision, but would continue taxing “whole leaf” tobacco wraps as “tobacco products.” The Department interpreted whole leaf wraps to qualify as “loose tobacco suitable for smoking” under the definition of “tobacco products.” § 210.25(12), Fla. Grabba-Leaf, LLC, filed an unadopted rule challenge in 2016, just after the Florida Department of Business and Professional Regulation issued a memorandum to distributors of tobacco products changing its practice of taxing tobacco wraps. Lawrence Johnston, Administrative Law Judge. _ On appeal from the Division of Administrative Hearings. DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO, Appellee. FIRST DISTRICT COURT OF APPEAL STATE OF FLORIDA _ No.
0 Comments
Leave a Reply. |