Court: District Court of Appeal of Florida; November 7, 1995; Florida; State Appellate Court
The court case involves Advanced Mobilehome Systems and Alumax Fabricated Products concerning the reimbursement of sales tax assessed by the Florida Department of Revenue. The District Court of Appeal of Florida reversed the trial court's judgment in favor of Alumax, directing the trial court to enter judgment for Advanced Systems instead. The appeal arose from transactions between July 1988 and May 1992, where Alumax sold roll roofing products to Advanced Systems, issuing invoices that indicated "no" sales tax would be collected. The invoices stated that prices did not include any taxes, which were to be paid by the buyer.
After an audit, the Department of Revenue identified Alumax's failure to collect sales tax, leading Alumax to pay the owed amount and seek reimbursement from Advanced Systems. The trial court initially ruled in favor of Alumax, asserting the contract terms on the invoices governed the tax obligation. However, the appellate court determined that under Florida law, specifically § 212.07(2), a seller must state sales tax separately on invoices to retain the right to recover it from the buyer. Because Alumax did not do this, they waived their right to recover the tax. Additionally, Advanced Systems did not possess a resale certificate, which would have exempted them from sales tax. Consequently, the appellate court reversed the lower court’s judgment and addressed the mootness of the related issues regarding attorney's fees and costs awarded to Alumax.
Alumax's employees mistakenly did not enter that Advanced Systems was subject to Florida sales tax into their computer system, resulting in invoices that inaccurately indicated no sales tax was owed. As per section 212.07(2), Alumax is liable for the uncollected tax without the possibility of reimbursement from Advanced Systems. Alumax argues that the situation is complicated by Advanced Systems’ agreement to pay any sales tax imposed later, referencing Leonard Parker Co. v. SPV Partners, where a similar issue arose due to a computer error. In that case, a written agreement made the buyer responsible for sales tax, leading to a ruling against the seller seeking reimbursement. However, in this instance, no signed agreement exists regarding tax responsibility between the parties. Alumax points to language on the back of its invoices to assert that Advanced Systems agreed to pay the sales tax. The trial court determined that Advanced Systems did not reject the invoices, thus the terms—including tax responsibility—were binding under the Uniform Commercial Code. Specifically, sections 672.201(2) and 672.207(2) indicate that if a merchant receives a written confirmation of a contract and does not object within ten days, the terms are enforceable. The court ruled that the invoices met these criteria, confirming that Advanced Systems is responsible for the sales tax.
Section 672.201 is not relevant as it pertains only to the enforceability of contracts against a statute of frauds defense, which Advanced Systems did not assert. The dispute focuses on the terms of the agreement with Alumax. A confirming writing that satisfies section 2-201 of the Uniform Commercial Code only addresses the statute of frauds defense, not the actual contract terms. To assess whether Advanced Systems' inaction on invoices indicated acceptance of Alumax's terms, section 672.207(2) must be analyzed. Both parties are recognized as merchants. Advanced Systems indicated understanding that Alumax’s quoted price was all-inclusive, and there was no specific discussion regarding sales tax. The invoice's statement assigning sales tax responsibility to the buyer was considered an additional term under section 672.207, which can become part of the contract unless it materially alters the agreement, as outlined in exception (b). The Uniform Code Comment states that material alterations could lead to surprise or hardship if accepted without the other party's explicit awareness.
In a related case, Union Carbide Corp. v. Oscar Mayer Foods Corp., the inclusion of a sales tax provision was deemed a material alteration, rendering it unenforceable due to lack of agreement from the buyer. Similarly, Alumax failed to demonstrate that Advanced Systems agreed to the sales tax term. The potential for a buyer to reject future orders if sales tax appeared on an invoice illustrates the significant difference between accepting a specific charge versus an undefined future liability. Therefore, the sales tax clause was determined to materially alter the original purchase terms, rendering the contract enforceable without this additional term. Consequently, Advanced Systems is not liable for back taxes, as Alumax did not comply with the requirement to state sales tax separately under section 212.07(2) of the Florida Statutes (1991). The judgment against Advanced Systems is reversed, and the case is remanded for judgment in its favor.
