As a Florida business owner, it is important to comply with relevant regulations. If the authorities feel you haven’t, they might impose penalties that could harm your business.
What can you do if you believe their assessment is wrong? Or, if you accept that you have made mistakes but believe the punishments are unreasonable? You can contest the state’s response, as one company has just done.
What is the challenge about?
Basik is a distributor of tobacco products. As such, they are licensed and regulated by Florida’s Division of Alcoholic Beverages and Tobacco (DABT). Basik must pay a tax and surcharge to the DABT to operate in the state. They’ve always done this. They are also required to obtain a surety bond, which was $39,000 until recently.
In 2018 the DABT began periodic audits of Basik’s monthly reporting. These resulted in assessments against Basik totaling $9 million. Basik went to court to dispute this amount. The DABT then raised Basik’s surety bond from $39,000 to more than $1.8 million without explanation.
Florida law states that any person substantially affected by a rule can seek an administrative determination of the rule’s validity. Basik is now exercising this right. They claim that:
- DABT exceeded and violated its rulemaking authority
- The rule is too vague and allows the DABT too much room for interpretation
The outcome is yet to be decided. If a court upholds the DABT’s actions, it could have serious consequences for Basik’s ability to do business in the state.
This legal matter serves as a valuable reminder that there are legal options available if you disagree with an administrative charge.