Florida SALT attorney, state tax litigation, Florida department of revenue litigation, institute for professionals in taxation, council on state taxation

When disputes with the Florida Department of Revenue (FDOR) cannot be resolved through administrative protests or settlement, businesses may find themselves in formal tax litigation. Whether you are challenging a sales tax assessment, a corporate income tax adjustment, a denied refund, or a jurisdictional issue, litigation requires focused legal strategy, procedural compliance, and effective courtroom advocacy.

At Moffa Tax Law, we are a boutique firm that focuses exclusively on Florida state and local tax issues. We handle litigation involving sales and use tax, corporate income tax, penalty and interest disputes, multistate nexus claims, and refund claims. We represent clients in proceedings before DOAH, in circuit court, and on appeal in Florida’s District Courts of Appeal.

Understanding the Florida Tax Litigation Process

Florida tax litigation generally follows a series of prior disputes between a business and the FDOR. These steps often include a tax audit, informal protest, and petition for reconsideration. Once those avenues are exhausted, the taxpayer may initiate litigation to formally challenge the state’s final decision.

The general timeline is:

1. FDOR conducts a tax audit and issues a Notice of Proposed Assessment.
2. The taxpayer files a protest and enters the Informal Dispute Resolution (IDR) process.
3. The Department issues a Notice of Decision.
4. A Petition for Reconsideration may be filed to provide new facts or arguments.
5. The FDOR issues a Notice of Reconsideration.
6. If the taxpayer still disagrees, litigation is filed in DOAH or circuit court.

Comparing DOAH and Circuit Court Litigation

Florida tax litigation typically proceeds in one of two forums: the Division of Administrative Hearings (DOAH) or the appropriate circuit court. DOAH litigation involves a streamlined administrative hearing before an Administrative Law Judge (ALJ), who issues a proposed recommended order that the FDOR may adopt, reject, or modify. This venue is often more cost-effective and faster than traditional court proceedings.

By contrast, circuit court litigation may be more appropriate in refund cases or when statutory claims are involved. Circuit court proceedings follow formal civil litigation rules, may involve juries in limited situations, and can provide broader discovery options. However, circuit court is often a slow and expensive process. Moreover, circuit court judges are less likely to have encountered Florida tax cases than their counterparts in DOAH who routinely deal with cases against state tax agencies such as the Department of Business and Professional Regulation (DBPR) and the Department of Revenue (DOR). 

It is important to remember that Florida does not have a state tax court. The decision to file in DOAH or circuit court depends on the nature of the dispute, the taxpayer’s objectives, and strategic legal considerations. Our firm advises clients on the most effective venue based on the specific circumstances of the case.

Common Florida Tax Litigation Matters We Handle

Moffa Tax Law represents businesses in a wide range of tax litigation matters, including:

• Sales and use tax litigation – Challenging assessments based on misclassified transactions, disallowed exemptions, audit sampling errors, or estimated liabilities.
• Corporate income tax litigation – Disputes over apportionment, taxable income, improper deductions, or multistate nexus.
• Refund litigation – Cases involving denial of tax refunds, even after protests and reconsideration petitions.
• Enforcement and collections litigation – Challenging unlawful tax liens, levies, or attempted license suspensions.
• Penalty and interest disputes – Seeking abatement or reduction of penalties due to reasonable cause or administrative error.
• Jurisdictional and nexus litigation – Defending out-of-state businesses from assessments based on disputed nexus determinations.

Our attorneys bring decades of experience to each of these areas, and we prepare every case with the detail and precision required for successful litigation.

Florida Sales Tax Litigation

Sales tax litigation is one of the most common forms of state tax litigation in Florida. Businesses in industries like retail, hospitality, construction, and e-commerce are frequently targeted for Florida sales tax audits, often resulting in large proposed assessments based on aggressive audit practices. When administrative remedies are unsuccessful, litigation becomes necessary to prevent unjust liability.

We litigate sales tax disputes involving:

• Errors in applying taxability rules to goods or services
• Improper denial of resale or exemption certificates
• Misapplication of use tax on business inputs
• Deficient or inflated audit sampling methodologies
• Cash-based accounting and point-of-sale system limitations
• Disputed classification of labor and material charges

Sales tax cases often require expert analysis of records, invoice sampling, and cross-referencing of internal systems. We work with our clients to prepare a defensible litigation strategy backed by financial data and legal interpretation.

Florida Corporate Income Tax Litigation

The FDOR closely scrutinizes businesses that file corporate income tax returns in Florida, particularly multistate corporations and pass-through entities that may also trigger combined reporting issues. When the Department issues proposed assessments for underreported income, improper apportionment, or disallowed deductions, litigation may be the only way to resolve the dispute.

Florida corporate income tax litigation often involves:

• Disputes over apportionment formulas and sales factor sourcing
• Nexus disputes for out-of-state companies
• Challenges to claimed net operating losses or business expenses
• Adjustments based on intercompany or related-party transactions
• Determinations of business versus non-business income

These cases may involve significant dollar amounts and complex multi-jurisdictional issues. Our firm is deeply familiar with Florida’s apportionment and nexus standards and regularly litigates such disputes.

Refund Claims and Florida Tax Refund Litigation

Taxpayers that overpay Florida taxes are entitled to seek refunds. However, the refund process can be lengthy and difficult to navigate, and the Department often denies claims for technical or interpretive reasons. When refunds are denied after informal dispute resolution and reconsideration, businesses may pursue litigation.

Florida tax refund litigation may be appropriate in the following circumstances:

• Sales or use tax was improperly paid on non-taxable items or services
• A refund claim was denied with little explanation or legal justification
• The FDOR failed to act on a claim within a reasonable time
• The taxpayer seeks to clarify ambiguous statutory or regulatory interpretations

We assist businesses in preparing refund claims and filing lawsuits to recover taxes that were overpaid due to mistake, misinterpretation, or FDOR error.

Penalties and Interest in Florida Tax Litigation

Many tax litigation cases center not only on the validity of the tax assessment itself, but also on the significant penalties and interest imposed by the Department. Florida law allows the FDOR to assess multiple categories of penalties that can quickly exceed the amount of tax due.

Types of penalties commonly litigated include:

• Negligence penalties – imposed when the Department believes a business acted carelessly
• Substantial understatement penalties – triggered by large tax discrepancies
• Fraud penalties – severe penalties imposed for intentional tax evasion
• Late filing or late payment penalties – often automatic and cumulative

In addition to penalties, interest is assessed from the original due date of the tax and continues to accrue until the liability is paid in full. We regularly challenge these additions in litigation by arguing for penalty abatement based on reasonable cause, good-faith compliance efforts, or audit methodology errors.

Appellate Tax Litigation in Florida

Tax litigation does not always end at trial. When either the taxpayer or the Department is dissatisfied with the outcome of litigation before DOAH or circuit court, the case may be appealed to one of Florida’s five District Courts of Appeal.

Most Florida tax cases are appealed to the First District Court of Appeal, which is located in Tallahassee and has jurisdiction over most state agency litigation. Our firm has experience briefing and arguing tax cases before the First DCA and other appellate courts, ensuring that your legal arguments are preserved and properly presented on appeal.

We handle:

• Appeals of adverse rulings in sales and income tax litigation
• Challenges to final orders issued by administrative law judges
• Appellate brief writing, oral argument preparation, and procedural compliance
• Coordination with trial counsel or handling appeals as independent counsel

We are committed to representing clients through every stage of the tax dispute process, including post-trial and appellate review.

Administrative Law Challenges to Rules and Agency Actions

Not all Florida tax litigation involves assessments or refunds. In some cases, the dispute centers on the legality of the Florida Department of Revenue’s rules or actions themselves. Florida law provides businesses with the right to challenge administrative rules—or even informal policies used as rules—when they exceed statutory authority, were adopted without proper procedure, or impose unlawful burdens on taxpayers.

There are two primary types of administrative challenges under the Florida Administrative Procedure Act:

Rule Challenges: A taxpayer or interested party may file a formal petition in the Division of Administrative Hearings (DOAH) alleging that a rule adopted by the Florida Department of Revenue is invalid. This may be because the rule exceeds the agency’s legal authority, conflicts with governing statutes, or was adopted without following proper procedures. These challenges are often used to test the legality of rules interpreting sales tax, apportionment formulas, or penalty frameworks.

Unadopted Rule Challenges: In many cases, the FDOR applies internal policies, manuals, or unwritten standards that have not gone through the formal rulemaking process. When these informal rules are used to impose new obligations or liabilities on taxpayers, businesses may challenge them as “unadopted rules.” If DOAH finds that the Department is enforcing a standard that qualifies as an unadopted rule, it may issue a final order invalidating the practice and prohibiting further enforcement.

Administrative law challenges are a powerful tool for businesses facing unfair or unauthorized agency actions. These proceedings do not require an underlying audit or assessment—they can be initiated proactively to clarify legal obligations or stop improper enforcement efforts. Our firm represents taxpayers in both rule and unadopted rule challenges and has extensive experience litigating these matters before DOAH.