97-004984 Roy Harthern Ministries vs. Department Of Revenue Status: Closed Recommended Order on Thursday, April 9, 1998.

Summary: Department changed construction of statute, Petitioner no longer qualifies for exemption as a "religious organization."

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROY HARTHERN MINISTRIES, INC., )

)

Petitioner, )

)

vs. ) Case No. 97-4984

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

A formal hearing was held by the Division of Administrative

Hearings, before Administrative Law Judge, Daniel M. Kilbride, in

Orlando, Florida, on March 3, 1998. The following appearances

were entered:

APPEARANCES

For Petitioner: Roy Harthern, President

Roy Harthern Ministries, Inc.

Pos t Office Box 915971

Orlando, Florida 32791

For Respondent: Rex D. Ware, Assistant General Counsel

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32314-6668

STATEMENT OF THE ISSUE

Whether Petitioner qualifies for the renewal of a consumer

certificate of exemption as a qualified religious organization

pursuant to Section 212.08(7)(o), Florida Statutes?

PRELIMINARY STATEMENT

Petitioner, Roy Harthern Ministries, Inc. (Petitioner) f iled

an application to renew its consumer certificate of exemption

with Respondent, State of Florida, Department of Revenue

(Respondent), on or about July 18, 1997. On October 13, 1997,

Respondent issued its Notice of Intent to Deny Petitioner's

application based on the grounds that Petitioner did not qualify

as a religious organization. Petitioner filed a Petition for

Formal Administrative Hearing and this matter was referred to the

Division of Administrative Hearings.

At the final hearing, Petitioner p resented the testimony of

Roy Harthern, President of Roy Harthern Ministries. Respondent

called W. David Young as a witness and introduced one joint

exhibit which was accepted into evidence. In addition, the

parties stipulated to certain facts.

A transcript of the proceeding was filed on March 16, 1998.

Respondent timely filed a Proposed Recommended Order on March 25,

1998. Petitioner has not filed proposed findings of facts as of

the date of this order.

FINDINGS OF FACT

1. Petitioner is an active no t-for-profit corporation

organized under the laws of the State of Florida. It maintains

exempt status under Section 501(c)(3) of the Internal Revenue

Code.

2. The Respondent is the state agency charged with the

administration of the tax laws of the State of Florida, including

those dealing with the grant or denial of consumer certificates

of exemption to qualified organizations.

3. Reverend Roy Harthern is an ordained Assembly of God

minister who previously had a career as a minister in several

churches in Texas and Florida, as well as founding a Christian

magazine and a Christian television station in Florida.

4. The Reverend and Mrs. Harthern are evangelists and Bible

teachers. In 1983, Reverend Harthern and his wife, Pauline,

founded the organization from which the Reverend and

Mrs. Harthern practice an itinerant ministry. They preach in

different established churches each week, both inside and outside

of the State of Florida and the United States. In the past,

Reverend Harthern has had a regular religious show on television.

Reverend Harthern also writes, records religious tapes and has a

weekly radio program on a station owned by others. Petitioner

does not have an established physical place of worship at which

nonprofit religious services are regularly held; does not provide

transportation for church members or other services; and does not

provide services to state prisoners. There has been no

substantial change in the type or nature of Petitioner's ministry

since its founding in 1983.

5. Respondent issued a certificate of exemption to

Petitioner in 1983 as a "religious organization." Petitioner has

renewed the exemption, in five-year intervals, ever since.

6. Respondent has never sought to revoke or suspend

Petitioner's exempt status since 1983.

7. On July 18, 1997, Petitioner applied to renew its

consumer certificate of exemption as a "religious organization."

Its previous certificate was issued on October 6, 1992, and was

due to expire on October 5, 1997

8. There has been no su bstantive changes to the

implementing statute during the relevant time period.

9. On October 13, 1997, Respondent issued its Notice of

Intent to Deny to Petitioner on the grounds that Petitioner did

not have an established physical place of worship at which

nonprofit religious services and activities were regularly

conducted.

CONCLUSIONS OF LAW

10. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this cause,

pursuant to Section 120.569 and 120.57(1), Florida Statutes.

11. The Respondent is authorized to issue and reissue tax

exemption certificates to qualified entities pursuant to Section

212.084, Florida Statutes.

12. Petitioner seeks a renewal of its exemption from tax-

based upon the allegation that it qualifies as a "religious

organization" pursuant to Section 212.08(7)(o)2.a., Florida

Statutes, which provides:

2. The provisions of this section

authorizing exemptions from tax shall be

strictly defined, limited, and applied in

each category as follows:

a. "Religious institutions" means churches,

synagogues, and established physical places

for worship at which nonprofit religious

services and activities are regularly

conducted and carried on. The term

"religious institutions" includes nonprofit

corporations the sole purpose of which is

provide free transportation services to

church members, their families, and other

church attendees. The term "religious

institutions" also includes state, district,

or other governing or administrative offices

the function of which is to assist or

regulate the customary activities of

religious organizations or members. The term

"religious institutions" also includes any

nonprofit corporation which is qualified as

nonprofit pursuant to s. 501(c)(3), Internal

Revenue Code of 1986, as amended, which owns

and operates a Florida television station, at

least 90 percent of the programming of which

station consists of programs of a religious

nature, and the financial support for which,

exclusive of receipts for broadcasting from

other nonprofit organizations, is

predominately from contributions from the

general public. The term "religious

institutions" also includes any nonprofit

corporation which is qualified as nonprofit

pursuant to s. 501(c)(3), Internal Revenue

Code of 1986, as amended, which provides

regular religious services to Florida state

prisoners and which from its own established

physical place of worship, operates a

ministry providing worship and services of a

charitable nature to the community on a

weekly basis.

See also , Rule 12A-1.001(3)(c) and (d), Florida Administrative

Code.

13. Tax exemptions are a matter of legislative grace. The

provisions of law which authorize a tax exemption must be

strictly construed against the person claiming the exemption.

Asphalt Pavers, Inc. v. Department of Revenue , 584 So. 2d 55, 57

(Fla. 1st DCA 1991); see also , Department of Revenue v. Skop , 383

So. 2d 678, 680 (Fla. 5th DCA 1980). ("While doubtful language

in taxing statutes should be resolved in favor of the taxpayer,

the reverse is true in construction of exceptions and exemptions

from taxation."); Wanda Marine Corporation v. Department of

Revenue , 305 So. 2d 65, 69 (Fla. 1st DCA 1974) ("tax exemptions

must be strictly construed against the claimant.") As to new

applicants, Respondent is correct.

14. However, the Respondent has also taken the position

that when a certificate expires, the Respondent can require

persons or organizations, who have had a certificate issued

previously, to submit a new application which will be reviewed by

the Respondent under the same guidelines and criteria as a

completely new applicant. In this regard, I must reluctantly

agree since the administrative construction of a statute by the

agency charged with its administration is entitled to great

weight. Consumer Credit Counseling Service of the Florida Gulf

Coast v. Department of Revenue , 22 Florida Law Weekly, D1613

(Fla. 2d DCA, July 2, 1997).

15. However, Respondent has not filed charges against

Petitioner for wrongdoing. The uncontroverted evidence is that

the Petitioner's ministry has not changed since 1983 and neither

has the statute. Respondent is simply refusing to renew the

certificate because it has changed its construction of the

statute. This is unfortunate since Petitioner is clearly

providing a religious service in and out of Florida.

16 Although Petitioner raised issues concerning the

constitutionality of the applicable statute, the Division of

Administrative Hearings does not have the authority to rule on

such issues in this proceeding. See Key Haven Associated

Enterprises, Inc. v. Board of Trustees of the Internal

Improvement Trust Fund , 427 So. 2d 153 (Fla. 1982).

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law,

it is

RECOMMENDED that the Department of Revenue enter a Final

Order denying Petitioner's renewal application for exemption, and

the provisions of Section 212.08(7)(o)2.1., Florida Statutes.

DONE AND ENTERED this 9th day of April, 1998, at

Tallahassee, Leon County, Florida.

____ _______________________________

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of April, 1998.

COPIES FURNISHED:

Roy Harthern, President

Roy Harthern Ministries, Inc.

Post Office Box 915971

Longwood, Florida 32791

Rex D. Ware, Esquire

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32314-6668

Linda Lettera, General Counsel

Department of Revenue

204 Carlton Building

Tallahassee, Florida 32399-0100

Larry Fuchs, Executive Director

Department of Revenue

104 Carlton Building

Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

issue the final order in this case.