97-005993 Dotas, Inc. vs. Department Of Revenue Status: Closed Recommended Order on Tuesday, May 5, 1998.

Summary: Applicant, which held nonprofit worship service on a regular basis at an "established physical place of worship," is entitled to tax exemption.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DOTAS, INC., )

)

Petitioner, )

)

vs. ) Case No. 97-5993

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a Section 120.57(1) hearing was held in

this case on March 20, 1998, by video teleconference at sites in

Miami and Tallahassee, Florida, before Stuart M. Lerner, a duly

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Pastor Morris J. Mays, President

DOTAS, Inc.

Post Office Box 552512

Miami, Florida 33055-2512

For Respondent: Rex D. Ware, Esquire

Department of Revenue

Office of the General Counsel

Post Office Box 6668

Tallahassee, Florida 32314-6668

STATEMENT OF THE ISSUES

Whether Respondent is entitled to a Consumer Certificate of

Exemption under Section 212.08, Florida Statutes.

PRELIMINARY STATEMENT

On December 9, 1997, the Department of Revenue (Department)

mailed to Petitioner a Notice of Intent to Deny (Notice) advising

that, for the following reasons, it intended to deny Petitioner's

application for a Consumer Certificate of Exemption pursuant to

Section 212.08, Florida Statutes:

1. Your organization does not have an

established physical place of worship at

which nonprofit religious services and

activities are regularly conducted and

carried on.

2. Your organization is not a state,

district, or other governing or

administrative office the function of which

is to assist or regulate the customary

activities of religious organizations or

members.

3. Your organization fails to meet the

qualifications for exemption from sales and

use taxation, as set forth in Section

212.08(7), Florida Statutes.

Petitioner, by letter dated December 12, 1997, requested a

Section 120.57(1) hearing on the Department's proposed action.

In its letter, Petitioner indicated that it "dispute[d] items (1)

and (3)" of the Department's Notice and further stated the

following:

Under [Section 212.08(7)(o)2.a., Florida

Statutes, DOTAS, INC., has only to meet one

(1) of the numbered criteria to qualify as a

religious exempt organization. DOTAS, INC

meets every Sunday for two hours at Gibson

Park for regular services as you are already

aware of. Gibson Park is an established

physical place for worship and we have many

visitors each Sunday.

On December 29, 1997, the Department referred the instant matter

to the Division of Administrative Hearings (Division) for the

assignment of a Division administrative law judge to conduct the

Section 120.57(1) hearing Respondent had requested.

As noted above, the Section 120.57(1) hearing was held on

March 20, 1998. Pastor Morris Mays, Petitioner's President, was

the only witness to testify at the hearing. In addition to

Pastor Mays' testimony, eight exhibits (Petitioner's Exhibits 1,

2, 3, 4 and 5 and Respondent Exhibits 1, 2a and 2b) were offered

and received into evidence.

At the conclusion of the evidentiary portion of the hearing,

the undersigned, on the record, advised the parties that the

deadline for the filing of proposed recommended orders was 15

days from the date of the Division's receipt of the transcript of

the hearing. The hearing transcript was filed with the Division

on April 15, 1998. Petitioner filed a proposed recommended

orders on April 10, 1998, which the undersigned has carefully

considered. On May 1, 1998, the undersigned received a copy of a

letter from counsel for the Department to Petitioner advising

that the Department did not "intend to file a Proposed

Recommended Order" inasmuch as the Department, based upon Pastor

Mays' sworn testimony at the final hearing, had "changed its

position" regarding Petitioner's entitlement to a Consumer

Certificate of Exemption.

FINDINGS OF FACT

Based upon the evidence adduced at hearing and the record as

a whole, the following findings of fact are made:

1. Respondent is a nonprofit Florida corporation that was

formed in 1996 to serve the religious needs of persons living in

Miami-Dade County's Overtown community, including, in particular,

the homeless and young people in the area.

2. Article II of Petitioner's Articles of Incorporation,

which were filed with the Florida Department of State on May 10,

1996, sets forth the "purpose of the corporation" as follows:

The Corporation is organized exclusively for

charitable, religious, educational, and

scientific purposes, including, for such

purposes, the making of distributions to

organizations that qualify as exempt

organizations under section 501(c)(3) of the

Internal Revenue Code, or the corresponding

section of any future federal tax code.

3. Petitioner's by-laws reflect that it is a "full-gospel

ministry" comprised of "Christian believers."

4. Its "civil officers" include a President, who also

serves as the Pastor of the Gibson Park Church, which Petitioner

operates.

5. Gibson Park, after which the Gibson Park Church is

named, is a park located in Overtown. It has, among other

things, an open-air amphitheater, with a stage.

6. Morris Mays is presently the President of Petitioner and

Pastor of the Gibson Park Church.

7. He resides in an apartment (apartment number 18) that he

leases in his own name from the Church of God in Christ at 1767

Northwest Third Avenue in Miami-Dade County (Pastor Mays'

Apartment).

8. Pastor Mays' apartment presently serves as Petitioner's

headquarters, as a sign in the window of the apartment reflects.

Petitioner hopes to purchase, and move its headquarters to, a

building across the street from Gibson Park. (The owner of the

building has expressed, in writing, an interest in selling the

building to Petitioner.)

9. Pastor Mays donates the use of his apartment, and also

volunteers his time, to Petitioner.

10. There are other individuals, besides Pastor Mays, who

help carry out the purposes of Petitioner. Like Pastor Mays,

they also volunteer their time and are not compensated.

11. Petitioner regularly conducts nonprofit worship and

prayer services and other religious activities at Pastor Mays'

apartment on Wednesday evenings and at the amphitheater in Gibson

Park on Sundays. 1

12. Petitioner has been conducting Sunday morning services

at the Gibson Park amphitheater since it received written

permission from the City of Miami to do so in the late summer of

1997.

13. These Sunday morning services (at which Pastor Mays

preaches) are open to the general public and are advertised in a

newsletter that Petitioner publishes and distributes in the

Overtown community. The services are attended, on the average,

by approximately 50 people, many of whom are homeless.

14. Every other Sunday, following regular morning services,

Petitioner, with the help of guest "DJs," conducts special youth

services.

15. Wednesday evening services at Pastor Mays' apartment

are less formal and shorter than Sunday morning services. They

are not publicized in Petitioner's newsletter. Attendance

averages only about seven to ten people.

CONCLUSIONS OF LAW

16. The Department is authorized, pursuant to Section

212.084, Florida Statutes, to issue (and reissue) to qualified

institutions, organizations and individuals tax exemption

certificates that are valid for five years.

17. Petitioner has applied for such a certificate from the

Department. It claims that its application should be granted

because it is a "church" or "religious institution," within the

meaning of Section 212.08(7)(o), Florida Statutes, which

provides, in pertinent part, as follows:

1. There are exempt from the tax imposed by

this chapter transactions involving:

a. Sales or leases directly to churches or

sales or leases of tangible personal property

by churches; [and]

b. Sales or leases to nonprofit religious

. . . institutions when used in carrying on

their customary nonprofit religious . . .

activities, including church

cemeteries . . . .

2. The provisions of this section

authorizing exemptions shall be . . . 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 "church, as used in Section 212.08(7)(o), Florida

Statutes, is defined in Rule 12A-1.001(3)(c), Florida

Administrative Code, as follows:

"Church" means a religious institution having

an established physical place of worship

where persons regularly assemble for worship

and instruction for religious purposes.

Religious organizations whose functions are

radio or television broadcasting or those

organizations conducting services for short

periods of time at temporary locations, and

religious associations that provide

administrative functions only, are not

considered to be churches. 2/

18. "The provisions of . . . [S]ection [212.08(7)(o),

Florida Statutes, authorizing tax exemptions must] be strictly

defined, limited and applied." Section 212.08(7)(o)2b, Florida.

Statutes; see also Asphalt Pavers, Inc. v. Department of

Revenue , 584 So. 2d 55, 57 (Fla. 1st DCA 1991)("[A]n exemption

clause in a tax statute is to be strictly construed against the

person claiming the exemption."); 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 the construction of exceptions and

exemptions from taxation."); Wanda Marine Corporation v.

Department of Revenue , 305 So. 2d 65, 69 (Fla. 1st DCA

1974)("[T]ax exemptions must be strictly construed against the

claimant.").

19. The burden was on Petitioner, at the final hearing held

in this case, to establish, by a preponderance of the evidence,

that it is a "church" or "nonprofit religious institution,"

within the meaning of Section 212.08(7)(o), Florida Statutes,

entitled to the tax exemption certificate it is seeking. See

Department of Banking and Finance v. Osborne Stern and Company ,

670 So. 2d 932, 934 (Fla. 1996); Pershing Industries, Inc. v.

Department of Banking and Finance , 591 So. 2d 991, 994 (Fla. 1st

DCA 1991); Department of Transportation v. J.W.C. Company, Inc. ,

396 So. 2d 778, 787-88 (Fla. 1st DCA 1981); Section 120.57(1)(h),

Florida Statutes("Findings of fact shall be based on a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute.").

20. Petitioner met its burden of proof. It demonstrated

that it regularly conducts nonprofit worship and prayer services

and other religious activities and does so at an "established

physical place of worship" (Pastor Mays' apartment on Wednesday

evenings and the Gibson Park amphitheater on Sundays) 3/ at

which persons gather to participate in these activities.

21. Because Petitioner has established that it qualifies as

a tax-exempt "church" and "nonprofit religious institution,"

within the meaning of Section 212.08(7)(o), Florida Statutes, its

application for a Consumer Certificate of Exemption should be

granted.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department enter a final order finding

that Petitioner is entitled to the Consumer Certificate of

Exemption it is seeking pursuant to Section 212.08(7)(o), Florida

Statutes.

DONE AND ENTERED this 5th day of May, 1998, in Tallahassee,

Leon County, Florida.

___________________________________

STUART M. LERNER

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 5th day of May, 1998.

ENDNOTES

1 Petitioner also engages in nonprofit charitable and educational

activities. It is unnecessary, however, to detail these

activities because Petitioner is seeking an exemption based upon

its status as a "church or "nonprofit religious institution" and

does not claim that it should receive an exemption because it is

a "nonprofit charitable . . . or nonprofit educational

institution."

2 While this definition has been criticized as being "not

entirely consistent with the statutory scheme of Section

212.08(7)(o)1[, Florida Statutes, wherein] the Legislature

distinguished between 'churches' and 'religious institutions' and

explicitly required only that the latter must be 'established

places of worship'" ( 2 Christ-- The Solution, Inc. v. Department

of Revenue , DOAH Case No. 94-4075 (DOAH December 20,

1994)(dictum)), it has not been invalidated pursuant to the rule

challenge provisions of Chapter 120, Florida Statutes, and

therefore must be applied in determining whether Petitioner is a

"church," within the meaning of Section 212.08(7)(o), Florida

Statutes. See Gadsen State Bank v. Lewis , 348 So. 2d 343, 345

n.2 (Fla. 1st DCA 1977)("[A]gencies must honor their own

substantive rules until . . . they are amended or abrogated.").

3 Neither Section 212.08, Florida Statutes, nor Rule 12A-1.001,

Florida Administrative Code, requires that a "physical place of

worship" be an enclosed structure (as opposed to an open-air

facility). Cf . Roberts v. Atlanta Baptist Association, Inc. , 241

S.E. 2d 224, 227-28 (Ga. 1978)(for purpose of determining

entitlement to exemption from ad valorem taxation "place" need

not be building to qualify as "place of worship"); Kerville

Independent School District v. Southwest Texas Encampment

Association , 673 S.W. 2d 256, 258 Tex. Ct. App. 1984)("The

Constitution permits the legislature to exempt from taxation

actual places of worship, but fails to define the term. The

legislature's definition, of course, must constitute a reasonable

interpretation of the constitutional language in order to

implement the intent of the constitutional framers. . . . Our

Supreme Court in Davies v. Meyer , 541 S.W. 2d 827 (Tex.1976),

. . cited Church v. Bullock , 104 Tex. 1, 109 S.W. 115 (1908),

in which the court defined the phrase as follows: 'As used in

the Constitution the phrase place of worship specifically means a

place where a number of persons meet together for the purpose of

worshipping God. . . . The worship of God is not prohibited in

any place, but we are of the opinion that the spirit of the

Constitution would include any place at which the worship might

be indulged in so continuously and in such a manner as to give it

the character of a place of worship.'. . . It is evident that

the court in Church did not limit an 'actual place of worship' to

an enclosed structure. This is confirmed in the Davies decision

in that the court affirmed the trial court in its decision that

an open-air chapel and one-acre surrounding it was exempt.").

COPIES FURNISHED:

Pastor Morris J. Mays, President

DOTAS, Inc.

Post Office Box 552512

Miami, Florida 33055-2512

Rex D. Ware, Esquire

Department of Revenue

Office of the General Counsel

Post Office Box 6668

Tallahassee, Florida 32314-6668

Larry Fuchs, Executive Director

Department of Revenue

104 Carlton Building

Tallahassee, Florida 32399-1050

Linda Lettera, General Counsel

Department of Revenue

204 Carlton Building

Tallahassee, Florida 32399-1050

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.