99-000494 In His Service vs. Department Of Revenue Status: Closed Recommended Order on Tuesday, May 18, 1999.

Summary: Petitioner applied for sales tax exemption certificate as a church, but evidence did not clearly prove place where regular worship services are conducted. The "church" was a pastor`s home in residential area not zoned for church use.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN HIS SERVICE, )

)

Petitioner, )

)

vs. ) Case No. 99-0494

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

____________________________________)

RECOMMENDED ORDER

On April 13, 1999, a formal administrative hearing was held

in this case in Clearwater, Florida, before J. Lawrence Johnston,

Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Shirley Cole, Pastor

In His Service

5155 20th Avenue, North

St. Petersburg, Florida 33710

For Respondent: Kevin ODonnell, Assistant General Counsel

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32314-6668

STATEMENT OF THE ISSUE

The issue in this case is whether the Petitioner should be

issued a sales tax exemption certificate either as a "church" or

as a "religious organization."

PRELIMINARY STATEMENT

On December 28, 1998, the Respondent, the Departme nt of

Revenue (DOR), denied the application of the Petitioner, In His

Service, for a sales tax exemption certificate either as a

"church" or as a "religious organization," and the Petitioner

requested a formal administrative proceeding. DOR referred the

matter to the Division of Administrative Hearings (DOAH) on

February 1, and final hearing was scheduled for April 13, 1999,

in Clearwater, Florida.

At final hearing, Shirley Cole testified as the Petitioner's

pastor, and had Petitioner's Exhibits 1 through 3 admitted in

evidence. DOR called one witness and had Respondent's Exhibits 1

through 4 admitted in evidence. DOR requested a transcript of

the final hearing, and the parties were given ten days from the

filing of the transcript in which to file proposed recommended

orders. The Transcript was filed on April 22, 1999.

FINDINGS OF FACT

1. The Petitioner, In His Service, is a not-for-profit

organization formed to give structure to a Bible study and prayer

group Shirley B. Cole leads. Cole is the Petitioner's "pastor,"

but she is not ordained, does not officiate at weddings or

funerals, and has no formal religious training other than

participation in similar study groups in the past.

2. The Petitioner is affiliated with an organization called

the Federation of Independent Churches, which has an office on

East Bird Street in Tampa, Florida. (In a post-hearing

submission, Cole asserted that the Petitioner's "outreach is from

Greater Ministries International, basically functioning as a

satellite church, but there was no evidence regarding Greater

Ministries International.) Portions of the Petitioner's by-laws

were admitted in evidence at the final hearing. The by-laws make

reference to three officers--president, vice-president, and

secretary-treasurer--but Cole testified that she was the

secretary and that someone else was the treasurer, and she did

not seem to know anything about a president or vice-president.

In addition, while the by-laws refer to a board of directors and

meetings of the board of directors, Cole does not know anything

about either.

3. The Petitioner is small (not more than 15 members). It

consists primarily of Cole and her friends and neighbors and some

others who hear about the meetings. The group has met in various

locations, including Cole's home at 5155 20th Avenue North, St.

Petersburg, Florida, and the homes of other members of the group.

In addition to Bible study and prayer, the group discusses health

issues and other topics of interest and shares reading materials

and tapes on topics of interest. From time to time, the group

collects items of donated personal property for the use of

members of the group and others in need who could use the items.

4. In late June 1998, the Petitioner applied for a sales

tax exemption certificate as a church. In response to a question

from a representative of the Respondent DOR Cole stated that the

Petitioner held services in her home every Thursday from 7:30 to

9:30 or 10 p.m.

5. A DOR representative attempted to confirm Cole's

representation by attending a meeting in Cole's home on Thursday,

October 8, 1998, but no services were being held there, and no

one was home. If there was a meeting on that day, it was held

somewhere else.

6. On or about December 28, 1998, DOR issued a Notice of

Intent to Deny the Petitioner's application because the

Petitioner did not have "an established physical place of worship

at which nonprofit religious services and activities are

regularly conducted and carried on."

7. In January 1999, Cole requested an administrative

proceeding on the Petitioner's application, representing that she

was holding the Petitioner's meetings at her home every Monday

from 7:30 p.m.

8. On Monday, April 5, 1999, a DOR representative visited

Cole's home at 7:30 or 7:35 p.m., but no one was home. At final

hearing, Cole testified that she went to pick someone up to

attend the meeting and was late returning.

9. Cole had an April 1999 newsletter admitted in evidence.

It indicates that she holds weekly Bible study meetings on

Mondays at her home. It also indicates: "The week of April 19th

will be our maintenance [health] meeting." It also indicates

that the Monday, April 26, 1999, meeting would be a "covered dish

dinner with prayer and praise fellowship afterward."

10. Cole also had a book/tape loan check-out list admitted

in evidence. The list indicates that two items were checked out

on January 21, one on February 8, two on February 14, one on

February 15, one on March 8, one on March 21, two on March 22,

one on April 4, one on April 5, and four on April 12, 1999. (Two

entries dated April 13 precede two on April 12, so it is assumed

that all were on April 12, 1999).

11. Cole owns her home, pays the taxes, and pays the

utility bills. Cole also claims a homestead exemption. There

are no signs, no physical attributes, or anything else that would

identify Cole's house as a church. No part of the home is set

aside for the Petitioner's exclusive use. The Petitioner pays no

rent to Cole and does not reimburse Cole for any of her expenses

(such as taxes and utility bills) of home ownership.

12. Under local City of St. Petersburg zoning ordinances,

Cole would have to obtain a special exception from the

Environmental Development Commission to use her home as a church.

Cole has not attempted to do so. Had she tried, the special

exception would be denied because her home does not meet the

ordinance's minimum lot and yard size criteria for such a special

exception. (It is not clear whether Cole's home would meet the

ordinance's parking, maximum floor area ratio, and maximum

surface ratio criteria for a special exception for a church.)

13. In light of past discrepancies between the Petitioner's

representations and the facts, it was not clear from the evidence

presented in this case that meetings have taken place, are taking

place, or will take place in Cole's home on a regular basis.

CONCLUSIONS OF LAW

14. In pertinent part, Section 212.08, Florida Statutes

(1997), provides for the following exemption from sales tax:

(o) Religious, charitable, scientific,

educational, and veterans' institutions and

organizations.--

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;

* * *

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.

15. Florida Administrative Code Rule 12A-1.001(3) provides

in pertinent part:

(3) RELIGIOUS, EDUCATIONAL, CHARITABLE,

VETERANS' AND SCIENTIFIC ORGANIZATIONS, HOMES

FOR THE AGED, NURSING HOMES OR HOSPICES,

FEDERAL AND STATE CHARTERED CREDIT UNIONS,

FLORIDA RETIRED EDUCATORS ASSOCIATION AND

LOCAL CHAPTERS, ORGANIZATIONS PROVIDING

SPECIAL EDUCATIONAL AND SOCIAL BENEFITS TO

MINORS, STATE THEATER CONTRACT ORGANIZATIONS,

MILITARY MUSEUM FUNDRAISERS, COAST GUARD

AUXILIARIES, AND CEMETERY ASSOCIATIONS.

(a) A sale or lease directly to or sales or

leases of tangible personal property by

churches, or a sale or lease directly to

nonprofit religious, nonprofit educational,

nonprofit charitable institutions, and

veterans' organizations, for use in the

course of their customary nonprofit

religious, nonprofit educational, nonprofit

charitable activities, and for use by

veterans' organizations, including church

cemeteries, are exempt from the tax imposed

by Chapter 212, F.S. . . .

* * *

(c) '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.

(d) 'Religious institutions' means

churches, synagogues, and established

physical places for worship at which

nonprofit religious services and activities

are regularly conducted and carried on.

16. The statute and rule also provide for sales tax

exemptions for certain "religious institutions" other than

"churches, synagogues, and established physical places for

worship at which nonprofit religious services and activities are

regularly conducted and carried on." But the Petitioner does not

seek an exemption under any of those provisions. The issue is

whether the Petitioner is a "church," as defined by the statute

and rule-- i.e. , whether the Petitioner is an "established

physical [place] for worship at which nonprofit religious

services and activities are regularly conducted and carried on."

17. In deciding the issue, consideration must be given to

the rule of statutory interpretation that provisions for tax

exemptions must be strictly construed against the person claiming

the exemption. See Asphalt Pavers, Inc., v. Dept. of Revenue ,

584 So. 2d 55, 57 (Fla. 1st DCA 1991); Dept. of Revenue v. Skop ,

383 So. 2d 678, 680 (Fla. 5th DCA 1980); Wanda Marine Corp. v.

Dept. of Revenue , 305 So. 2d 65, 69 (Fla. 1st DCA 1974). The

Petitioner has the burden to prove entitlement to the exemption.

Green v. Pederson , 99 So. 2d 292, 296 (Fla. 1957). Proof of

entitlement requires proof of all of the criteria for exemption.

Final Order, Gainesville Amateur Radio Society, Inc. v. Dept. of

Revenue , DOAH Case No. 94-1200, (DOR 1995).

18. In this case, the evidence was not clear, in light of

past discrepancies between the Petitioner's representations and

the facts, whether meetings have taken place, are taking place,

or will take place in Cole's home on a regular basis. In

addition, it is clear that the meeting place which is the basis

of the Petitioner's claim for exemption is, simply put, Shirley

Cole's home. It is not a church and, under local law, cannot be

a church.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the DOR enter a final order denying the

Petitioner's application for a tax exemption certificate.

DONE AND ENTERED this 18th day of May, 1999, in Tallahassee,

Leon County, Florida.

___________________________________

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32 399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 18th day of May, 1999.

COPIES FURNISHED:

Shirley Cole, Pastor

In His Service

5155 20th Avenue, North

St. Petersburg, Florida 33710

Kevin ODonnell, Assistant General Counsel

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.