Were soft-drink vending sales exempt when a religious organization had federal church status but Florida certificates labeled it charitable?

Subject

Churches - Vending Machine Sales

Plain-English summary

The organization's vending-machine receipts were taxable because its Florida consumer exemption certificates identified it as a charitable organization, not as a church. That was true even though federal authorities had recognized the organization as a church or association of churches and it maintained Florida places of worship with regular services.

The Department recommended applying for a Florida consumer's certificate of exemption specifically designating the organization as a church. If issued, the vending sales would become exempt beginning on that certificate's effective date.

What this means for you

Federal church recognition and actual worship activity did not substitute for the state certificate category required by the ruling.

Common questions

Q: Were the vending receipts exempt under the existing charitable certificates? No.

Q: Did federal church status automatically create the Florida vending exemption? No.

Q: When would the vending exemption begin? On the effective date of a Florida certificate designating the organization as a church.

Citations and references

• Fla. Stat. § 212.08(7)(o) — sales by churches
• Fla. Admin. Code r. 12A-1.001(3)(a), (c) — church exemption and definition
• Fla. Admin. Code r. 12A-1.044(8)(a) — church-owned vending machines
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-060

Original ruling text

Sep 03, 1993

RE: TAA 93A-060
Sales Tax; Churches - Vending Machine Sales
s. 212.08(7)(o), F.S.
Rules 12A-1.001(3)(a),(c); 12A-1.044(8)(a), F.A.C.

Dear:

This is in response to your letter dated April 7, 1993, in
which you have provided the proper documentation authorizing you
to request a Technical Assistance Advisement (TAA) on behalf of
your client, the XXX (hereinafter [Organization]), based on the
facts and circumstances presented in your letter dated January
19, 1993. The following facts extracted from your letter dated
January 19, 1993, are pertinent to this response:

"... one soft drink vending machine... is owned and
operated solely by [Organization]....

"[Organization]... applied to the Commissioner of Internal
Revenue in the U.S. Treasury Department for a ruling
holding that [Organization] was a church in its own right
or a convention or association of churches referred to in
section 170(b)(1)(A)(i) of the Internal Revenue Code of
1954. In granting the [Taxpayer's] request for such
status, the U.S. Treasury Department stated...:

"... The evidence submitted discloses that [Organization]
has a distinct legal existence, a recognized creed and form
of worship, a definite and distinct ecclesiastical
government, a formal code of doctrine and discipline, a
distinct religious history, a membership not associated
with any church or denomination, a complete organization of
ordained ministers ministering to their congregations,
ordained ministers selected after completing prescribed
courses of study, a literature of its own, established
places of worship, regular congregations, regular religious
services, Sunday Schools for the religious instruction of

the young, and schools for the preparation of its
ministers....

"A copy of the Treasury Department's Revenue Ruling 59-129
implementing its letter is attached... Also attached are
three subsequent rulings issued by the Internal Revenue
Service holding that the [Organization] is a church or a
convention or association of churches as those terms are
defined in the Internal Revenue Code...I am enclosing
several photographs of the worship facilities existing and
used within the premises of [Taxpayer's] facility in XXX.
The facilities pictured are referred to as the `Chapel' by
the officers of the [Organization] and those persons
resident in [Taxpayer's facility], and formal services are
held in the Chapel at least once a week and on significant
Christian religious holidays.

"I hereby apply for exempt status from Florida sales and
use taxes arising from the installation and sale of soft
drinks through the single soft drink vending machine that
was purchased by the applicant and placed within the
premises of [Organization's facilities]. The legal grounds
for this request are contained within the following:

"1. Section 12A-1.044(8)(a), Florida Administrative Code,
which states: []Receipts from amusement and vending machines owned and operated by churches or synagogues are not taxable. The church or synagogue is not required to post a notice, as required above on amusement or vending machines.[']... "2. ... Section 12A-1.001(3)(c), which states: []"Church"
means a religious institution having an established
physical place of worship where persons regularly assemble
for worship and instruction for religious purposes.[']...
"3. Section 212.08(7)(o)1., Florida Statutes, which states:
[`]There are exempt from the tax imposed by this part
transactions involving: a. Sales or leases directly to
churches or sales or leases of tangible personal property
by churches;['] ..."

REGULATORY AUTHORITY

Rule 12A-1.001(3)(a), F.A.C., provides in part:

"(a) A sale or lease directly to or...by churches ...are
exempt from the tax imposed by Part I, Chapter 212, F.S....
However, such institutions or organizations desiring to
qualify for the exemption must obtain from the Department
of Revenue a consumer's certificate of exemption[.]..."

DETERMINATION

Rule 12A-1.001(3)(a), F.A.C., provides that a church is not
subject to taxes imposed under Part I, Chapter 212, F.S. on
purchases or sales of tangible personal property; however, the
church is required to obtain a consumer's certificate of
exemption to qualify for the exemption.

The Department of Revenue has issued consumer's
certificates of exemption to [Organization] for the various
facilities that [Organization] operates in Florida, including
the facility located in XXX. However, these certificates
designate [Organization] as a charitable organization and not a
church. Therefore, the exemption from tax on receipts from
vending machines as provided in Rule 12A-1.044, F.A.C., does not
apply to [Organization] and receipts from the vending machine
located at the facility in XXX are subject to sales tax.

Based on the fact that [Organization] is determined to be a
church or an association or convention of churches by the
Internal Revenue Service and that [Organization] has established
physical places of worship in this state at which persons
regularly assemble for worship and religious instructions, it is
recommended that [Organization] apply to the Department of
Revenue for a consumer's certificate of exemption which
designates [Organization] as a church. [Organization] should
contact the Bureau of Registration and Records, Application
Acceptance, 5050 West Tennessee Street, Tallahassee, Florida
32399-0100 (904)488-9750, for further instructions in obtaining
the certificate. If [Organization] is issued a consumer's
certificate of exemption as a church, [Organization] will be
exempt from sales tax on receipts from vending machine sales as

of the effective date of that consumer's certificate of
exemption.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only
under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the
statutes or rules upon which this advice is based may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response and your request
are public records under Chapter 119, F.S., which are subject to
disclosure to the public under the conditions of s. 213.22, F.S.
Your name, address, and any other details which might lead to
identification of the taxpayer must be deleted by the Department
before disclosure. In an effort to protect the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

Sharon Gallops
Technical Assistant

SG/pb
Cont. #8222