What did the original Florida TAA 95A-040 say about a religious broadcaster's merchandise sales, and why must revised TAA 95A-040R control?

Plain-English summary

The original ruling required the nonprofit religious broadcaster to collect sales tax on its tangible-property sales, but the official source points to a revision that changed the outcome.

The organization already qualified as a religious institution and held a consumer's certificate of exemption for purchases. The original record, however, described its corporate purpose as operating a Christian broadcasting system and left unclear whether the entity conducting worship services was the same legal entity.

The Department therefore found that the organization had not established the narrower status of a church, which the ruling described as necessary for the exemption on a religious organization's own sales. It required tax on taxable merchandise.

Revised TAA 95A-040R later considered amended corporate purposes and clarified regular public worship at the station facility. That revised ruling treated the organization as a church and exempted its tangible-property sales.

What this means for you

This page preserves the original fact record and reasoning. The revised TAA is the Department's later answer and must control any reading of the request.

Common questions

Q: What did the original ruling conclude?
A: The organization had to collect and remit sales tax on taxable tangible-property sales.

Q: Why was its religious-institution certificate not enough?
A: The ruling distinguished the purchase exemption for religious institutions from the sales exemption for churches.

Q: Did the Department believe the original record proved church status?
A: No. The corporate purposes focused on broadcasting, and the identity of the worship-services entity was unclear.

Q: Is the original conclusion final?
A: No. Revised TAA 95A-040R considered additional facts and reached the opposite result.

Citations and references

• Fla. Stat. § 212.08(7)(o) — churches and religious institutions
• Fla. Admin. Code r. 12A-1.001(3) — exempt organizations and definition of church
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95A-040

Original ruling text

Status: Reference TAA 95A-040R issued November 13, 1995

Aug 10, 1995

Re: Technical Assistance Advisement 95(A)-040
Sales by a Nonprofit Religious Institution Which Holds a
Valid Consumer's Certificate of Exemption
s. 212.08(7)(o), F.S.
Rule 12A-1.001(3), F.A.C.
Taxpayer: XXX
FEI#: XXX
Consumer's Certificate of Exemption#: XXX

Dear

This response is to your petition of April 12, 1995, requesting
the Department's issuance of a Technical Assistance Advisement
(TAA) pursuant to s. 213.22, F.S., and Ch. 12-11, F.A.C.,
regarding the referenced Taxpayer and matter. The Department
has carefully examined your request and supporting documents and
finds them to be in order. Therefore, the Department is hereby
issuing the requested TAA.

DISCUSSION OF FACTS

Your letter and supporting documents impart the following
information relevant to the issue under advisement herein:

"[Taxpayer] is a Florida corporation not-for-profit, exempt
from federal income taxes under Section 501(c)(3) of the
Internal Revenue Code, and exempt from Florida sales and
use taxes pursuant to its Consumer['s] Certificate of
Exemption (see copy attached as Exhibit 2). The activities
of [Taxpayer] include broadcasting of religious television
programming, the conduct of regular worship services,
benevolence activities, and other ancillary activities in
keeping with its religious purpose. Based on the
information submitted with [Taxpayer's] most recent

application for renewal of its Consumer['s] Certificate of
Exemption, the Department of Revenue (the Department') determined that [Taxpayer] is a religious institution as defined in the Florida sales tax statutes. [Taxpayer] submitted information with its application demonstrating that it qualified as areligious institution' in two
distinct ways: (1) it meets the criteria set forth in
Section 212.08(7)(o)2.a., F.S., regarding having a
`physical place for worship' at which nonprofit religious
services are carried on, and (2) it meets the criteria set
forth in that same subsection regarding owning and
operating a Florida television station, 90% of the
programming of which is religious, and is predominately
publicly supported. (See copy of Application materials
submitted attached as Exhibit 3). The conduct of religious
worship services is not, however, the sole or dominant use
of [Taxpayer's] building facilities.

Article II. of the Taxpayer's Articles of Incorporation provides
its "Purposes" in the following manner:

"The general nature of the objects and purposes of this
corporation shall be to provide an independent,
incorporated group, not for profit, for the establishment
and operation of a Christian broadcasting and telecasting
system, founded upon and tested by Bible Principles to the
end that through the Holy Spirit all people may be better
prepared for living the abundant life of the Lord Jesus
Christ."

A written statement regarding worship services included in
support of your request provides the following:

"... meets every 2nd and 4th Thursday mornings from 10:00
A.M. - 12:00 P.M. Each meeting includes praise and worship
music and special singing. We feature different speakers
anointed to teach the Bible and minister to those who may
have need...."

The entity providing these services has a name other than the
Taxpayer's and it is not clear from the information provided

whether this entity is the same legal entity as the Taxpayer.

REQUESTED ADVISEMENT

You request the Department's ruling in the following issue:

"The issue in question is whether [Taxpayer] is required to
collect from purchasers and remit to the Department sales
taxes on sales of tangible personal property made by
[Taxpayer]. The determination of this issue hinges upon
whether [Taxpayer] is considered a `church' for sales tax
purposes."

DISCUSSION OF LAW

The following statutory, administrative, and case law is
relevant to the issue under advisement herein:

Section 212.08(7)(o), F.S.: "(o) Religious, charitable,
scientific, educational, and veterans' institutions and
organizations.
"1. 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;
"b. Sales or leases to nonprofit religious, nonprofit
charitable, nonprofit scientific, or nonprofit educational
institutions when used in carrying on their customary
nonprofit religious, nonprofit charitable, nonprofit
scientific, or nonprofit educational activities, including
church cemeteries;....
"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 termreligious
institutions' includes nonprofit corporations the sole
purpose of which is to 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 termreligious institutions' also includes any
nonprofit corporation which is qualified as nonprofit
pursuant to s. 501(c)(3), United States Internal Revenue
Code, 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 predominantly from contributions from the
general public."
(Emphasis Supplied)

The Department in construing the above statutory exemptions for
"churches" and "religious institutions" must adhere to, and be
guided by, the long-standing and fundamental precept of
statutory construction, established by the Florida Supreme
Court, which mandates that exemptions from, or exceptions to,
taxing statutes are special privileges granted by the
legislature and must be strictly construed against the taxpayer
and in favor of the administering agency. See Asphalt Pavers v.
Dept. of Revenue, 584 So.2d 57 (Fla. 1 DCA 1991); Dade Cty.
Taxing Auth. v. Cedars of Lebanon, 355 So.2d 1205 (Fla. 1978);
Williams v. Jones, 326 So.2d 425 (Fla. 1975); Straughn v. Camp,
293 So.2d 689 (Fla. 1974); United States Gypsum Company v.
Green, 110 So.2d 409 (Fla. 1959).

The Department is empowered to promulgate and adopt
administrative law to interpret the provisions of the statutes
it is charged by the Legislature to administer and enforce. The
following rule provisions were promulgated and adopted by the
Department to interpret the above statutory exemptions for
churches and religious institutions:

Rule 12A-1.001(3), F.A.C., provides: "(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 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, and payment must be
made directly to the dealer by the exempt entity. See
subparagraph (9)(d)2. of this rule for a suggested document
to be provided the dealer by an employee who has been
authorized to make purchases on behalf of a nonprofit
organization when payments are made directly to the dealer
by the exempt entity. This exemption shall not inure to
any transaction otherwise taxable when payment is made by
an exempt entity's employee by any means, including but not
limited to, cash, check, or credit card, when that employee
is subsequently reimbursed by the exempt entity. See Rules
12A-1.038 and 12A-1.039, F.A.C.
"(b) Sales or rentals of tangible personal property,
rentals or leases of transient rental accommodations,
rentals or leases of real property, rentals or leases of
parking, docking, or tie down spaces, admissions, or other
transactions subject to the tax imposed by Part I, Chapter
212, F.S., made by exempt entities, with the exception of
sales or leases of tangible personal property by churches,
are taxable. Such entities are required to register in the
same manner as other dealers and collect and remit tax on
transactions which are subject to the tax imposed by Part
I, Chapter 212, F.S. For admission charges imposed by
not-for-profit sponsoring organizations qualifying under
the provisions of s. 501(c)(3) of the U.S. Internal Revenue

Code, see Rule 12A-1.005(3)(g), F.A.C.
"(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. The term `religious
institutions' includes:
"1. Nonprofit corporations, the sole purpose of which is to
provide free transportation services to church members,
their families, and other church attendees.
"2. State, district, or other governing or administrative
offices whose function is to assist or regulate the
customary activities of religious organizations or members
within the state or district organization.
"3. Any corporation qualified as nonprofit pursuant to s.
501(c)(3), United States Internal Revenue Code, 1986, as
amended, that owns and operates a Florida television
station of which 90 percent of the station's programming
consists of programs of a religious nature. In addition,
in excess of 50 percent of the financial support for the
corporation, exclusive of receipts for broadcasting from
other nonprofit organizations, must come from contributions
from the general public."

Agencies are afforded wide discretion in the interpretation of
statutes which they administer, and such interpretation will not
be overturned on appeal unless clearly erroneous; reviewing
court will defer to any interpretation within the range of
possible interpretations by the administering agency. Dyer v.
Department of Ins. and Treasurer, 585 So.2d 1009 (Fla. 1 DCA
1991); Natelson v. Department of Ins., 454 So.2d 31 (Fla. 1 DCA
1984), reh. den. Sept. 6, 1984.

Administrative rules interpreting sales and use tax statute are
accorded considerable persuasive force and court would not
depart from such constructions unless clearly erroneous or
unauthorized. State Ex Rel. Szabo Food Serv., Inc. of N.C. v.
Dickinson, 286 So.2d 529 (Fla. 1973), reh. den. Jan. 9, 1974.

The practical construction placed upon a statute by an
administrative department of state government, when not in
conflict with the constitution or the plain intent of the
legislative act especially when established by long usage, is
entitled to great persuasive force and efficacy, and the court
will not depart from such construction except for the most
cogent reasons. Green v. Hood, 120 So.2d 223 (Fla. 2 DCA 1960).

In the matter of Christian Television Corporation, Inc. v.
Department of Revenue, State of Florida, Case No. 86-0456 (Jan.
5, 1987) the Department issued a final order ruling that the
organization did qualify to have its Consumer's Certificate of
Exemption renewed as a "religious institution". At that time,
the statute did not contain the current provisions which
specifically include Christian television stations which meet
certain criteria within the definition of "religious
institutions". XXX, did have a Chapel as part of its facility
at which regular religious services were held. The final order
did not address the narrower issue of whether CTC was a church,
since that issue was not at bar. Instead, the Department's
ruling was limited in scope to recognizing that CTC met the
statutory definition of a religious institution for purposes of
having its Consumer's Certificate of Exemption renewed.
Further, the Final Order acknowledged that the legislature
intended the following based on its choice of language in s.
212.08(7)(o), F.S., relating to the tax treatment of purchases
and sales by "churches" and "religious institutions:

"It appears from these statutes that the Legislature
intended to draw a distinction for sales tax exemption
purposes between churches' andnonprofit religious
institutions.' While the former enjoy a two-way exemption
(on purchases and sales), the latter enjoys the exemption
from taxation only on purchases...."

Moreover, the U.S. Supreme Court in Jimmy Swaggart Ministries v.
Board of Equalization of California, 107 L Ed 796 (1990), held
that the Jimmy Swaggart Ministries (JSM), a religious
organization, was obligated to collect and remit sales or use
tax on its sales of religious books, tapes, records, and other
religious merchandise. The court found such requirement "did
not violate the free exercise of religion clause of the First
Amendment" and "did not result in excessive entanglement between
government and religion, and thus did not violate the First
Amendment's establishment of religion clause." JSM, like the
Taxpayer, owned and operated broadcast facilities.

CONCLUSIONS OF LAW

It is clear, as acknowledged in Christian Television, supra,
that the Legislature intended to grant broader exemption
privileges to "churches" than to other types of religious
organizations. It is also clear from the fact that the
Legislature did not independently define "churches", but instead
defined the broader category of "religious institutions" which
includes churches, that the Legislature views "churches" as a
subset of "religious institutions". Accordingly, it cannot be
said that the Legislature views all "religious institutions" as
"churches."

As earlier noted, the Taxpayer's Articles of Incorporation do
not support that its purpose is to also function as a Church,
but instead only describe the Taxpayer's purpose as operating as
a Christian television broadcasting and telecasting system even
though it has a chapel on premises. These facts were present in
the case of Christian Television as well, in which it was simply
ruled that Christian Television was a "religious institution"
exempt from sales and use tax on its purchases. It was not
further held that Christian Television was also a church and
exempt from collecting tax on sales.

Also, based on the U.S. Supreme Court's Decision in Jimmy
Swaggart Ministries, supra, there is no apparent constitutional
bar against taxing the merchandise sales of a religious
organization involved in telecasting and broadcasting of
religious programming.

Lastly, consistent with the case law cited above regarding the
construction of statutory exemptions, the ambiguity over the
issue of whether the Taxpayer's operation of its chapel at its
facilities makes its broadcasting and telecasting operation as a
whole a church, must be resolved against the Taxpayer and in
favor of the taxing authority (the Department).

Considering these factors in their totality, the Department is
compelled to find that the facts simply support that the
Taxpayer is a religious institution (exempt only on purchases),
but is not in addition also a church (exempt on purchases and
sales) for sales and use tax purposes. Therefore, the Taxpayer
is responsible to collect and remit sales tax on its sales of
taxable tangible personal property.

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 confidential
information, we request you notify the undersigned in writing
within 15 days of any deletions you wish made to the request or
this response.

Sincerely,

Daniel M. Wagner, Jr.
Tax Law Specialist

Control No. 20983