Did a nonprofit religious organization have to collect Florida sales tax on its sales of tangible personal property?

Plain-English summary

Florida ruled that the nonprofit religious organization did not have to collect sales tax on its sales of tangible personal property.

The organization was a 501(c)(3), held a valid Florida Consumer's Certificate of Exemption as a religious institution, and regularly conducted worship and religious instruction open to the public at its facilities. Those facts satisfied the Department's definition of a church even though worship was not the sole or dominant use of the buildings.

The exemption did not extend to every transaction. The organization remained responsible for collecting and remitting tax on leases, licenses, or rentals of real property to others.

What this means for you

• A valid exemption certificate and an established place of regular public worship supported church treatment.
• Worship did not have to be the building's sole or dominant use on these facts.
• Tangible-property sales and real-property rentals received different tax treatment.

Common questions

Q: Were the organization's tangible-property sales taxable?
A: No.

Q: Did it qualify as a church?
A: Yes, because it regularly conducted public worship and religious instruction at an established physical place and already held the cited exemption certificate.

Q: Did worship have to be the facility's dominant use?
A: No, according to this ruling.

Q: Were its real-property leases or rentals exempt?
A: No. The ruling said those transactions remained taxable.

Citations and references

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

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-019

Original ruling text

Mar 04, 1996

Re: Technical Assistance Advisement 96(A)-019
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: XXXX
FEI#: XXXX
Consumer's Certificate of Exemption #: XXXX

Dear :

This response is to your petition of November 27, 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 missionary endeavors in numerous
countries, the conduct of regular worship services, and
other related 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 a "religious
institution" in that 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 regularly carried on. (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.

A description of [Taxpayer's] worship service activities,
including locations, is attached as Exhibit 4.

The Articles of Incorporation (adopted in 1978) for [Taxpayer]
include the following purpose statement:

The purpose shall be, to propagate the Gospel of the Lord
Jesus Christ; to continue religious education and to
maintain schools; to send forth missionaries to foreign
fields; to publish Christian books, pamphlets and
literature and to function as a church.

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

[Taxpayer] conducts regular worship services at their XXXX
location as follows:

Weekly Wednesday morning worship services: 7:45 A.M. 8:15 A.M.
These meetings are for worship and Bible
instruction and are open to members as well as
the general public.
Weekly Tuesday evening worship services: 7:00 P.M. to
8:00 P.M.
These meeting are held in our 8 stateside
locations as well as around the world at all of
our locations in the 27 countries in which we
work. These meetings are for worship, times of

sharing, bible instruction and showing of slides
as missionaries pass through our bases. These
meetings are open to the public and in fact
members are encouraged to invite the public to
these meetings.
Weekly Monday, Tuesday, Thursday and Friday: 7:45 A.M.
to 8:00 A.M.
These meetings are held for prayer time, bible
study and sharing of needs.
Monthly on the second Tuesday of each month: 7:45 A.M.
to 10:00 A.M.
Again, these meeting are held in our 8 stateside
locations as well as around the world at all of
our locations in the 27 countries in which we
work. These meetings are for worship, times of
sharing, bible instruction and prayer.
...

REQUESTED ADVISEMENT

You request the Department's ruling on 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
term "religious 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 term "religious 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....

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).

CONCLUSIONS OF LAW

The Taxpayer already holds a valid Consumer's Certificate of
Exemption as a "religious institution" pursuant to s.
212.08(7)(o)2.a., F.S. The Taxpayer's activity of conducting
regularly scheduled worship/church services open to the public
at its facilities serves to satisfy the definition found in Rule
12A-1.001(3)(c), F.A.C. Accordingly, sales of tangible personal
property by the Taxpayer qualify as exempt from sales and use
tax pursuant to s. 212.08(7)(o)1.a., F.S. Therefore, the
Taxpayer bears no obligation to charge and collect sales tax on
its sales of tangible personal property. However, please be
alerted to the fact that the Taxpayer is and remains liable to
collect and remit tax on any leases, licenses, or rental by it

to others of real 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. 24168