Which sales and retreat charges of a certified nonprofit religious institution were exempt from Florida sales tax?

Plain-English summary

Florida exempted the religious organization's merchandise sales and qualifying admissions, but not its transient retreat lodging; the source directs readers to revised TAA 96A-048R.

The section 501(c)(3) organization held a current Florida Consumer's Certificate of Exemption, maintained an established place where people regularly assembled for worship, and planned a retreat facility with a chapel and sanctuary. The Department concluded that it met the sales-tax definition of a church.

As a church, its sales of tangible personal property were exempt. Qualifying religious goods and publications were independently exempt under the cited provisions. Admissions were exempt when the organization qualified as the sponsoring organization under the applicable rule.

The church-sales exemption did not extend to sales, leases, or licenses of real property. The organization therefore had to collect tax on transient sleeping accommodations and other real-property rentals unless a different exemption applied.

The retreat was not an exempt church-operated custodial camp because its primary focus was not temporary custodial supervision and instruction of children. The Department also declined to decide whether a lump-sum retreat package qualified as an exempt professional service because the requester had not supplied enough documentation about the services.

What this means for you

Churches and religious organizations

A purchase exemption certificate does not make every receipt exempt. Separate merchandise, admissions, transient lodging, real-property charges, and service components and apply the rule governing each.

Retreat-center operators

Religious programming alone did not turn adult spiritual retreats into custodial camps. Sleeping accommodations remained taxable absent another supported exemption.

Accountants and tax professionals

Document the organization's worship activities, certificate status, sponsorship of admissions, item classifications, lodging charges, and the services included in any lump-sum retreat fee. An issue left undecided for insufficient documentation should remain unresolved.

Common questions

Q: Were the organization's tangible-property sales exempt?
A: Yes. The Department found that it qualified as a church under the stated facts.

Q: Were religious publications and qualifying religious goods exempt?
A: Yes.

Q: Were event admissions exempt?
A: Yes when the organization met the rule's sponsorship requirements.

Q: Were retreat sleeping accommodations exempt as church sales?
A: No. That exemption did not cover leases, licenses, or rentals of real property.

Q: Did the retreats qualify as custodial camps?
A: No. Their primary purpose was not custodial supervision and instruction of children.

Q: Did the Department decide the professional-service exemption?
A: No. It said the requester supplied insufficient documentation.

Q: Is this the final version of the advice?
A: The document directs readers to revised TAA 96A-048R, issued July 1, 1997.

Citations and references

• Fla. Stat. §§ 212.03(1) and 212.04(2) — transient rentals and admissions
• Fla. Stat. § 212.06(9) — religious publications, Bibles, ceremonial robes, and similar goods
• Fla. Stat. § 212.08(7)(o), (v) — religious-institution and service-transaction exemptions
• Fla. Stat. § 409.175(2) — summer camp definitions used in the custodial-camp analysis
• Fla. Admin. Code rr. 12A-1.001(2), (3), 12A-1.005(3)(h), 12A-1.008(12)(b), and 12A-1.061(30) — religious sales, church status, admissions sponsorship, publications, and custodial camps
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-048

Original ruling text

Title:

Sales by a Nonprofit Religious Institution Holding a
Current Consumer's Certificate of Exemption

Status: See TAA 96A-048R (Revised), issued July 1, 1997

Sep 19, 1996

Re: Technical Assistance Advisement - 96(A)-048
Sales by a Nonprofit Religious Institution Holding a
Current Consumer's Certificate of Exemption
ss. 212.03(1); 212.04(2); 212.06(9); 212.08(7)(o),(v);
409.175(2), F.S.
Rules 12A-1.001(2),(3); 12A-1.008(12)(b); 12A1.061(30),F.A.C.
Taxpayer: XXXX
FEI#: XXXXX
Consumer's Certificate of Exemption #: XXXX

Dear :

This response is to your petition of April 24, 1996, 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. Your letter and
supporting documents provided the following pertinent
information.

FACTS PRESENTED

XXXX (Parent) is a worldwide XXX organization. XXX (Group) is a
XXXX not-for-profit religious corporation which is a constituent
organization of Parent operating in the U.S. Group is exempt
from Federal Income taxes under Section 501(c)(3) of the
Internal Revenue Code, and exempt from Florida sales and use
taxes on purchases pursuant to its Consumer's Certificate of
Exemption

Group has a location in XXX with an 80 seat prayer room. Group

is also completing construction of a "spiritual retreat
facility" in XXX. The facility will have a sanctuary,
conference center, chapel, cafeteria, amphitheater, multipurpose building, four dormitory-style structures, guest house,
administrative office space, caretaker's residence, guardhouse
and a pump house.

Group will have retreats that are typically a 3 night and 4 day
stay at the facility. The retreats are for Parent members.
Other events will also be hosted and offered to Parent members
and non-members. Fees may be charged for these events. Also,
religious publications and goods, commemorative items and other
tangible personal property will be available for sale to
attendees. The sale of these items would be separate from any
fees for the retreat or other events.

REQUESTED ADVISEMENT

The issue in question is whether Group is required to collect
from purchasers and remit to the Department sales taxes on
monies received by it from persons attending religious retreats
and purchasing religious publications and commemorative items at
the XXX. A significant portion of the determination of this
issue hinges upon whether Group is considered a "church" for
sales tax purposes.

RELEVANT AUTHORITIES

Section 212.03(1), F.S., provides in part:

It is hereby declared to be the legislative intent that
every person is exercising a taxable privilege who engages
in the business of renting, leasing, letting, or granting a
license to use any living quarters or sleeping or
housekeeping accommodations....

Section 212.04(2)(a)2.a., F.S., provides:

No tax shall be levied on dues, membership fees, and
admission charges imposed by not-for-profit sponsoring
organizations. To receive the exemption, the sponsoring

organization must qualify as a not-for-profit entity under
the provisions of s. 501(c)(3) of the United States
Internal Revenue Code of 1954, as amended.

Section 212.06(9), F.S., provides:

The taxes imposed by this chapter do not apply to the use,
sale, or distribution of religious publications, bibles,
hymn books, prayer books, vestments, altar paraphernalia,
sacramental chalices, and like church service and
ceremonial raiments and equipment.

Section 212.08(7)(o), F.S., provides in pertinent part:

(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; and
   ...
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.... (Emphasis supplied)

Section 212.08(7)(v)1., F.S., provides:

Also exempted are professional, insurance, or personal
service transactions that involve sales as inconsequential
elements for which no separate charges are made.

Section 409.175(2)(k) and (l), F.S. (1995), provides:

(k) "Summer day camp" means recreational, educational, and
other enrichment programs operated during summer vacations
for children who are 5 years of age on or before September
1 and older.
(l) "Summer 24-hour camp" means recreational, educational,
and other enrichment programs operated during summer
vacations for children who are 5 years of age on or before
September 1 and older, that are not exclusively
educational.

The following rule provisions were promulgated and adopted by
the Department to interpret, inter alia, the above statutory
exemptions for churches and religious institutions:

Rule 12A-1.001(2)(a), F.A.C., provides:

Bibles, hymn books, prayer books and religious publications
similar thereto, altar paraphernalia, sacramental chalices,
and like church service and ceremonial raiment and
equipment are exempt. (See Rule 12A-1.008[(12)], F.A.C.,
for the sale or purchase of religious publications.)

Rule 12A-1.001(3), F.A.C., 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... organizations, for use
in the course of their customary nonprofit religious,...
activities 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.... (Emphasis supplied)

Rule 12A-1.005(3)(g) and (h), F.A.C., provides in part:

(g)1 .... [N]o tax shall be levied on dues membership
fees, and admissions charges imposed by not-for-profit
sponsoring organizations.... To receive this exemption,
the organization making any such charges must qualify as a
not-for-profit entity under the provisions of s. 501(c)(3)
of the United States Internal Revenue Code of 1986, as
amended.
...
(h) For the purposes of this rule, sponsorship of an event
or program is determined by using the following criteria:

1. Active participation by the entity in the planning and
   conduct of the event or program;
2. Assumption by it of responsibility for the safety and
   success of the event or program, such that it will be
   subject to a suit for damages for alleged negligence in its
   conduct;
3. Entitlement by it to the gross proceeds from the event
   or program and to the net proceeds after payment of its
   costs; and
4. Responsibility by it for payment of costs of the event
   or program and for bearing any net loss if the costs exceed
   gross proceeds.

Rule 12A-1.008(12)(b), F.A.C., provides:

Religious publications are exempt. For purposes of this
exemption, "religious publications" are defined as
publications, except those referred to in paragraph (a),
that are used, sold, or distributed by a church, or
religious institution, holding an exemption certificate
based on its exemption under s. 212.08(7)(o), F.S.

Rule 12A-1.061(30), F.A.C., provides in part:

Day Nurseries, kindergartens, church-operated and other
custodial camps which primarily provide supervisory and
instructional services which are professional and personal,
are exempt and are not required to collect tax on fees
charged for admissions, participation in sports or
recreation, or for food, lodging, or other similar
accommodations, services or privileges.... (Emphasis
supplied)

ADVISEMENT

As you have concluded in your TAA request, the sale of certain
items of a religious nature is specifically exempt by statute,
and the sale of religious publications is also exempt when sold
by a religious institution holding an exemption certificate
pursuant to s. 212.08(7)(o), F.S. In addition, admissions sold
by an I.R.C. Section 501(c)(3) organization are exempt when the
sponsorship requirements outlined in Rule 12A-1.005(3)(h),
F.A.C., are met. Therefore, religious items sold by Group which
meet the requirements of s. 212.06(9), F.S. and Rules 12A1.001(2) and 12A-1.008(12), F.A.C., are exempt. Because Group
qualifies as an I.R.C. Section 501(c)(3) organization,
admissions sold by group will be exempt in those instances in
which the Group is deemed to be a "sponsoring" organization
pursuant to Rule 12A-1.005(3)(h), F.A.C.

Group already holds a valid Consumer's Certificate of Exemption
as a "religious institution" pursuant to s. 212.08(7)(o)2.a.,
F.S. Group currently has an established physical place of
worship where persons regularly assemble for worship, and will
have a chapel and sanctuary at the XXXX that will serve to
satisfy the definition of "church" 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., as a sale by a
church. Therefore, Group bears no obligation to charge and
collect sales tax on its sales of tangible personal property.

The tax exemption for sales provided to churches under s.

212.08(7)(o)1.a., F.S., does not apply to sales, leases or
licenses of real property. Thus, this particular statutory
section would not provide Group with an exemption from
collecting and remitting tax on its transient rentals (i.e.,
rental of sleeping accommodations at the retreat). Thus, Group
will be liable for collecting and remitting tax on transient
rentals, as well as on any other leases, licenses, or rentals of
real property it makes to others, if no other exemption is
found.

In your letter, you argue the applicability of the exemption for
church-operated custodial camps, provided by Rule 12A-1.061(30),
F.A.C. However, this rule is not applicable to the
circumstances of this situation.

Subsection (30) of Rule 12A-1.061, F.A.C., specifically exempts
"[d]ay nurseries, kindergartens, church-operated and other
custodial camps which primarily provide supervisory and
instructional services". The construction of the sentence in the
referenced rule indicates that a church-operated camp entitled
to the exemption would have to be a "custodial camp".

The rule does not provide a definition of "custodial camp".
Thus we must look to other sources to define this term.
Webster's Dictionary defines "custodial" as relating to
guardianship. Webster's also defines "camp" as being "a place
provided with tents or cabins... designed for rest or
recreation, especially for children in the summer". The terms
"summer day camp" and "summer 24-hour camp" are defined in
Section 409.175(2), F.S. Both of these definitions specify that
they are offered for children during summer vacation.

Thus, relying on these sources and the doctrine of "plain and
ordinary meaning", we must conclude that a "custodial camp" is a
program for children which is of temporary or limited duration
conducted during a period when school is not normally being
attended. The spiritual retreats being offered at the XXXX
would not qualify as a "custodial camp". The primary focus of
the retreats is not custodial supervision and instruction of
children.

You also argue in your letter that the exemption in s.
212.08(7)(v), F.S., applies to the retreat (and consequently to
the dormitory rooms because they are included as part the
retreat for a lump sum fee). You state the religious retreat
provides worship and instruction for religious purposes and is a
non-taxable service pursuant to s. 212.08(7)(v), F.S. However,
sufficient documentation of the professional services provided
by the retreat has not been provided for the Department to make
a determination on the applicability of s. 212.08(7)(v), F.S.
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,

Edith Sapp
Tax Law Specialist
Tax Policy and Dispute Resolution

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