Did a Florida church owe tax on conference hotel rooms and meals or on the lump-sum fees charged to attendees?

Subject

Sales by a Nonprofit Religious Institution Which Holds a Valid Consumers' Certificate of Exemption

Plain-English summary

The church did not have to pay sales or transient-rental tax on the hotel rooms and meals it bought for its religious conferences, and it did not have to collect those taxes on the fixed conference fee charged to attendees. The result depended on the church being the real purchaser and using the accommodations in church business rather than reselling them to participants.

The church reserved and paid for the rooms itself, accepted responsibility for extra cleaning, damage, and attendee conduct, and offered the lodging as part of its conference. An attendee who declined the provided room or meals paid the same conference price as one who used them. Florida therefore did not view the church as re-leasing rooms or reselling meals.

The remaining conference activity—religious lectures, Bible teaching, and religious music—was not subject to the cited taxing statutes. The church had separately agreed that theme-park or other entertainment admissions would not be included in the conference package; those admissions would be separately priced and the appropriate Florida admissions tax paid.

What this means for you

An exempt religious organization can preserve its exemption for conference accommodations when it contracts and pays directly, documents its exempt status, takes responsibility for the rooms, and uses them for organizational business. Reimbursing an individual's personally paid room or merely facilitating an attendee's rental is materially different under the rule quoted in the advisement.

The attendee-fee result also depended on pricing. Because declining lodging or meals did not reduce the lump-sum conference charge, the Department treated those benefits as part of the church's activity rather than separately resold items.

Common questions

Q: Who had to reserve and pay the hotel? The church. Direct billing and direct payment by the exempt organization were central to the lodging exemption.

Q: Did attendees owe less if they arranged their own room or skipped meals? No. The facts stated that the applicable conference price did not decrease when an attendee declined those benefits.

Q: Were the church's conference charges taxable? No on these facts. The fee covered the religious conference, and the church was not treated as reselling the lodging or meals.

Q: Were entertainment admissions also exempt? The ruling did not treat them that way. The church said any theme-park or similar admissions would be separately priced and the appropriate admissions tax paid.

Citations and references

• Fla. Stat. § 212.03(1) — tax on transient rental accommodations
• Fla. Stat. § 212.08(7)(o) — exemption for qualifying transactions involving churches and other listed institutions
• Fla. Admin. Code r. 12A-1.001(3) — church and religious-institution definitions
• Fla. Admin. Code r. 12A-1.005(3) — exempt sales by religious institutions
• Fla. Admin. Code r. 12A-1.061(13) — direct billing, payment, use, and documentation for exempt transient accommodations
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98A-045

Original ruling text

SUMMARY

Taxpayer is a church. The accommodations purchased by
Taxpayer for use by seminar or conference participants will
be considered used by the Taxpayer in the conduct of church
business and therefore exempt under the following
circumstances: Taxpayer, not the conference or seminar
participant, reserves the hotel rooms, directly pays for
the hotel rooms and is responsible for any excess cleaning
and or damages done to any hotel room by any conference or
seminar participant and otherwise "assumes full
responsibility for the conduct of all persons in
attendance" at such conference or seminar. Further, the
price of the seminar or conference is a single lump-sum
charge and is the same whether the conference or seminar
participant elects to use the lodging provided or chooses
to provide his or her own accommodations. Under such
circumstances, the Taxpayer will not be considered as
acquiring the rooms for the purposes of re-leasing or
reselling the rooms to seminar or conference participants.

Under the facts provided by this Taxpayer, the price of the
conference or seminar is a lump-sum which remains the same
regardless of whether the participant accepts or rejects
the proffered lodging and meals. Thus, Taxpayer is not
viewed as reselling those elements and no tax need be
collected or remitted to the Department. The Taxpayer's
provision of conference activities such as the religious
lectures, bible teaching and religious music, constitute
religious activities that are not subject to the taxing
statutes. Therefore, Taxpayer is not required to collect
and remit sales tax on its charges to the conference or
seminar participants.

Jun 25, 1998

Re: Technical Assistance Advisement 98(A)-045
Sales by a Nonprofit Religious Institution Which Holds a

Valid Consumers' Certificate of Exemption
Sections: 212.03, 212.08(7)(o), and 213.22, F.S.
Rules: 12A-1.001(3), 12A-1.005(3), and 12A-1.061, F.A.C.
Taxpayer: XXX (referred to herein as "Taxpayer".)

Dear :

This response is to your petition of August 29, 1997,
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 August 29, 1997, request
and supporting documents along with your subsequent oral
statements made during a meeting on May 7, 1998, and your
subsequent letter and attached supplemental documentation dated
June 5, 1998. The information provided orally and in writing
are sufficient; therefore, the Department is hereby issuing the
requested TAA.

DISCUSSION OF FACTS

Your August 29, 1997, letter and supporting documentation
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. Taxpayer is a "religious institution" pursuant
to the definition contained in rule 12A-1.001(3)(d), F.A.C.
Taxpayer has previously received advisement from the
Department (in TAA 96(A)-019) that Taxpayer is considered a
"church" pursuant to the definition contained in Rule 12A1.001(3)(c), F.A.C.

In connection with its exempt purpose, Taxpayer sponsors
religious conferences from time to time for the religious
edification of Christian believers. An example of a
typical conference is the "Renaissance Conference" planned
for November 1997. This conference is a 6-day, 5-night

conference at the Organization's conference facility in XXX
(see conference brochure attached as Exhibit 2). The
primary emphasis of this conference is in-depth Bible study
and insightful teaching from conference speakers
(generally, ministers of the Gospel). The price of the
conference also includes meals, lodging at a choice of two
local hotels, and a choice of afternoon recreational and
fellowship events. The brochure advertises different
package prices for the conferees based upon each attendee's
choice of hotels and the choice of afternoon recreational
and fellowship events. Neither the lodging, nor the meals,
nor the recreational activities are separately priced.
With respect to each such conference, Taxpayer:

1. Actively participates in the planning and conduct of the
   conference;

2. Is responsible for the success of the conference;

3. Is entitled to the gross proceeds from the conference
   and the net proceeds after payment of related costs; and

4. Is responsible for payment of costs of the conference
   and for bearing any net loss if the costs exceed gross
   proceeds.

Your statements on May 7, 1998, and your June 5, 1998,
letter and supporting documentation amends or supplements the
facts previously given with respect to admissions, lodging and
meals. These new or additional facts are as follows:

Admissions: As for the admissions, no conference or seminar
will be structured in such a manner that any admissions to theme
parks or other entertainment-type facilities will be priced as
part of the package. Rather, any such admissions will be priced
separately from the conference participation fees and
appropriate Florida admissions taxes will be paid on such
admissions.

Lodging: As to the lodging, you supplied with your June 5,
1998, letter a copy of a contract that insures that the

taxpayer, not the conference or seminar participant, reserves
the hotel rooms, pays for the hotel rooms, and is responsible
for any excess cleaning and or damages done to any hotel room by
any conference or seminar participant and otherwise "assumes
full responsibility for the conduct of all persons in
attendance" at such conference or seminar. Further, a
conference or seminar participant who chooses not to make use of
the provided lodging or to eat the food provided still pays the
same price paid by another individual who attends the conference
or seminar but does stay in the hotel room provided and enjoys
the meals that are provided. For example, the least expensive
package offered by Taxpayer costs $399.00 and provides the payor
with accommodations at the XXX, meals, and entrance to the
religious conference or seminar. Likewise, an individual who
desires to attend the seminar or conference but does not want
Taxpayer to provide meals or hotel accommodations would also pay
$399.00 to attend the seminar or conference. There are no
discounts for those not taking advantage of the lodging or the
provision of food or beverages.

Meals: As to the meals, the only meal vouchers given
conference or seminar participants are those breakfast vouchers
given to the occupants of the rooms purchased by Taxpayer. No
other meal vouchers are given. All other meals provided by
Taxpayer during the seminar are provided free to conference
leaders and seminar or conference participants, are provided
during breaks in the conference or seminar, are provided to
conference or seminar participants only, are provided in a group
setting and are provided as a means to ensure that the seminar
or conference moves forward with minimal disruption. A
conference or seminar participant who chooses not to make use of
the provided lodging or to eat the food provided still pays the
same price paid by another individual who attends the conference
or seminar but does stay in the hotel room provided and enjoys
the meals that are provided. There are no discounts for those
not taking advantage of the lodging or the provision of food or
beverages.

REQUESTED ADVISEMENT AND TAXPAYER'S POSITION

Your request, as amended by your June 5, 1998 letter, is

for the Department's ruling on the following issues:

1. Whether Taxpayer is required to pay sales tax (or transient
   rentals tax) on the meals and hotel rooms purchased by Taxpayer
   for its use in conducting such religious conferences.

2. Whether Taxpayer is required to collect from attendees and
   remit to the Department sales tax (or transient rentals tax) on
   monies received by it from persons attending such religious
   conferences.

Your letter states that Taxpayer's position is that it is
not required to pay sales tax on its purchases of hotel rooms
pursuant to the provisions of Rule 12A-1.061(26), F.A.C.,
(amended and renumbered as Rule 12A-1.061(13) subsequent to the
TAA request) or to collect any tax from attendees pursuant to
Rule 12A-1.005(3)(g), F.A.C.

APPLICATION OF THE LAW AND RULES TO THE FACTS PROVIDED

Response to Request No. 1.: No, Taxpayer, a religious
institution, will not be required to pay sales tax (or transient
rentals tax) on the meals and hotel rooms purchased by Taxpayer
for its use in conducting such religious conferences.

Analysis: As stated in your August 29, 1997, letter, s.
212.03(1), F.S. imposes a tax upon the privilege of renting,
leasing, letting, or granting a license to use transient rental
accommodations such as hotel rooms. Thus, the general rule is
that the purchase of such accommodations is taxable unless the
purchaser is a registered dealer and is purchasing for resale or
an exemption is applicable to the transaction. Taxpayer urges
the application of the exemption found in s. 212.08(7)(o), F.S.,
as elaborated upon in Rule 12A-1.061(13), F.A.C. (formerly 12A1.061(26) F.A.C.).

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

(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....

Rule 12A-1.061(26), F.A.C., before renumbering and
amendment in 1997, read in pertinent part as follows:

(26)(a) Transient rental accommodations billed to and paid
by an individual representing an exempt organization or a
governmental entity other than a Federal agency,--(i.e.,
state, county, city, or any other political subdivision)are taxable whether or not the representative receives an
advance or reimbursement from the exempt organization or
governmental entity. However, when transient rental
accommodations are billed directly to and paid directly by
a governmental entity or an organization exempt from tax
under Section 212.08(7), (m) or (o), F.S., such
accommodations are exempt from tax....

(b) Lessors are required to document exempt rentals at the
time of transaction. Federal employees... and employees of
nonprofit organizations shall provide the lessor with
proper documentation of the exempt nature of the
transaction.... (Emphasis Supplied)

The pertinent portions of Rule 12A-1.061, as amended on
11/30/97, read as follows:

(13) GOVERNMENTAL EMPLOYEES AND REPRESENTATIVES OF EXEMPT
ORGANIZATIONS.

(b)1. Employees of governmental units other than the
federal government or its agencies (i.e., state, county,
city, or any other political subdivision of the State) and
authorized representatives of organizations exempt from tax

under s. 212.08(7)(m) or (o), F.S., are exempt from tax on
rental charges or room rates for transient accommodations
only when:

a. the rental charges or room rates are billed directly to
and paid directly by the governmental unit or the exempt
organization;

b. the employee or representative does not use the
transient accommodations for personal purposes; and

c. the employee or representative provides the owner or the
owner's representative of the transient accommodations with
proper documentation. See Rule 12A-1.001(9)(d)2., F.A.C.,
for the information and suggested formats of the proper
documentation to be provided by the employee or
representative.

2. Rental charges or room rates paid with personal funds of
   any individual representing an exempt organization or of
   any employee of a governmental unit, other than the federal
   government or its agencies, are subject to tax, even though
   the representative may receive an advance or reimbursement
   from the exempt organization or governmental unit.

(c) To exempt rental charges or room rates to government
employees and representatives of exempt organizations, the
owner or owner's representative of the transient
accommodations must maintain a copy of the documents
required under paragraphs (a) or (b) in their records until
the tax imposed by Chapter 212, F.S., may no longer be
determined and assessed under s. 95.091(3), F.S. Upon
request, a copy of the documents must be made available to
the Department. (Emphasis Supplied).

The exemption provided by s. 212.08(7)(o), F.S. is required
by the statute granting the exemption to be strictly "defined,
limited and applied." This exemption, as shown by the quotations
from Rule 12A-1.061, F.A.C., exempts the purchase of transient
rental accommodations by churches when the accommodations are to
be used by the church in the conduct of church business.

The accommodations purchased by Taxpayer for use by seminar
or conference participants will be considered used by the
Taxpayer in the conduct of church business and therefore exempt
under the following circumstances: Taxpayer, not the conference
or seminar participant, reserves the hotel rooms, directly pays
for the hotel rooms and is responsible for any excess cleaning
and or damages done to any hotel room by any conference or
seminar participant and otherwise "assumes full responsibility
for the conduct of all persons in attendance" at such conference
or seminar. Further, the price of the seminar or conference is
a single lump-sum charge and is the same whether the conference
or seminar participant elects to use the lodging provided or
chooses to provide his or her own accommodations. Under such
circumstances, the Taxpayer will not be considered as acquiring
the rooms for the purposes of re-leasing or reselling the rooms
to seminar or conference participants.

Response to Request No. 2.: No, Taxpayer, a religious
institution, is not required to collect from attendees and remit
to the Department sales tax (or transient rentals tax) on monies
received by it from persons attending such religious
conferences.

Analysis: Under the facts provided by this Taxpayer, the
price of the conference or seminar is a lump-sum which remains
the same regardless of whether the participant accepts or
rejects the proffered lodging and meals. Thus, Taxpayer is not
viewed as reselling those elements and no tax need be collected
or remitted to the Department. The Taxpayer's provision of
conference activities such as the religious lectures, bible
teaching and religious music, constitute religious activities
that are not subject to the taxing statutes. Therefore,
Taxpayer is not required to collect and remit sales tax on its
charges to the conference or seminar participants.

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. Our response is predicated upon 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 from that which is 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 that 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 this response.

Sincerely,

Tracy L. Allen
Attorney

Cont. # 30869