STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNIVERSITY ATHLETIC ASSOCIATION, ) INC., )

)

Petitioner, )

)

vs. ) CASE NO. 79-0802

) STATE OF FLORIDA, DEPARTMENT OF ) REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled case on July 10, 1979, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Ashmun Brown, Esquire

207 Tigert Hall University of Florida

Gainesville, Florida 32611

For Respondent: Linda Procta, Esquire

Assistant Attorney General The Capitol, LL04 Tallahassee, Florida 32301

By letter dated March 23, 1979, the University Athletic Association, Inc., Petitioner, forwarded a petition for an administrative hearing to contest the Department of Revenue, Respondent's, denial of an exemption to certain sales taxes contained in Respondent's letter dated march 15, 1979.

The issue here involved is whether Petitioner is required to remit to Respondent, sales taxes on admissions to intercollegiate athletic events sponsored by Petitioner in which the University of Florida is a participant.

Petitioner contends that Section 212.04(2)(b)2, Florida Statutes, 1978 Supplement, exempts such events sponsored by Petitioner from sales taxes.

Respondent, on the other hand, contends that the legislature, in amending Sections 212.04(2)(b) by renumbering the exiting provision 1. and adding paragraph 2., did not intend to exempt admission tickets to university athletic events from sales tax.

Two witnesses were called by Petitioner, one witness was called by Respondent and three exhibits were admitted into evidence.

FINDINGS OF FACT

1. The facts are undisputed. The University Athletic Association, Inc., Petitioner, is a nonprofit corporation which was incorporated in 1929 to run the University of Florida's intercollegiate athletic activities. It has continued in this capacity to the present time.

   
   

2. In conducting the University of Florida's intercollegiate program Petitioner hires coaches; awards athletic scholarships; assumes responsibility for the costs of construction and additions to the stadium at Florida Field; provides housing, athletic uniforms and meals for those participating in the intercollegiate athletic program; sponsors all intercollegiate athletic contests and sells admission tickets to those events in which sufficient interest is evident to warrant ticket sales; owns the land on which the University golf course is located; and generally performs all intercollegiate athletic functions normally associated with a university.

   
   

3. In so doing it is subject to certain rules and regulations by the University and the Board of Regents, a majority of the members of the board of directors of Petitioner must be associated with the University, and generally Petitioner serves as an intercollegiate athletic arm of the University.

   
   

4. Petitioner has nothing to do with the intramural athletic program at the University. However, it has jurisdiction over athletic facilities, including the stadium, for scheduling purposes; it has the maintenance responsibility for that facility; and it becomes involved in the decision to allow use of the facility where expected crowd size mandates security measures.

   
   

5. Petitioner qualifies as a non-for-profit entity under the provisions of Section 501(c)(3) of the United States Internal Revenue Code of 1954, as amended. (Tr. p. 14).

   
   

6. Other colleges and universities in Florida are collecting and remitting to the Department of Revenue sales taxes on admission tickets to intercollegiate athletic events.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of these proceedings.

   
   

8. Prior to 1978 Section 212.04(2)(b), Florida Statutes (1977), provided:

   
   

   No tax shall be levied on admissions to athletic contests or other events held by elementary schools, high schools, community colleges, deaf and blind schools, facilities for youth services programs of the Department of Health and Rehabilitative Services, and state correctional institutions when only student, faculty, or inmate talent is utilized.

   
   

9. This provision was modified by Chapter 78-220, Laws of Florida, which renumbered the above quoted provision 1. and added subsection 2. which provides:

   
   

   No tax shall be levied on dues, membership fees, and admission charges imposed by not-

   for-profit sponsoring organizations or community or recreational facilities. To receive this exemption, the sponsoring organization or facility must qualify as a not-for-profit entity under the provisions of Section 501(c)(3) of the United States Internal Revenue Code, 1984, as amended.

   
   

10. In interpreting the above quoted statutory provisions, the primary guide is to determine the legislative intent, Dickinson v. Bradley, 298 So.2d

    352 (Fla. 1974), and to carry that intent into effect. To this principle all rules of statutory construction are subordinate. American Bakeries v. Haines City, 180 So. 524 (Fla. 1938).

    
    

11. In Leadership Housing, Inc. v. Department of Revenue, 336 So.2d 1239 (Fla. 1st DCA 1976), the court stated:

    
    

    It is elementary that the function of the court is to ascertain and give effect to the legislative intent in enacting the statute. In applying this principle certain rules have been adopted to guide the process of judicial thinking. The first of these is that the Legislature is conclusively presume to have a working knowledge of the English language and when a statute has been drafted in such a manner as to clearly convey a specific meaning the only proper function of the Court is to effectuate this legislative intent.

    Florida State Racing Commission v. McLaughlin, 102 So.2d 574, 575 (Fla. 1958).

    
    

12. We are further bound by the fundamental rule of construction that tax laws are to be construed strongly in favor of the taxpayer and against the government and that all ambiguities and doubts be resolved in favor of the taxpayer. Maas Bros., Inc. v. Dickinson, 195 So.2d 193 (Fla. 1967).

    
    

13. Respondent cites the corollary of the Maas Bros. case, viz. that one claiming an exemption from the tax has the burden of proof, as announced in Wanda Marine Corp. v. State, Department of Revenue, 305 So.2d 65 (Fla. 1st DCA 1974), and State ex rel. Szabo Food Services v. Dickinson, 286 So.2d 529 (Fla. 1973), and contends that Petitioner has failed to sustain this burden.

    
    

14. The proof required of one claiming an exemption from tax is that the taxpayer meets all of the requirements of that exemption. Here the evidence was uncontradicted that Petitioner is a not-for-profit organization pursuant to IRS rules and that it is the sponsor of intercollegiate athletic events in which the University of Florida is a participant and for which admission tickets are sold. The Petitioner does not have the burden of proving the legislature intended to exempt from sales taxes admission charges imposed by not-for-profit sponsoring organizations. The burden of proving such a tax is due, pursuant to Maas Bros., supra, is on the Respondent. Petitioner has the burden of showing that it is within the category of entities exempt from the tax. From the evidence presented, this burden has been met.

    
    

15. Respondent contends that by retaining the former subsection of Section 212.04(2)(b) the legislature intended that section to be applicable to athletic

    events and no exemption is there provided for colleges and universities. Had the legislature intended to exempt Petitioner from sales taxes on admissions to athletic events, argues Respondent, that subsection would be the place for that exemption to be located. Respondent also contends that both subsections 1 and 2 of Section 212.04(2)(b) must be read together and the statute considered as a whole.

    
    

16. It is a rule of statutory construction that general and special statutes should be read together, and if possible, harmonized. Headley v. State, 166 So.2d 479 (Fla. 3rd DCA 1964). Statutes on the same subject should be harmonized when possible, but a statute dealing specifically with the subject takes precedence over another statute covering the same subject in general terms. State v. Young, 357 So.2d 416 (Fla. 2nd DCA 1978).

    
    

17. Reading subsections 1 and 2 together leads to the conclusion that in subsection 1 the legislature exempted sales taxes on admission charges to athletic events held by schools and institutions below the college level, and subsection 2 exempted sales taxes from admission charges imposed by not-for- profit sponsoring organizations. Subsection 1 relates to schools while subsection 2 covers a much wider spectrum of sponsors for whom admission charges are exempt from sales tax. In the latter and newer subparagraph it is the sponsoring organization that is getting the benefit of the exemption while in subsection 1 it is the school that realizes the benefit of the exemption.

    
    

18. Respondent further contends that Rule 12A-1.01(18)(c), Florida Administrative Code, specifically provides that admission charges to athletic events by universities are taxable, and that this long-standing interpretation of a statute by the agency charged with its enforcement is entitled to great weight. While such an interpretation is entitled to great weight, it is noted that Rule 12A-1.01(18)(c) was promulgated before Section 212.04(2)(b)2 was enacted and, as an agency interpretation of Section 212.04(2)(b)1 it will be given great weight. Petitioner makes no claim that subsection 1 give it any exemption from sales tax.

    
    

19. The rules of statutory construction, as noted in Leadership Housing, supra, come into play only when the intent of the legislature is not clear from the words used in the statute. This legislative intent is determined objectively by taking the words used and applying thereto the normal and acceptable definition of those words, and not subjectively by evidence extrinsic to the statutory language used to determine what the legislators were thinking when subsection 212.04(2)(b)(2) was enacted.

    
    

20. It is an established maxim of statutory construction that courts have a judicial obligation to sustain legislative enactments when possible. North Port Bank v. State Department of Revenue, 313 So.2d 683 (Fla. 1975). Where the language used is unambiguous, a departure from its plain and natural meaning is not justified by any consideration if its consequences or of public policy. Board of Commissioners v. State, 118 So. 313 (Fla. 1928). Thus if another university does not qualify for exemption from sales taxes to athletic events because it does no qualify as a not-for-profit sponsoring organization pursuant to Section 501(c)(3) of the IRC, that rule does not invalidate the exemption provided to Petitioner.

    
    

21. From the foregoing it is concluded that Petitioner is a not-for-profit sponsoring organization at the University of Florida under the provisions of Section 501(c)(3), IRC, and that it levies admission charges for most of the events it sponsors. Applying the commonly accepted meaning to the words used in

Section 212.04(2)(b)(2) leads to the conclusion that the legislature specifically exempted such admission charges from the Florida sales tax. It is therefore

RECOMMENDED that the University Athletic Association, Inc., be found exempt, pursuant to the provisions of Section 212.04(2)(b)2, Florida Statutes, from sales taxes on athletic events for which it is the sponsoring organization.

ENTERED this 7th day of August 1979.

K. N. AYERS Hearing Officer

Division of Administrative Hearings Room 101, The Collins Building Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of August 1979.

COPIES FURNISHED:

Ashmun Brown, Esquire

207 Tigert Hall University of Florida

Gainesville, Florida 32611

Linda Procta, Esquire Assistant Attorney General The Capitol, LL04 Tallahassee, Florida 32301

Docket for Case No: 79-000802

Orders for Case No: 79-000802