STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROY HARTHERN MINISTRIES, INC., )

)

Petitioner, )

)

vs. ) Case No. 97-4984

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was held by the Division of Administrative Hearings, before Administrative Law Judge, Daniel M. Kilbride, in Orlando, Florida, on March 3, 1998. The following appearances were entered:

APPEARANCES

For Petitioner: Roy Harthern, President

Roy Harthern Ministries, Inc. Post Office Box 915971 Orlando, Florida 32791

For Respondent: Rex D. Ware, Assistant General Counsel Department of Revenue

Post Office Box 6668 Tallahassee, Florida 32314-6668

STATEMENT OF THE ISSUE

Whether Petitioner qualifies for the renewal of a consumer certificate of exemption as a qualified religious organization pursuant to Section 212.08(7)(o), Florida Statutes?

PRELIMINARY STATEMENT

Petitioner, Roy Harthern Ministries, Inc. (Petitioner) filed

an application to renew its consumer certificate of exemption with Respondent, State of Florida, Department of Revenue (Respondent), on or about July 18, 1997. On October 13, 1997, Respondent issued its Notice of Intent to Deny Petitioner's application based on the grounds that Petitioner did not qualify as a religious organization. Petitioner filed a Petition for Formal Administrative Hearing and this matter was referred to the Division of Administrative Hearings.

At the final hearing, Petitioner presented the testimony of Roy Harthern, President of Roy Harthern Ministries. Respondent called W. David Young as a witness and introduced one joint exhibit which was accepted into evidence. In addition, the parties stipulated to certain facts.

A transcript of the proceeding was filed on March 16, 1998. Respondent timely filed a Proposed Recommended Order on March 25, 1998. Petitioner has not filed proposed findings of facts as of the date of this order.

FINDINGS OF FACT

1. Petitioner is an active not-for-profit corporation organized under the laws of the State of Florida. It maintains exempt status under Section 501(c)(3) of the Internal Revenue Code.

2. The Respondent is the state agency charged with the administration of the tax laws of the State of Florida, including those dealing with the grant or denial of consumer certificates

   of exemption to qualified organizations.

   
   

3. Reverend Roy Harthern is an ordained Assembly of God minister who previously had a career as a minister in several

   
   

   churches in Texas and Florida, as well as founding a Christian magazine and a Christian television station in Florida.

4. The Reverend and Mrs. Harthern are evangelists and Bible teachers. In 1983, Reverend Harthern and his wife, Pauline, founded the organization from which the Reverend and

   Mrs. Harthern practice an itinerant ministry. They preach in different established churches each week, both inside and outside of the State of Florida and the United States. In the past, Reverend Harthern has had a regular religious show on television. Reverend Harthern also writes, records religious tapes and has a weekly radio program on a station owned by others. Petitioner does not have an established physical place of worship at which nonprofit religious services are regularly held; does not provide transportation for church members or other services; and does not provide services to state prisoners. There has been no substantial change in the type or nature of Petitioner's ministry since its founding in 1983.

5. Respondent issued a certificate of exemption to Petitioner in 1983 as a "religious organization." Petitioner has renewed the exemption, in five-year intervals, ever since.

6. Respondent has never sought to revoke or suspend

   Petitioner's exempt status since 1983.

   
   

7. On July 18, 1997, Petitioner applied to renew its consumer certificate of exemption as a "religious organization." Its previous certificate was issued on October 6, 1992, and was due to expire on October 5, 1997

   
   

8. There has been no substantive changes to the implementing statute during the relevant time period.

9. On October 13, 1997, Respondent issued its Notice of Intent to Deny to Petitioner on the grounds that Petitioner did not have an established physical place of worship at which nonprofit religious services and activities were regularly conducted.

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause, pursuant to Section 120.569 and 120.57(1), Florida Statutes.

11. The Respondent is authorized to issue and reissue tax exemption certificates to qualified entities pursuant to Section 212.084, Florida Statutes.

12. Petitioner seeks a renewal of its exemption from tax- based upon the allegation that it qualifies as a "religious organization" pursuant to Section 212.08(7)(o)2.a., Florida Statutes, which provides:

    1. The provisions of this section authorizing exemptions from tax shall be

       strictly defined, limited, and applied in each category as follows:

       
       

       1. "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 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), Internal Revenue Code of 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 predominately from contributions from the general public. The term "religious institutions" also includes any nonprofit corporation which is qualified as nonprofit pursuant to s. 501(c)(3), Internal Revenue Code of 1986, as amended, which provides regular religious services to Florida state prisoners and which from its own established physical place of worship, operates a ministry providing worship and services of a charitable nature to the community on a weekly basis.

          See also, Rule 12A-1.001(3)(c) and (d), Florida Administrative Code.

13. Tax exemptions are a matter of legislative grace. The provisions of law which authorize a tax exemption must be strictly construed against the person claiming the exemption.

    Asphalt Pavers, Inc. v. Department of Revenue, 584 So. 2d 55, 57 (Fla. 1st DCA 1991); see also, Department of Revenue v. Skop, 383 So. 2d 678, 680 (Fla. 5th DCA 1980). ("While doubtful language in taxing statutes should be resolved in favor of the taxpayer, the reverse is true in construction of exceptions and exemptions from taxation."); Wanda Marine Corporation v. Department of Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA 1974) ("tax exemptions must be strictly construed against the claimant.") As to new applicants, Respondent is correct.

14. However, the Respondent has also taken the position that when a certificate expires, the Respondent can require persons or organizations, who have had a certificate issued previously, to submit a new application which will be reviewed by the Respondent under the same guidelines and criteria as a completely new applicant. In this regard, I must reluctantly agree since the administrative construction of a statute by the agency charged with its administration is entitled to great weight. Consumer Credit Counseling Service of the Florida Gulf Coast v. Department of Revenue, 22 Florida Law Weekly, D1613 (Fla. 2d DCA, July 2, 1997).

15. However, Respondent has not filed charges against Petitioner for wrongdoing. The uncontroverted evidence is that the Petitioner's ministry has not changed since 1983 and neither has the statute. Respondent is simply refusing to renew the certificate because it has changed its construction of the statute. This is unfortunate since Petitioner is clearly providing a religious service in and out of Florida.

16 Although Petitioner raised issues concerning the constitutionality of the applicable statute, the Division of Administrative Hearings does not have the authority to rule on such issues in this proceeding. See Key Haven Associated Enterprises, Inc. v. Board of Trustees of the Internal Improvement Trust Fund, 427 So. 2d 153 (Fla. 1982).

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law, it is

RECOMMENDED that the Department of Revenue enter a Final Order denying Petitioner's renewal application for exemption, and the provisions of Section 212.08(7)(o)2.1., Florida Statutes.

DONE AND ENTERED this 9th day of April, 1998, at Tallahassee, Leon County, Florida.

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1998.

COPIES FURNISHED:

Roy Harthern, President

Roy Harthern Ministries, Inc. Post Office Box 915971 Longwood, Florida 32791

Rex D. Ware, Esquire Department of Revenue Post Office Box 6668

Tallahassee, Florida 32314-6668

Linda Lettera, General Counsel Department of Revenue

204 Carlton Building Tallahassee, Florida 32399-0100

Larry Fuchs, Executive Director Department of Revenue

104 Carlton Building Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 97-004984

Orders for Case No: 97-004984