STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHRISTIAN-MUSLIM CHURCH OF GOD ) (ALLAH) )

)

Petitioner, )

)

vs. ) CASE NO. 95-4076

)

STATE OF FLORIDA )

DEPARTMENT OF REVENUE )

)

Respondent. )

)

RECOMMENDED ORDER

On January 11, 1996, a formal administrative hearing was held in this case in Tampa, Florida, before Carolyn S. Holifield, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: John Savas

1416 Hill Drive

Largo, Florida 34640

For Respondent: Ruth Ann Smith, Esquire

Post Office Box 6668 Tallahassee, Florida 32314-6668

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner is entitled to a consumer certificate of exemption as a religious or charitable institution.

PRELIMINARY STATEMENT

On July 13, 1995, Petitioner, Christian-Muslim Church of God (Allah), hereinafter referred to as the Christian-Muslim Church of God, filed an application for a certificate of exemption from sales tax with Respondent, Department of Revenue. By letter dated July 20, 1995, Respondent denied the application on the grounds that Petitioner did not meet the statutory criteria for exemption as either a religious or charitable institution.

Petitioner challenged the determination and timely requested a formal hearing. By letter dated August 14, 1995, Respondent referred the matter to the Division of Administrative Hearings and this proceeding followed.

At the hearing, Petitioner presented the testimony of its founder, John Savas, and offered no exhibits into evidence. Respondent presented the testimony of William David Young, a tax specialist with the Department of Revenue, and had one exhibit admitted into evidence.

A transcript of the proceeding was filed on January 25, 1996. Respondent filed proposed findings of fact and conclusions of law. Petitioner did not submit a proposed recommended order. Explicit rulings on the proposed findings of fact contained in Respondent's proposed recommended order may be found in the attached Appendix to Recommended Order, Case No. 95-4076.

FINDINGS OF FACT

1. John Savas is the founder of the Christian-Muslim Church of God. The primary purpose of the Christian-Muslim Church of God, in the words of its founder, is to provide an "educational ministry to bring people closer to God's moral standards." The business operations of the church are carried on from Mr. Savas' residence.

   
   

2. The Christian-Muslim Church of God has ten members, but does not meet with them on a regular basis. On a few occasions, Mr. Savas has met with two of the members to discuss their physical and mental health and spiritual life. However, these meetings never involved worship services.

   
   

3. The Christian-Muslim Church of God is not part of any established religion. The Christian-Muslim Church of God does not regularly conduct worship services, engage in other religious activities, and provide services typically associated with a church. The church has no established physical place of worship. While Mr. Savas expressed that the church has generalized plans to establish regular religious services, as of the date of the hearing, no schedule of regular religious services or physical place of worship had been established.

   
   

4. Funds are not solicited by the Christian-Muslim Church of God, but the church accepts voluntarily donations. Presently, the church has collected a total of $17.00. These funds are usually deposited in Mr. Savas' personal bank account. The Christian-Muslim Church of God does not maintain a bank account in its name.

   
   

5. The Christian-Muslim Church of God does not prepare financial statements. Consequently, when Petitioner applied for the certificate of tax exemption, no financial statements of the Christian-Muslim Church of God were provided to Respondent.

   
   

6. The Christian-Muslim Church of God does not maintain status as an organization under Section 501(c)(3) of the Internal Revenue Code. Likewise, the church is not a registered nonprofit corporation nor is it classified or registered as any type of legal entity.

   
   

7. John Savas initially applied for a certificate of exemption on behalf of the Christian-Muslim Church of God when purchasing a car in 1993. The car, title to which is in Mr. Savas' name, was purchased with his personal funds. This vehicle is Mr. Savas' primary means of transportation and is for his personal use.

   
   

8. Mr. Savas is a member of Old Calendar Church and sometimes assists members thereof. As a member of Old Calendar Church, Mr. Savas contributes to Old Calendar Church's benevolent fund. Also, Mr. Savas has contributed financially to Radio Pulpit, a radio ministry in the Largo area; the Salvation Army; and the Worldwide Church of God. On occasion, Mr. Savas visits individuals confined to hospitals and provides financial assistance to individuals in need of help.

9. The charitable acts and contributions of Mr. Savas are noteworthy. However, it is undisputed that all monetary contributions have come from Mr. Savas' personal resources and the donations have been made in his name. Therefore, these benevolent acts and charitable contributions are attributable to Mr. Savas, the individual, and not to the Christian-Muslim Church of God. Notwithstanding his assertions to the contrary, Mr. Savas and the Christian- Muslim Church of God are not one and the same.

   
   

10. The Christian-Muslim Church of God does not meet the statutory criteria for exemption from sales tax as either a religious or charitable institution.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The Department of Revenue is authorized to control, administer, and enforce the revenue laws of this state. Sections 20.21 and 213.05, Florida Statutes.

    
    

13. Petitioner has the burden of proving entitlement to the exemption that it seeks. To sustain its burden in this case, Petitioner must prove by a preponderance of evidence that it comes within the statutory definition of a religious institution or a charitable institution.

    
    

14. Section 212.08, Florida Statutes, exempts certain groups from payment of sales tax on goods purchased by them which would otherwise be subject to sales tax.. The exemptions relevant in this case are described in the following pertinent provisions of Section 212.08(7)(o)2., Florida Statutes.

    
    

    1. "Religious institutions" means churches, synagogues, and established physical places of 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 ser- vices to members, their families, and other

       church attendees. The term "religious insti- tutions" also includes state, district, 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 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 . . .. The term . . . also includes any nonprofit corporation 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.

       
       

    2. "Charitable institutions' means only nonprofit corporations qualified as nonprofit pursuant to s. 501(c)(3), United States Internal Revenue Code of 1954, as amended, and other nonprofit entities, the sole or primary function of which is to provide, or to raise funds for organizations which provide, one or more of the following services if

       a reasonable percentage of such service is provided free of charge, or at a substantially reduced cost, to individuals . . . that are unable to pay for such service:

       
       

       1. Medical aid for the relief of disease, injury, or disability;

          
          

       2. Regular provision of physical necessities such as food, clothing, or shelter;

          
          

       3. Services for the prevention of or rehabilitation of persons from alcoholism or drug abuse; the prevention of suicide; or the alleviation of mental, physical, or sensory health problems;

          
          

       4. Social welfare services including adoption placement, child care, community care for the elderly, and other social welfare services which clearly and substantially benefit a client population which is disadvantaged or suffers

       a hardship;

       * * *

       
       

15. According to Section 212.08(7)(o)2., Florida Statutes, the exemptions authorized under this section shall be strictly defined, limited, and applied in the enumerated categories. This provision is consistent with the well- established principle regarding construction of taxing statutes. That principle requires that tax exemptions be strictly construed against the taxpayer seeking them, and in favor of the State. Asphalt Pavers, Inc. v. Dept. of Revenue, 584 So.2d 55 (Fla. 1st DCA 1991); State Dept. of Revenue v. Anderson, 403 So.2d 397,399 (Fla. 1981); Green v. Pederson, 99 So.2d 292, 296 (Fla. 1957).

    
    

16. To qualify as a religious institution, Petitioner must clearly come within one of the five statutory definitions set forth in Section 212.08(7)(o)2.a., Florida Statutes. Three of these definitions establish that as a threshold requirement, the entity seeking an exemption as a religious institution must be a nonprofit corporation. The only witness for Petitioner admitted that the Christian-Muslim Church of God is not classified or registered as a nonprofit corporation. Thus, Petitioner's failure to meet this threshold requirement excludes it from qualifying as a religious institution under three of the five statutory definitions.

    
    

17. The remaining definitions of religious institutions authorize the following entities to be classified as such: (1) churches, synagogues, and

    established places of worship where nonprofit services and activities are regularly conducted; and (2) district, state, or administrative offices which assist or regulate customary activities of religious organizations or members. The Christian-Muslim Church of God failed to demonstrate that it comes within either of these definitions of "religious institutions".

    
    

18. Section 212.08(7)(o)2.a., Florida Statutes, provides that organizations qualified under this provision must regularly conduct or carry on nonprofit religious services and activities. Petitioner conceded that it does not regularly conduct or carry on religious services or activities. Therefore, Petitioner is not a church, synagogue, or established place of worship that qualifies as a religious institution for the purpose of receiving a tax exemption.

    
    

19. Section 212.08(7)(o)2.a., Florida Statutes, provides that state, district, or administrative offices are religious institutions if they assist or regulate the customary activities of religious organizations or members. Although the testimony indicated that Mr. Savas works out of his home on behalf Petitioner, the precise nature of the work was not specified. Petitioner failed to establish that the functions carried out by Mr. Savas assisted or regulated the customary activities of a religious organization or its members. Accordingly, Petitioner does not come within this definition of a religious institution.

    
    

20. To qualify as a charitable institution, an entity must be a nonprofit corporation qualified as a nonprofit under 501(c)(3) of the Internal Revenue Code of 1954, as amended, or another type of nonprofit entity. The primary function of such entity must be to provide, or raise funds for organizations which provide, certain statutorily prescribed services. Section 212.08(7)(o)2.b., Florida Statutes.

    
    

21. Petitioner presented no evidence establishing that it is a charitable institution. As previously stated, Petitioner admitted that it is not classified or registered as a nonprofit corporation or other type of nonprofit entity. Thus, Petitioner failed to meet the threshold requirement necessary for classification as a charitable institution. Consequently, it is unnecessary to determine whether Petitioner has met the other criteria set forth in this definition. Those criteria involve the type of services the organization provides and the fees charged for those services. Section 212.08(7)(o)2.b, Florida Statutes.

    
    

22. Petitioner presented no evidence to support its claim that it is a religious institution or charitable institution and, thereby, entitled to an exemption from taxes. Therefore, Petitioner failed to sustain its burden of proof.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a final order denying a consumer certificate of tax exemption to Petitioner, the Christian-Muslim Church of God (Allah).

DONE and ENTERED this 18th day of March, 1996, in Tallahassee, Florida.

CAROLYN S. HOLIFIELD

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-4076

To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact:

Respondent's Proposed Findings of Fact.

1. - 11. Accepted and incorporated to the extent not subordinate or unnecessary.

COPIES FURNISHED:

Ruth Ann Smith, Esquire Department of Revenue Post Office Box 6668

Tallahassee, Florida 32314-6668

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should consult with the agency that will issue the Final Order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA, DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA

CHRISTIAN-MUSLIM CHURCH OF GOD (ALLAH)

Petitioner,

Case No. 95-4076

vs. DOR 96-10-FOF

DEPARTMENT OF REVENUE,

Respondent.

/

FINAL ORDER

This cause came on before the Department of Revenue for the purpose of issuing a final order. The hearing officer assigned by the Division of Administrative Hearings heard this cause and issued a Recommended Order. A copy of the Recommended Order is attached to this Final Order. Petitioner timely filed exceptions to the Recommended Order, copies of which are attached hereto. In accordance with Rule 12-3.009, F.A.C., rulings on these exceptions are set forth below. For the reasons expressed herein, the Department adopts the Hearing Officer's Recommended Order. The Department has jurisdiction of this cause.

PRELIMINARY STATEMENT

The Department adopts and incorporates by reference the Hearing Officer's Preliminary Statement of the Recommended Order as if fully set forth herein.

FINDINGS OF FACT

The Department hereby adopts and incorporates by reference the findings of fact set forth in paragraphs 1 through 6, Findings of Fact of the Recommended Order.

The Department adopts and incorporates in this Final Order all of Findings of Fact Paragraph 7, except for the portion of the first sentence that states that Mr. Savas purchased his car in 1993. The record shows the purchase of the car was made by Mr. Savas in 1995.

The Department adopts and incorporates in this Final Order Findings of Fact

8 through 10.

CONCLUSIONS OF LAW

The Department hereby adopts and incorporates by reference the conclusions of law set forth in paragraphs 11 through 22, Conclusions of Law of the Recommended Order.

RULINGS ON EXCEPTIONS TO FINDINGS OF FACT

Petitioner has submitted seven (7) exceptions to the Hearing Officer's Findings of Fact in the Recommended Order. Exceptions 1, and 3 through 6 filed by Petitioner are rejected. Exception 2 is accepted to the extent it states that Petitioner does not hold worship services. The remainder of this exception is rejected. Exception 7 is rejected, except for the first sentence which indicates that the date of purchase of the vehicle was 1995, not 1993.

1. Petitioner's First Exception-- Finding of Fact No. 1: Petitioner's statements as to how Petitioner was advertised are not relevant and, therefore, are rejected.

   
   

2. Petitioner's Second Exception-- Finding of Fact No. 2: Accepted that Petitioner does not have worship services. This determination has been made by the Hearing Officer's Findings of Fact. See Findings of Fact No. 2 and 3. The remainder of this exception is rejected as being irrelevant.

   
   

3. Petitioner's Third Exceptions-- Finding of Fact No. 3: The Hearing Officer's Finding of Fact, Paragraph 3 of the Proposed Recommended Order, that Christian-Muslim Church of God (ALLAH) is not part of any established religion is supported by substantial competent evidence. Thus, Petitioner's exception to this finding is rejected. The statement that Petitioner's founder will write a "Consolidated Moral Bible" is not relevant, and is therefore rejected. The Hearing Officer's finding that Petitioner has generalized plans to establish regular religious services, but has not yet done so, is supported by substantial competent evidence. Therefore, Petitioner's exception to this finding is rejected. The statement as to how assemblies of the church will be organized by Petitioner in the future is not relevant, and is therefore rejected.

   
   

4. Petitioner's Fourth Exceptions- Finding of Fact No. 4: Petitioner's statements as to where Petitioner's funds are deposited is not relevant, and therefore is rejected. Petitioner's statements as to the type of donations its founder, Mr. Savas, personally makes are not relevant and, therefore, are rejected. The Hearing Officer found that Petitioner does not qualify as a "religious institution" under s212.08(7)(o) 2.a., Florida Statutes. The Hearing Officer's finding is supported by substantial competent evidence. Thus, Petitioner's exception to this finding is rejected. Petitioner's statement as to why Petitioner needs the sales tax exemption is not relevant and, therefore, is rejected.

   
   

5. Petitioner's Fifth Exceptions-- Finding of Fact No. 5: The Hearing Officer found that Petitioner is not registered as, or classified as, any type of legal entity. The Hearing Officer also found that the Petitioner is not a church or charitable institution as those terms are defined under s212.08(7), Florida Statutes for purposes of sales tax exemption. The Hearing Officer's findings are supported by the record and by substantial competent evidence. The

   remainder of Petitioner's exceptions are not material. Therefore, all of Petitioner's exceptions to Paragraph 5 are hereby rejected.

   
   

6. Petitioner's Sixth Exception-- Finding of Fact No. 6: The Hearing Officer found that Petitioner is not registered as, or classified as, any type of legal entity and that Petitioner does not qualify as a "charitable institution" pursuant to s 212.08(7)(o)2.b., Florida Statutes. These findings are supported by substantial competent evidence. Therefore, Petitioner's exception to this paragraph is rejected.

   
   

7. Petitioner's Seventh Exceptions-- Finding of Fact No. 7:

Accepted that Petitioner's founder purchased his car in 1995, and applied for a consumer's certificate of exemption at that time. The statements as to the beliefs of Petitioner's founder are irrelevant or immaterial, and are rejected accordingly.

CONCLUSION

The Department, based upon the Preliminary Statement, Findings of Fact, and Conclusions of Law, set forth by the Hearing Officer in her Recommended Order and adopted herein, sustains the denial of a consumer's certificate of exemption to Petitioner. Based on the foregoing, it is,

ORDERED: That Petitioner's request for a consumer's certificate of exemption be denied.

ENTERED in Tallahassee, Leon County, Florida this 10th day of May, 1996.

State of Florida DEPARTMENT OF REVENUE

L. H. FUCHS EXECUTIVE DIRECTOR

I HEREBY CERTIFY that the foregoing FINAL ORDER in CHRISTIAN-MUSLIM CHURCH OF

GOD (ALLAH), vs. DEPARTMENT OF REVENUE, Case No. 95-4076, has been filed in the official records of the Florida Department of Revenue this 10th day of May, 1996.

JUDY LANGSTON AGENCY CLERK

Copies furnished to:

Mr. John Savas

Christian-Muslim Church of God (ALLAH) 1416 Hill Drive

Largo, Florida 34640

Carolyn Holifield, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Linda Lettera, General Counsel

Ruth Ann Smith, Assistant General Counsel Department of Revenue

Post Office Box 6668 Tallahassee, Florida 32314-6668

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the Agency Clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the appellate District where the party resides. The Notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 95-004076

Orders for Case No: 95-004076