STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SARASOTA RETINA INSTITUTE )

RESEARCH FOUNDATION, )

)

Petitioner, )

)

vs. ) CASE NO. 96-1728

)

DEPARTMENT OF REVENUE )

)

Respondent. )

)

RECOMMENDED ORDER

On November 1, 1996, a formal administrative hearing in this case was held in Sarasota, Florida, before William F. Quattlebaum, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: David P. Johnson, Esquire

2201 Ringling Boulevard, Suite 104

Sarasota, Florida 34237

For Respondent: Ruth Ann Smith

Assistant General Counsel Department of Revenue Post Office Box 6668

Tallahassee, Florida 32314-6668 STATEMENT OF THE ISSUE

The issue in the case is whether the Petitioner qualifies as a "scientific organization" as defined at Section 212.08(7)(o)2.c., Florida Statutes, and is therefore entitled to a consumer certificate of taxation exemption.

PRELIMINARY STATEMENT

By application of November 8. 1995, the Sarasota Retina Institute Research Foundation, Inc. (Petitioner) seeks a Consumer Certificate of Exemption. The application was denied on the grounds that the Petitioner does not meet the requirements of Section 212.08(7), Florida Statutes. The Petitioner filed a request for hearing. The Petition filed asserts that the Petitioner is a "scientific organization" and a "charitable institution" and is entitled to the certificate of exemption. At the hearing, the Petitioner withdrew the assertion that it is a "charitable institution."

At the hearing, the Petitioner called no witnesses and had exhibits numbered 1-7 admitted into evidence. The Respondent presented the testimony of one witness and had exhibits numbered 1-4 admitted into evidence. The prehearing stipulation filled by the parties was also admitted.

A transcript of the hearing was filed. Both parties filed proposed recommended orders which were considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The Sarasota Retina Institute Research Foundation, Inc., (Petitioner) is a non-profit corporation exempt from federal income tax under Section 501(c)3 of the Internal Revenue Code.

   
   

2. The Sarasota Retina Institute (SRI) is a private medical practice consisting of three practicing ophthalmologists.

   
   

3. The three SRI ophthalmologists are on the seven-member board of directors of the Petitioner.

   
   

4. Documents provided by the Petitioner indicate that SRI has been involved in medical clinical studies. Although the Petitioner asserts that it provides financial support for the studies, the evidence fails to support the assertion.

   
   

5. The Petitioner's Articles of Incorporation state that it is organized for religious, charitable and educational purposes sufficient to qualify for federal tax exemption. The articles do not establish that the Petitioner was originally organized or is currently organized for scientific research. According to the Articles, the Petitioner's property is held for religious, charitable and educational purposes.

   
   

6. The Petitioner's application for IRS exemption states that the activities of the Petitioner are to offer a "source of revenue for educational purposes and research purposes" in the field of human eye disease. The evidence offered at hearing is insufficient to establish that the funds of the Petitioner are being used for research purposes.

   
   

7. The evidence indicates that majority of expenditures by the Petitioner are being made not for scientific purposes but, to cover travel and seminar expenses of the SRI ophthalmologists. The Petitioner's expenditures are insufficient to establish that the Foundation is a scientific organization.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

9. The Petitioner has the burden of proving by a preponderance of the evidence that it meets the applicable requirements for issuance of a Consumer's Certificate of Exemption. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (1st DCA 1977). The evidence fails to meet the burden.

   
   

10. The Petitioner offered no testimony at the hearing. Although counsel for the Petitioner essentially presented oral legal argument, the argument fails to provide a sufficient basis for Findings of Fact.

    
    

11. In relevant part, Section 212.08(7)(o)2, Florida Statutes, provides as follows:

    The provisions of this section shall be strictly defined, limited and applied in each category.

    * * *

    "Scientific organizations" means scientific organizations which hold current exemptions from federal income tax under s. 501(c )3 of the Internal Revenue Code and also means organizations the purposes of which is to protect air and water quality or the purpose of which is to protect wildlife and which hold current exemptions from federal income tax under s. 501(c )3 of the Internal Revenue Code.

    
    

12. In relevant part, Rule 12A-1.001(3)(k)1, Florida Administrative Code, provides as follows:

    
    

    The term "scientific organizations" means scientific organizations in Florida holding a current exemption from federal income tax under s. 501(c )3 of the Internal Revenue Code. This term also means organizations whose purpose is to protect air and water quality or protect wildlife in Florida and which hold current exemptions from federal income tax under s. 501(c )3 of the Internal Revenue Code.

    
    

13. The Petitioner asserts that it is a scientific organization holding a 501(c)3 federal tax exemption and is therefore entitled to a Florida Consumer Certificate of Exemption. Although the Petitioner is a 501(c)3 organization, the evidence fails to establish that the Petitioner is a "scientific" organization.

    
    

14. The expenditure of funds to subsidize the travel and educational expenses of the SRI ophthalmologists is insufficient to establish that the Petitioner is a scientific organization. The payment of director's expenses, and expenses related to bank charges and fund-raising do not constitute expenditures for research. There is no credible evidence that the Petitioner directly funds or otherwise sponsors medical research.

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 the Petitioner's application for a Consumer's Certificate of Exemption.

RECOMMENDED this 20th day of December, 1996, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1996.

David P. Johnson, Esquire

2201 Ringling Boulevard, Suite 104

Sarasota, Florida 34237

Ruth Ann Smith

Assistant General Counsel 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 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: 96-001728

Orders for Case No: 96-001728