The Issue This case was initiated by a letter dated October 22, 1984, from the Department of Revenue ("Department") to National Christian Network, Inc. ("NCN") informing the organization that its Consumer Certificate of Exemption Number 05- 00852-00-15 would be revoked effective November 22, 1984, in accordance with Section 212.084(3) Florida Statutes. John Fox, Executive Vice president, responded with a timely request for an administrative hearing. The Department contends that NCN, as a radio and television network, does not qualify for a religious exemption under Subsection 212.08(7)(a) Florida Statutes and regulations interpreting that law. NCN argues that it is entitled to the certificate as a religious, charitable or educational organization. The only witness produced by either party was Raymond Kassis, and the facts elicited through his testimony are uncontroverted. One exhibit, the Articles of Incorporation, was placed into evidence by stipulation. The Department submitted its Proposed Finding of Fact, Conclusions of Law and Recommended Order; these have been considered and the proposed findings of fact have been incorporated below.
Findings Of Fact National Christian Network, Inc. was incorporated as a Florida nonprofit corporation on October 11, 1978. Its purposes, as stated in Article II, Articles of Incorporation include the following: * * * To establish, operate and maintain television and/or radio networks and/or stations. To produce and broadcast to the general public religious, charitable and/or educational programs either by television or radio, or both, for the purpose of educating and instructing the general public in religious, charitable or educational matters; to promote, extend and improve religion, charity and education and to participate in religious, charitable and/or educational programs in the united states, [sic] including but not limited to the State of Florida; to promote programs designed to increase public awareness and understanding of the needs and activities of religion, charity and/or education in the several states, including the State of Florida, and to encourage the public to give support, financial and otherwise, to such purposes. To acquire, take, receive, purchase, own, hold, use, manage, lease, mortgage, pledge, encumber, sell and convey, or otherwise dispose of any property, including but not limited to real, personal and mixed, tangible and intangible; to issue bonds, notes, evidences of indebtedness, receipts and obligation; to receive donations, subscriptions and contributions; to make donations to organizations created for similar or like purposes, and to have and exercise all other corporate rights and powers, to do all lawful acts necessary or desirable to carry out its purposes consistent with the laws of the State of Florida (as they now exist or from time to time may be amended), and Sec. 501(c)(3) of the Internal Revenue Code (as it now exists or from time to time may be amended) and not inconsistent with these Articles of Incorporation. * * * The primary purpose of NCN, in the words of its President, is to operate a national television network. Transcript, p. 10. NCN maintains status as an organization under Section 501(c)(3) of the Internal Revenue Code and holds non-commercial, educational, F.C.C. licenses for radio and television. The network activities are conducted at NCN's facility in Cocoa, Florida, twenty-four hours a day, and consist primarily of religious services by its seventy-eight multi-denominational member churches. Members include Protestant, Catholic and Jewish organizations. Some, but not all, of the church services are produced directly in the studio. The facility does not include a chapel. NCN maintains a cost share plan which pays for the broadcasts. Member organizations who can afford to pay, contribute their share; the others are given free air time. Funds for the network are solicited over the air. Funds are also solicited for charitable, educational and religious projects of the member churches. Free air time is provided to a wide variety of charitable organizations for fund raising activities. Some educational programs are aired; however, the network is not part of the system established by the Florida Department of Education pursuant to Sections 229.805 or 229.8051 Florida Statutes. The essence of NCN is that of a conduit, a medium for other organizations to transmit religious worship services into the homes of its viewers and listeners. It also, to a lesser degree, provides the medium for organizations to conduct charitable and educational activities.
Recommendation On the basis of the foregoing, I recommend that the intended agency action be upheld and that Consumer Certificate of Exemption No. 05-00852-00-25 be revoked in accordance with Section 212.084(3) Florida Statutes. DONE and ORDERED this 21st day of October, 1985, in Tallahassee, Florida. MARY CLARK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of October, 1985.
The Issue The issue in this case is whether Respondent, the Department of Revenue, should grant Petitioner's application for a consumer's certificate of exemption from sales and use tax.
Findings Of Fact Petitioner is a nonprofit organization incorporated under the laws of the State of Florida on or about August 27, 1997. Petitioner applied to Respondent for a consumer's certificate of exemption from sales and use tax. While the application indicates that it is based on exemption status as an "enterprise zone," Petitioner clarified at final hearing that it actually was basing its application on exemption status as a "charitable institution." ("Enterprise zone" is not an exemption category under the applicable statutes. See Conclusions of Law, infra.) The IRS has determined that Petitioner is exempt from federal income tax under IRC Section 501(a) as an organization described in IRC Section 501(c)(3). A letter dated February 2, 1999, stated that Petitioner: was formed in 1997 to plan and implement redevelopment efforts in the Greater Newtown Community which lead to overall improvement in the quality of life of its residents. In the short time since our inception, we have responded to community needs by implementing a broad range of programs that will have a positive impact on our community. But from the evidence presented (which included no testimony from either party), it is difficult to ascertain factual detail about Petitioner, its activities, or its finances. In addition to grant application and fund-raising activities, it appears that Petitioner has been involved in informational and participation-recruitment meetings and information-gathering surveys for planning purposes (called the Business Retention and Expansion Survey). Petitioner also appears to have been involved in a Storefront Renovation Program and several community celebrations. Petitioner has plans for other economic and community redevelopment activities. But it cannot be ascertained from the evidence which of the other economic development activities have taken place and which are still in grant application or planning stages. For example, documentation regarding Petitioner's involvement in one activity refers to the activity as the "proposed WAGES Employment Challenge." Petitioner obtained $128,000 of funding from the City of Sarasota for seed money for its economic redevelopment and other activities. Petitioner budgeted to spend the $128,000 in 1998. The entire budget consists of salaries, fringe benefits, and overhead expenses. According to a "Profit and Loss" statement for January through October 1998, Petitioner spent $30,581.49 during that time period. All of those expenditures were in the category of payroll and overhead expenses. One activity referenced in Petitioner's documentation is Petitioner's "partnering" with financial institutions and mortgage brokers to process mortgage loans for affordable housing. In that case, the expenditures would be by the other institutions, not by Petitioner. There is no information as to any other expenditures made by Petitioner.
Recommendation Based 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 application for a consumer's certificate of exemption from sales and use tax. DONE AND ENTERED this 5th day of November, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of November, 1999. COPIES FURNISHED: Bill Nickell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Cynthia E. Porter, Executive Director Greater Newtown Community Redevelopment Corporation 1751 Dr. Martin Luther King, Jr., Way Sarasota, Florida 34234 Joseph C. Mellichamp, III, Esquire Office of Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 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
The Issue The issue for determination is whether Petitioner should be granted a consumer’s certificate of exemption pursuant to Subsection 212.08(7)(o), Florida Statutes.
Findings Of Fact The Department of Revenue (Respondent) is the state agency charged with enforcement of Chapter 212, Florida Statues, and the issuance of certificates of exemption. Unto Others, Inc. (Petitioner) is an organization incorporated in the State of Florida as a non-profit corporation. Petitioner’s Articles of Incorporation, Article II, states Petitioner’s purpose as follows: The purposes for which the Corporation [Petitioner] is organized are exclusively religious, charitable, scientific, literary, and educational within the meaning of section 501(c)(3) of the Internal Revenue Code of 1986 or the corresponding provision of any future United States Internal Revenue law. Petitioner made application to the Respondent for a certificate of exemption as a charitable institution pursuant to Subsection 212.08(7)(o)2.b, Florida Statutes. Petitioner did not make application for an exemption as a scientific, religious, or educational institution, but it may in the future apply under these criteria. By Notice of Intent to Deny (Notice) dated January 30, 1998, the Respondent notified Petitioner that its application was being denied. The grounds stated in the Notice for the denial were the following: (1) "Your organization does not provide, nor does it raise funds for charitable institutions which provide one or more of the charitable services listed in the statute [Subsection 212.08(7)(o)2.b, Florida Statutes]."; and (2) "Your organization fails to meet the qualification for exemption from sales and use taxation, as set forth in Section 212.08(7), Florida Statutes." Currently, Petitioner’s sole function is the raising of funds to enable Petitioner to rehabilitate people and dwellings. All of Petitioner’s activities are conducted by non-paid volunteers. No evidence was presented to show that Petitioner rehabilitates any person or dwelling, or holds religious services. No evidence was presented to show that Petitioner governs or administers any office within any hierarchy of a larger organization. No evidence was presented to show that Petitioner participates with or controls another organization. No evidence was presented to show that Petitioner expends more than 50 percent of its expenditures toward any charitable service. No evidence was presented to show that Petitioner disburses more than 50 percent of its expenditures directly for a charitable service or to any entity that directly provides or performs any charitable service. No evidence was presented to show that Petitioner directly provides or performs any charitable service for any entity or person; or that Petitioner provides any goods or services as a charitable service. No evidence was presented to show that Petitioner directly provides a reasonable percentage of any charitable service free or at a substantially reduced cost to persons, animals, or organizations that are unable to pay for such services. No evidence was presented to show that any charitable service was provided free or at a substantially reduced cost. No evidence was presented to show that persons, animals, or organizations actually received any charitable service and that those persons, animals, or organizations were unable to pay for such service(s). Petitioner does not currently provide any of the services listed in Subsection 212.08(7)(o).
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's certificate of exemption to Unto Others, Inc. DONE AND ENTERED this 31st day of August, 1998, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 31st day of August, 1998.
Findings Of Fact 1 In either April or May, 1983, HRS District III, Respondents in this case, advertised a request for proposals to operate a spouse abuse shelter in a subdistrict of HRS District III in accordance with the following schedule: The request for proposal (RFP) package was to be picked up by 5 p.m., May 20, 1983; the applicant was to notify HRS of its intent to submit a proposal by 5 p.m., May 20, 1983; and the proposal was to be filed with HRS no later than 5 p.m., June 3, 1983. The contract in question was for the period July 1, 1983 through June 30, 1984. Linda Tucker, President of the Petitioner's Board of Directors, found out about the solicitation from her Vice President, Alice Mulrooney, who had received word of it through an administrative letter sent to her in her capacity of an officer on the County Rape Council. Ms. Tucker and Ms. Mulrooney both telephonically spoke with Carol Laxton, the HRS official in Gainesville who was stewarding this solicitation. It was not clear which of the two spoke with her first. Ms. Tucker spoke with Ms. Laxton on May 20, 1983, and requested to be furnished with a copy of the RFP. Both Tucker and Mulrooney indicated they told Ms. Laxton that Petitioner was not yet incorporated. Both agree Ms. Laxton advised them the requirement for incorporation could be waived and that the proposal should be submitted anyway, including a letter from Petitioner's lawyer to the effect that the incorporation papers had been forwarded to the office of the Secretary of State. On May 25, 1983, Petitioner contacted representatives of the Hernando County Commission relative to county funding of at least a portion of that local source of matching funds required to make up at least 25 percent or the overall proposed operating budget as required by Florida Statutes and as set out in the proposal. At that time, Petitioner was advised that while the Commission supported the Petitioner's proposal in concept and fully hoped to lend its financial support, it could not officially do so until after the county's budget hearings were completed and it was determined that the requested funds were in fact available. A letter to this effect was submitted to Ms. Laxton by the Chairman of the Commission on June 7, 1983. In the interim, before the proposal was submitted, both Ms. Tucker and Ms. Mulrooney discussed this possible defect, as well, with Ms. Laxton. Again, both ladies contend Ms. Laxton advised them this criterion could be waived, as well. Petitioner submitted its proposal on time. However, at the time of submittal, the Petitioner was not in fact incorporated. The proposed corporate charter was forwarded to the Secretary of State on June 2, 1983 (a letter to this effect was sent the same day to Ms. Laxton by Petitioner's attorney), and approved on June 13, 1983. Also, at the time of submission, the proposal listed as budgeted resources donated land and two homes having a rental value of $4,800 per year as an in-kind resource, $182 as cash client contributions and $3,750 as a cash contribution by the Hernando County Commission. It is this last funding source that was committed in theory only and was not firm. Taken together, the three sources totaled $8,732, which would be slightly over 28 percent of the total yearly budget of $31,052. However, since the commitment from the County Commission was not firm and was contingent on funds being available, it could not be considered; and the remaining sum of $4,982 is only 16 percent of the budget. Ms. Laxton admits talking with both Tucker and Mulrooney on several occasions about the proposal and the difficulties they were having. They indicated to her they were having problems getting incorporated, but that their attorney was working on it. She admits telling them to send whatever they had, which included a status letter from their attorney. She also admits stating to them that some requirements of the RFP could be waived, but does not think incorporation was one and is sure she did not tell them the matching funds requirement could be waived. After hearing the evidence presented and considering it along with its relative probabilities and improbabilities, it is found that the Petitioner's representatives may have reasonably inferred the incorporation requirement could be waived. However, it is unlikely that Ms. Laxton would have even inferred anything as significant and sensitive as a matching fund requirement could be waived. If Ms. Tucker and Ms. Mulrooney inferred that from Ms. Laxton's comments, it was unfortunate, but in error. In fact, the County Commission did ultimately approve a commitment to Petitioner in the amount of $3,750. They have also received additional cash contributions of $2,300 and additional in-kind contributions of $5,000. None of these latter resources were in hand or firmly committed by the June 3, 1983 proposal submission deadline, however. At the present time, Petitioner is operating a shelter without Respondent's funds. They have requested assistance from the successful bidder, but have been turned down. There is, however, substantial but non-financial community support for Petitioner's operation.
Recommendation Based on the foregoing, it is RECOMMENDED: That Petitioner's protest be rejected. RECOMMENDED this 4th day of January, 1984, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of January, 1984. COPIES FURNISHED: LINDA TREIMAN, ESQUIRE 11 NORTH MAIN STREET BROOKSVILLE, FLORIDA 33512 JAMES A. SAWYER, JR., ESQUIRE DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1000 N.E. 16TH AVENUE BUILDING H GAINESVILLE, FLORIDA 32601 MR. DAVID PINGREE SECRETARY DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BOULEVARD TALLAHASSEE, FLORIDA 32301
Findings Of Fact At all times material hereto, Respondent held a class "H" certificate of registration numbered GH-8500083 issued by Petitioner pursuant to Chapter 496, F.S. According to Respondent's application for registration which was submitted on or about January 23, 1984, Respondent is the President of an organization known as, "Citizens Benevolent Association - Displaced Inmate Dependent Mission." The purpose of that organization is to give housing, employment, food, clothing and toys to the dependents of inmates in central Florida. It was further indicated that the organization would raise less than $4000 each year, and contributions it received would be used to carry out the purpose of the organization. In February, 1986, Willie Rister, regional office supervisor and investigator for Petitioner, attempted to meet with Respondent concerning his charitable organization, and particularly its financial records. After two unsuccessful attempts to meet with Respondent, Rister contacted Respondent on March 12, 1986, and was told that all financial records of the organization had already been turned over to him. Respondent's financial records fail to reveal or inaccurately reveal the income and expenses of the organization. Specifically, they fail to account for all contributed funds and in-kind contributions, as well as disbursements. It appears that the organization's funds and Respondent's personal funds have been comingled, and no distinct records have been kept. It is not possible to determine which expenditures are personal and which are to carry out the purpose of the organization. The financial records are simply a listing of receipts without any explanation of the source or method of raising these funds, which appear to total approximately $9000 for 1985. Rister testified that he was unable to find any people who had been helped by Respondent or his organization. Contributed funds were used primarily for the personal expenses of Respondent or his family, or here not fully accounted for and were not used for any charitable purpose associated with the organization. Respondent advertised his organization in the Sebring News, indicating that his organization finds jobs and housing for the dependents of inmates. There is no evidence that his organization ever performed these services, and in fact the evidence presented indicates it did not.
Recommendation Based upon the foregoing, it is recommended that Petitioner issue a Final Order revoking Respondents certificate of registration numbered GH-8500083. DONE AND ENTERED this 1st day of December, 1986 in Tallahassee, Florida. DONALD D. CONN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 Filed with the Clerk of the Division of Administrative Hearings this 1st day of December, 1986. COPIES FURNISHED: Honorable George Firestone Secretary of State The Capitol Tallahassee, Florida 32399 James V. Antista, Esquire Department of State The Capitol Tallahassee, Florida 32399 John Joseph Heinrich 109 North Self Avenue Avon Park, Florida 33825
The Issue The issue for consideration in this case is whether Petitioner should be issued a Consumer Certificate of Exemption from Florida sales tax.
Findings Of Fact By stipulation prior to the taking of any testimony, the parties agreed that the only option upon which Petitioner seeks an exemption from sales tax is that relating its status as an administrative office of the organization. Petitioner agrees that it does not conduct regular church services within the meaning of Section 212.08(7)(o), Florida Statutes. At all times pertinent to the issues herein, the Petitioner, Construction for Worldwide Evangelism, Inc., was a non-profit corporation registered as such with the Florida Secretary of State, which has been granted exemption from Federal Income Tax under Section 501(c)3, of the Internal Revenue Code. It was established in 1991, and its purpose is to build churches in Third World countries for church mission boards and other missionary organizations, including Baptist International Missionaries, Inc. (BIMI). BIMI trains and places missionaries and provides stewardship of individual members’ funds and insurance. Petitioner also builds facilities for the Association of Baptists for Worldwide Evangelism (ABWE). BIMI and ABWE are the largest and second largest missionary sponsoring organizations in the country with each sponsoring more than 1,000 missionaries in the field. Petitioner also works with other Baptist missionary organizations which are not as large as those previously mentioned. These organizations all have the same purpose -- to spread the word of redemption and salvation through Jesus Christ. Since its inception, Petitioner has been guided in its work by its mission statement and its statement of faith. Both are taken from scripture and are included in the basic tenets of Christian faith. It was founded specifically to fulfill God’s great purpose -- to preach to the world. The missionary organizations referenced above do not build their own missions but look to churches and organizations like the Petitioner to raise funds and build facilities including churches, medical clinics, bible institutes, and other educational buildings. When the Petitioner was founded, it was obvious that funds would be needed to do this work. There are other missionary organizations around the country which build facilities as Petitioner does. The difference between these organizations and Petitioner is that Petitioner has no paid staff, and it takes a project from design conception through completion. Other organizations seem to do their projects in stages, based on the availability of volunteers to do the required work. Nothing requires Petitioner to limit approval of requests to those from recognized missionary boards. Other denominational churches make requests to Petitioner but most are turned down because the other denominations have their own funding. Petitioner tries to limit itself to “independent” churches, but it has no formal agreement, other than the Bible, with any of the recognized missionary boards. The missionary boards do not provide their own funds to Petitioner. Financial support comes from individual churches which provide money to their missionary boards which is earmarked for mission construction. Requesters need not be a particular denomination of Baptist congregation. Petitioner will talk with any organization that will agree with its Statement of Faith. However, Petitioner’s Board of Directors has the final authority to decide if a request will be granted. Need for a specific project is communicated to Petitioner through the various missionary boards operating in this country; through direct contact from missions in the field; and from individual churches which need help in organizing a project they want to do. When Petitioner receives a request, because of the volume of requests received, the Board of Directors tries to evaluate the need in the area, the requester’s doctrinal position, and the availability of resources to the local group which will do the work if approved. The Petitioner sends evaluators to the field to examine the proposed facilities. All procedures are included in its Project and Guideline Manual which details with particularity how Petitioner will do each step from evaluation, through purchasing of supplies after design, through securing and forwarding of volunteers to completion, close-down, and the return of the volunteers. Each proposed project is evaluated in accordance with the terms of the Manual. In a typical project, a determination is first made whether the applicant is an existing church which needs help. This is a requirement because Petitioner does not start churches. Once they are satisfied the applicant is an existing church, the evaluators determine how much of a project is needed and how much resources the local organization has, and then look to further evaluation against the twenty-five or so other factors for consideration. Most of this information is gathered from the applicant or a mission board either by Mr. Puleo, an electrical contractor who is president of the Petitioner organization, or by the vice-president of the organization. Once all pertinent information is on hand and the project deemed worthy, a project profile is developed. Petitioner has several projects ongoing at the same time. The initial step is to pray for guidance from God as to which project to do. Once a project is approved, an on-site inspection is conducted to develop information as to whether there is a real need for Petitioner to be involved or whether the local people can accomplish the project by themselves. This on- site inspection is usually done by a member of the Petitioner’s Board and by a committee chairperson. The on-site survey determines what is available at the site, and information is developed as to the logistics needed and the personnel required. Another part of the planning relates to the ministry to be supported. An evaluation is conducted of the on-site missionary and how well that individual operates, how long he plans to stay there, and whether he is flexible enough to work with both locals and volunteers. After this evaluation is completed, a conclusion is drawn as to whether Petitioner can take on the project and what will be needed. After prayer and consideration, a decision is made as to whether to go forward with the project. The funds to do the work and to buy the required materials come from Baptist churches across the country, businesses, other organization, and individuals. All the workers come from individual churches who support Petitioner’s program. They work on a volunteer basis without pay. When a church contacts Petitioner to have a facility built, a representative of the Petitioner goes to that church, conducts a service, and tries to enlist the financial and volunteer support of the church membership. In addition, periodically, conferences of pastors seek a presentation from Petitioner. Any funds received as a result of those presentations usually come from the specific church’s general fund and volunteers for the project from that church’s membership. In support of its fund and volunteer raising activities, Petitioner publishes a brochure regarding its activities which is widely distributed through supporting churches. It outlines how readers of the brochure can assist or seek other information. Petitioner also published a newsletter which is circulated to any volunteer who has gone on a project with it, to churches, and to others on the organization’s mailing list. This newsletter describes what is happening in the organization and what is planned. A tract is also passed out to the public by which Petitioner seeks to raise funds and attract disciples. No one who works with Petitioner is paid. All funds raised go to the cost of constructing the building, to the cost of travel and support of personnel at the building site, and to the cost of transportation of supplies. In that regard, a portion of the supplies and equipment needed for a project is often donated as is the cost of transporting that material to the job site. It should be noted that when Petitioner works on a project in a foreign country, often volunteers from that local church subsequently help with work and funds on other projects within that country. Included in every program is a devotional component. Guidelines exist which cover the duties and responsibility of the devotional committee of each work force, the chairman, and the individuals. These guidelines are prepared for each day of the program’s existence and call for a thirty minute to one hour devotional each night. Petitioner, which originated in Florida, now has branches in both Georgia and Michigan which are recognized by those states. Both the Georgia and Michigan organizations do work identical to that done by the Florida group, but everything they do is coordinated and controlled through the Petitioner’s Tampa office. Since its inception in 1991, Petitioner has built seventeen or eighteen facilities - ten or eleven were churches, two were Bible institutes, and one a radio station in the Caribbean area and South America. The average church costs between $45,000 and $50,000, although one church in Bolivia was built for $15,000 and one will be built for $20,000. Medical facilities are more expensive. The facilities constructed by Petitioner have a positive impact on the mission for which they are constructed. They tend to enhance the success of the mission and improve its local standing. Petitioner previously held a Certificate of Exemption from sales tax from the Department. Neither the Petitioner’s organization nor the statute under which certificates are granted has changed in the interim between the granting of the prior certificate and the denial of the current application for renewal.
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 Petitioner an exemption from sales and use tax. DONE AND ENTERED this 26th day of August, 1997, in Tallahassee, Leon County, Florida. _ ARNOLD H. POLLOCK 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) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 1997. COPIES FURNISHED: Mark M. Schabacker, Esquire Schabacker, Simmons and Dunlap Suite 2500 100 North Tampa Street Tampa, Florida 33602 William B. Nickell, Esquire Department of Revenue Suite 304 501 South Calhoun Street Tallahassee, Florida 32301 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
The Issue Whether Petitioner is entitled to a consumer's certificate of exemption from sales tax as a "charitable institution" as that term is defined by Section 212.08(7)(o)2b., Florida Statutes.
Findings Of Fact Petitioner is a nonprofit organization incorporated under the laws of the State of Florida as a corporation. Petitioner has applied to Respondent for a certificate of exemption from sales and use tax based on its claim that it is a "charitable institution" within the meaning of, and pursuant to the provisions of, Section 212.08(7)(o)2.b., Florida Statutes. 2/ The Internal Revenue Service has determined that Petitioner is exempt from federal income tax under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3). Edy Sanon, Petitioner's executive director, testified in general terms as to the services performed by Petitioner to persons of Haitian descent. Based on that general testimony, it cannot be determined with any degree of certainty the precise services performed by Petitioner. Mr. Sanon testified that his organization provides translation services and referral services that assist Haitian immigrants in adjusting to life in the United States, becoming employable, and obtaining services from various government agencies. Petitioner engages in fund raising and searches for governmental grants for a center where people can come for help. The extent of its resources expended on fund raising was not established. Mr. Sanon testified that Petitioner provides its services free of charge and that it served approximately 800 clients last year. Chapter 212, Florida Statutes, imposes a tax on sales, use and other transactions. Respondent is the agency of the State of Florida charged with administering Chapter 212, Florida Statutes, and its duties include the issuance of certificates of exemption from tax pursuant to Section 212.08(7)(o), Florida Statutes. Pursuant to its rule-making authority, Respondent has adopted Rule 12A-1.001, Florida Administrative Code, to implement the provisions of Section 212.08(7)(o), Florida Statutes. Although Petitioner has been recognized as a nonprofit organization by the Internal Revenue Service, Petitioner must receive a certificate of exemption from Respondent to be exempt from Florida's tax on sales, use, and other transactions imposed by Chapter 212, Florida Statutes. The provisions of Section 212.08(7)(o), Florida Statutes, and Rule 12A-1.001, Florida Administrative Code, provide the criteria for the exemption sought by Petitioner. Section 212.08(7)(o), Florida Statutes, provides, in pertinent part, an exemption from sales tax as follows: (o) Religious, charitable, scientific, educational, and veterans' institutions and organizations. There are exempt from the tax imposed by this chapter transactions involving: * * * b. Sales or leases to nonprofit religious, nonprofit charitable, nonprofit scientific, or nonprofit educational institutions when used in carrying on their customary nonprofit religious, nonprofit charitable, nonprofit scientific, or nonprofit educational activities . . . * * * The provisions of this section authorizing exemptions from tax shall be strictly defined, limited, and applied in each category as follows: * * * b. "Charitable institutions" means only nonprofit corporations qualified as nonprofit pursuant to s. 501(c)(3), 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 persons, animals, or organizations that are unable to pay for such service: * * * (IV) 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 . . . 3/ Rule 12A-1.001(3)(g), Florida Administrative Code, implements the provisions of Section 212.08(7)(o), Florida Statutes, and provides, in pertinent part, as follows: (g)1. "Charitable institutions" means only nonprofit corporations qualified as nonprofit pursuant to s. 501(c)(3), United States Internal Revenue Code, 1954, as amended, and other nonprofit entities that meet the following requirements: the sole or primary function is providing a "qualified charitable service" as defined in this subsection; and a reasonable percentage of such service is provided free of charge, or at a substantially reduced cost, to persons, animals, or organizations that are unable to pay for such service. * * * 3.a. For the purpose of this subsection the following terms and phrases shall have the meaning ascribed to them except when the context clearly indicates a different meaning: I. "Persons unable to pay" means persons whose annual income is 150 percent or less of the current Federal Poverty Guidelines . . . * * * "Substantially reduced cost" means the normal charge, market price, or fair market value to a purchaser or recipient, diminished in an amount of considerable quantity. "Sole or primary function" means that a charitable institution, excluding hospitals, must establish and support its function as providing or raising funds for services as outlined in subparagraphs 1. and 2. above, by expending in excess of 50.0 percent of the charitable institution's operational expenditures towards "qualified charitable services", as defined in subparagraph 2.a. - g. within the charitable institution's most recent fiscal year. Petitioner established that it is a nonprofit organization. Petitioner did not present any financial data at the formal hearing. In the absence of that financial information, it cannot be found that Petitioner disburses more than fifty percent of its expenditures to provide or raise funds for a provider of a statutorily listed service. The absence of that information is fatal to Petitioner's application. 4/ The unchallenged testimony of Mr. Sanon was sufficient to establish for the purposes of this proceeding that Petitioner does not charge for its services. Petitioner did not establish at the formal hearing the ability of any of its client to pay a reasonable fee for the services provided by Petitioner. The general testimony of Mr. Sanon failed to establish that the translation, referral, and other services provided by Petitioner are "social welfare services" within the meaning of Section 212.08(7)(o)2.b., Florida Statutes. 5/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order that denies Petitioner's application for a certificate of exemption. DONE AND ENTERED this 1st day of December, 1998, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 1st day of December, 1998.
The Issue Whether the Health Care Cost Containment Board correctly determined the amount of the Public Medical Assistance Trust Fund assessments for the period April 1, 1986, through March 31, 1987, and the period April 1, 1987, through December 31, 1987, attributable to the operation of the Petitioner?
Findings Of Fact These findings of fact were stipulated to by the parties. Golden Glades Regional Medical Center, formerly known as Miami General Hospital, is a 352-bed acute-care hospital located at 17300 NW 7th Avenue, Miami, Dade County, Florida. It holds HRS license 2288 and has been assigned HCCB number 10-0222. Its fiscal year is the calendar year. It has been owned by Golden Glades Regional Medical Center, Ltd., a Florida Limited partnership, since December of 1987. As of January 1, 1986, and for sometime prior to that, the hospital was known as Miami General Hospital and operated with a fiscal year ending March 31. On August 15, 1986, the HCCB certified to HRS that 1.5 percent of the $40,101,199 net annual operating revenue of Miami General Hospital for its fiscal year ending March 31, 1986, was $601,517.98. (Hospital Exhibit 1) As of January 1, 1987, the owner of Miami General Hospital was Miami General Hospital, Inc. (The majority shareholder of Miami General Hospital, Inc., was International Medical Centers, Inc., ("IMC"). Miguel Recarey, Jr., was president of IMC). (HX 2, 3, 4, 5, 6 and 9) Under subsection (7) of Section 407.05, Fla. Stat., and HCCB Fla. Admin. Code Rule 10N-1.004(3)(a), an audited actual report for fiscal year ending March 31, 1987 (hereafter "the 1987 audited actual report") was due within 120 days of that date; i.e., on or about July 31, 1987. However, on May 14, 1987, prior to the date the foregoing report was required to be filed, IMC was placed in receivership by the Florida Department of Insurance in Leon County Circuit Court Case No. 87-1456. On June 2, 1987, HRS was notified by Miami General Hospital that the hospital was in receivership. (HX 7) On June 18, 1987, an involuntary petition for bankruptcy was filed in the United States Bankruptcy Court for the Southern District of Florida, in Case No. 87-2131, "In re: Miami General Hospital". The Bankruptcy Order (HX authorizing the sale of the hospital found as follows: The hospital has been operating with losses of about $1,000,000 per month for sometime. The hospital was without funds to operate other than monies supplied from IMC (which itself had been placed in receivership) or use of cash collateral as to which First American Bank and Trust claimed a secured lien. On June 29, 1987, the HCCB was notified by Miami General Hospital that Miami General Hospital had been placed in receivership May 14, 1987, and that it was placed in bankruptcy June 18, 1987. (HX 8) On June 29, 1987, Miami General Hospital timely requested an extension of time to complete or provide the 1987 HCCB prior year report contending that the receivership and bankruptcy placed the hospital in a position where it was not able to complete its financial statements. In addition, the HCCB was notified by Miami General Hospital that the hospital did not have authority to retain an accounting firm to provide audited financial statements. (HX 8) (On July 24, 1987, the HCCB granted that extension request and advised the hospital that the report should be filed no later than 60 days following the Bankruptcy Court's approval of the hiring of an accounting firm to perform the audit.) (HX 13) In the meantime, on July 9, 1987, the assets of Miami General Hospital were sold by the trustee, free and clear of all claims, to First American Bank and Trust Company (FABT). (HX 10, 11) On August 4, 1987, the HCCB was notified by Miami General Hospital that the Bankruptcy Court had instructed the hospital's management team to file all reports and audits and that a copy of the HCCB's letter of July 24, 1987, would be saved for the new owners to keep on file. (HX 14) The letter of August 4, 1987, was not acknowledged by the HCCB. On or about August 8, 1987, an application for change of ownership of the hospital's license was received by HRS. That application reflected a change of ownership date of July 9, 1987, and indicated G. H. Corporation of Miami, c/o First American Bank and Trust - Legal Counsel, as owner of the hospital. (HX 12) On August 25, 1987, a bill of sale and trustee's deed, was executed from the trustee to G. H. Corporation of Miami, a Florida corporation. (HX 15, 16, 17) On August 25, 1987, license 2232 was issued by HRS to G. H. Corporation of Miami, d/b/a Miami General Hospital. (HX 18) Under HRS licensure laws and HCCB rules, a change of ownership occurred. On September 1, 1987, C & S Health Corp. submitted an application to HRS for change of ownership of the hospital reflecting a date of change of ownership of October 26, 1987. (HX 19) On September 4, 1987, a 1987 prior year report for Miami General Hospital was submitted by G. H. Corporation to the HCCB. (HX 20) The report was prepared using unaudited data. Receipt of that report was acknowledged September 16, 1987, by the HCCB (HX 21), but the report was deemed incomplete by the HCCB because it lacked audited financial statements, and a complete report, including audited financial statements, was requested. On September 28, 1987 the HCCB was notified that G. H. Corporation of Miami owned the land and buildings comprising Miami General Hospital as of August 25, 1987. (HX 22) The HCCB acknowledged this change of ownership November 17, 1987. (HX 23, 24) By special warranty deed dated December 5, 1987 (HX 25), ownership of the hospital was transferred from G. H. Corporation of Miami to Golden Glades Regional Medical Center, Ltd., which is the current owner of the facility. On December 7, 1987, Golden Glades Regional Medical Center, Ltd., filed a hospital license application with HRS. (HX 26) On December 8 and 10, 1987, the HCCB was notified that Golden Glades Regional Medical Center, Ltd., purchased Miami General Hospital on December 9, 1987 and in HX 28, that it desired to change its fiscal year to that of the calendar year. (HX 27, 28) On December 10, 1987, license 2277 was issued to Golden Glades Regional Medical Center, Ltd., d/b/a Miami General Hospital. (HX 29) On December 16, 1987, Golden Glades Regional Medical Center, Ltd., through counsel, advised the HCCB that, while wishing to comply with all applicable rules and regulations, literal compliance may be difficult due to the prior bankruptcy. The hospital also delayed changing its fiscal year. (HX 30) On December 23, 1987, the HCCB was provided with further explanations regarding the 1987 audited financial statements. By correspondence dated December 23, 1987, the HCCB was notified, "by way of further explanation, on May 14, 1987 Miami General Hospital was placed under State receivership by the Department of Insurance, and the Department operated the Hospital until it was sold to First American Bank and Trust (FABT) on June 18, 1987. FABT operated the hospital until it was sold to Golden Glades Regional Medical Center, Ltd. on December 9, 1987. The deed was recorded on December 11, 197. Because of the wrongdoing of the former owners that led to the State control, subsequent bankruptcy sale and criminal convictions of several of the former owners of the Hospital, the filing of audited financial statements is impossible. The new owners of the Hospital are totally unrelated to its former owners". 1/ (HX 31) On December 10, 1987, HRS license 2285 was issued to Golden Glades Regional Medical Center, Ltd. (HX 32) On March 3, 1988, the HCCB was notified that the hospital had been the subject of bankruptcy and that several of its former owners (IMC) had been prosecuted for matters relating to the operation of care services. (HX 35) aa. On April 14, 1988, Golden Glades Regional Medical Center, Ltd., through counsel, requested a waiver of the requirement to file an audited actual report for the hospital's fiscal year 1987, which, in this case, involves the period from about December 6, 1987, to December 31, 1987. (HX 36) bb. On May 13, 1988, the hospital objected to being assessed based on data supplied by Miami General Hospital for that hospital's 1986 fiscal year and notified the HCCB of the several changes of ownership of the hospital during the calendar year 1987. (HX 37) cc. On February 13, 1989, the HCCB was again requested to address assessments on Golden Glades Regional Medical Center. (HX 38) dd. On February 14, 1989, the HCCB was notified of approval by Medicare of the change in the hospital's fiscal year and the unsuccessful negotiations to sell the hospital to Jackson Memorial. (HX 39) ee. On March 14, 1989, HCCB certified to HRS that Golden Glades Regional Medical Center (hereafter, "Golden Glades") had not submitted a prior year actual report for fiscal year ending March 31, 1988, and therefore HCCB certified that the 1987 net revenue of Golden Glades was that shown by Miami General Hospital's most recent prior year report, which was for March 31, 1986. (HX 40) ff. On October 19, 1989, HCCB certified that Golden Glades had not submitted a prior year report for the fiscal year ending December 31, 1987, but certified to HRS that for purposes of assessments, 1.5 percent of $40,101.189 (the net revenue in Miami General Hospital's March 31, 1986 report) was $601,518. (HX 50) gg. On November 17, 1989, HCCB notified HRS that Golden Glades Regional Medical Center had filed financial statements for the year ended December 31, 1988, however, the audit was not finalized. (HX 51) Net revenue in the financial statements for the year ended December 31, 1988, was $10,599,690. One and a half percent of that amount is $158,995. The notification of November 17 was not a certification by the HCCB. Golden Glades Regional Medical Center, Ltd., is a limited partnership. Its general partner is CNS. Collection and disbursement of Public Medical Assistance Trust Fund monies pursuant to Section 395.101(2), Florida Statutes, is the responsibility of the Department of Health and Rehabilitative Services and not the Respondent. The Department of Health and Rehabilitative Services was not a party to these proceedings. The Respondent is only responsible for calculating the amount of a hospital's Public Medical Assistance Trust Fund assessment and certifying the amount of the assessment to the Department of Health and Rehabilitative Services. The Respondent used the audited actual data for the fiscal year ending March 31, 1986, in calculating the Public Medical Assistance Trust Fund assessment of the Petitioner for the period of April 1, 1986, through March 31, 1987, and the period of April 1, 1987, through December 31, 1987. The Respondent is required by Section 395.101(2), Florida Statutes, to certify the Public Medical Assistance Trust Fund assessment of a hospital within six months after the end of the hospital's fiscal year. No exception is provided for changes in ownership of the hospital. A change in ownership does not affect the Respondent's responsibilities under Section 395.101(2), Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be issued dismissing, with prejudice, the Petitioner's Petitions in these cases. DONE and ENTERED this 31st day of May, 1990, in Tallahassee, Florida. LARRY J. SARTIN 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 31st day of May, 1990.
The Issue The issue in this case is whether Petitioner, Affordable Home Ownership Corporation, is eligible for a consumer certificate of exemption as a charitable institution pursuant to Section 212.08(7)(o), Florida Statutes.
Findings Of Fact Petitioner, Affordable Home Ownership Corporation (hereinafter referred to as "AHO"), is a Florida nonprofit corporation. Respondent, the Department of Revenue (hereinafter referred to as the "Department"), is an agency of the State of Florida. Among other things, the Department is charged with responsibility for implementing and administering Florida tax laws, including Chapter 212, Florida Statutes. During 1996, AHO submitted an application for an exemption under Chapter 212, Florida Statutes, as a charitable organization. According to the Articles of Corporation of AHO, its purpose is: To raise the economic, educational and social levels of the underprivileged residents of Lake City (Columbia County), Florida, and its trade area, who are substantially underemployed and have low income, by fostering and promoting community-wide interest and concern for the problems of such residents, and to that end; Racial tension, prejudice, and discrimination of economic and otherwise may be eliminated; Sickness, poverty and crime may be lessened and; Educational and economic opportunities may be expanded among the residents of Lake City (Columbia County), Florida, and its trade area. To expand the opportunities available to said residents to own, manage, and operate business enterprises in economically underprivileged or depressed areas; to assist said residents and groups in developing management skills necessary for the successful operation of business enterprises; to provide financial support for the successful operation of business enterprises by said residents and to assist said residents in obtaining such financial support from other sources. To aid, support and assist by gifts, contributions or otherwise, other corporations, community chests, funds and foundations organized and operated exclusively for charitable, religious, scientific, literary or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholders or individuals, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation. To do any and all lawful activities which may be necessary, useful or desirable for the furtherance, accomplishment, fostering or attainment of the foregoing purposes, either directly or indirectly, and either along or in conjunction or cooperation with others, whether such others be persons or organizations of any kind or nature such as corporations, firms, associations, trust, institutions, foundations, or governmental bureaus, departments or agencies. The Department conceded in its proposed recommended order that AHO meets the requirement for exemption in this matter that it be designated a Section 501(c)(3) charitable organization by the United States Internal Revenue Service. The services provided by AHO are provided without charge to its clients. Those services include recruiting families who are qualified for federal home loans who are committed and able to provide their time and labor to construct their own housing. AHO brings several such families together to share the labor and effort necessary to build housing for each family. Each family shares in the labor of constructing the home of each other family in the group. AHO assists the families prepare mortgage applications necessary to receive federally subsidized loans and provides credit counseling necessary for families to qualify for such loans. Once a family qualifies for a loan, AHO assists in the selection of house plans, the selection of construction materials, the organization of the family groups, teaches general construction techniques and assists with all aspects of completing construction of housing. AHO also assists in bookkeeping necessary to administer mortgage loans. AHO does not act as a general contractor. Nor does AHO provide construction labor or materials, or the funds necessary for construction. AHO receives administrative grants through the state's Housing Finance Agency as a Community Housing Development Organization. AHO's expenses in providing its services are entirely expenses of the organization. AHO's total expenditures are for its day-to-day operations. No funds are expended directly for clients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Revenue denying the certificate of exemption sough by Affordable Home Ownership Corporation. DONE AND ORDERED this 2nd day of June, 1997, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 this 2nd day of June, 1997. COPIES FURNISHED: Rufus L. Smith Executive Director, A.H.O.C. Affordable Home Ownership Corporation Post Office Box 7347 Lake City, Florida 32055 Kevin J. ODonnell Assistant General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
