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
Findings Of Fact On August 15, 2007, Respondent, Department of Financial Services (DFS) entered a Notice of Intent (the agency's proposed final agency action) to the effect that it proposed to enter a final order approving the claim for unclaimed property filed by “Christine Margrave and Anthony Richard Margrave as Trustees of the Florence Alice Cassidy Trust for the benefit of Peter Cassidy” and to withhold no amount on behalf of Petitioner. The certificate of service of that Intent is dated August 16, 2007, as evidenced by its attachment to the Department's Motion to Dismiss. The Notice of Intent was received by Petitioner on August 20, 2007, as evidenced by a signed "return receipt requested" form, a copy of which is attached to the Department's Motion to Dismiss. On September 11, 2007, Petitioner filed its Petition with DFS. The date of receipt by the Agency is evidenced by the Agency’s date stamp on the Petition, a copy of which is attached to the Department's Motion to Dismiss. On or about September 24, 2007, the cause was referred to the Division of Administrative Hearings and assigned to the undersigned. Enclosed in the referral packet was Respondent Agency's timely Motion to Dismiss with all attached exhibits. On October 3, 2007, an Order was entered, pointing out (to Petitioner) that Respondent Agency's Motion to Dismiss had been incorporated in the Agency referral packet received at the Division on or about September 24, 2007, and that, in an abundance of caution, Petitioner was being granted 12 days from October 3, 2007 (that is, until October 15, 2007), to file any response in opposition to the Agency’s Motion to Dismiss. Petitioner filed no timely response. On October 25, 2007, an Order was entered taking the Agency’s Motion to Dismiss under advisement. On September 28, 2007, the “Response of Jennifer Christine Margrave and Anthony Richard Margrave” was filed. This item has been treated as the Trust’s motion to intervene. By another October 3, 2007 Order, Petitioner and Respondent were granted the time provided in Florida Administrative Code Rule 28-106.204, in which to respond in support or opposition to the Trust’s motion to intervene. This would have been 12 days from the date of the October 3, 2007, Order. Respondent Agency filed a timely response in support of the Trust’s intervention. Petitioner has filed nothing to date. On October 11, 2007, the Trust filed a Motion to Dismiss, incorporating by reference Respondent's Motion to Dismiss and relating that the Trust had declined to sign a power of attorney to Petitioner which would have required it to pay more than 40 percent of the value of the unclaimed asset here at issue. Petitioner filed no timely response. Because it appeared that the Trust had served its two motions upon Petitioner by e-mail and to a street address which was not Petitioner’s street address of record before the Division of Administrative Hearings, the undersigned, in an abundance of caution, utilized the following procedure to ensure that Petitioner would have every opportunity to respond to those motions or object to any of the exhibits attached to any motion. By attachments to an Order entered October 25, 2007, the Trust’s Motion to Intervene and Motion to Dismiss were re-served upon Petitioner by U.S. Mail at the Petitioner’s correct street address of record before the Division. The Order further invited a timely response per rule. A timely response would have to have been filed with the Division on or before November 6, 2007. Petitioner filed no timely response in opposition, and has filed nothing to date. On November 6, 2007, an Order was entered, granting the Trust’s motion to intervene and taking the Trust’s Motion to Dismiss under advisement. This Recommended Order of Dismissal is entered without oral argument, as permitted by Florida Administrative Code Rule 28-106.204. The pleadings of record show that on or about April 12, 2006, "P. (Peter) Cassidy" had executed a written power of attorney to Petitioner Corporation restricted to authorizing Petitioner to effect distribution of assets legally belonging to the estate of his father, Jerome G. Cassidy, to which Peter was legally entitled as sole legal beneficiary. The agreement specified a fee of $6,845.57 to Petitioner and a net of $10,000.00 to Peter. However, Peter, in proper person, was not the legal owner of the asset. The Florence Alice Cassidy Trust for the benefit of Peter Cassidy, is the beneficiary. Oral agreements are recognized by the Florida Statutes as follows: Section 717.1381 Any oral or written agreement or power of attorney for compensation or gain or in the expectation of compensation or gain, that includes an unclaimed property account valued at more than $250 which was made on or before 45 days after the holder or examination report was processed and added to the unclaimed property database, subsequent to a determination that the report was accurate and that the reported property was the same as the remitted property, is void as contrary to public policy. Any oral or written purchase agreement that includes an unclaimed property account valued at more than $250, owned by another and made on or before 45 days after the holder or examination report was processed and added to the unclaimed property database, subsequent to a determination that the report was accurate and that the reported property was the same as the remitted property, is void as contrary to public policy. (2) A person may not enter into a power of attorney or an agreement, or make solicitation to enter into a power of attorney or an agreement, that is void under this section. However, there is nothing in Chapter 717, Florida Statutes, that makes the Department or the Division the determinor of such oral agreements. The Petition herein represents that an oral agreement existed between Petitioner and Intervenors (the Trust), whereby the Trust as "Claimant" agreed to pay Petitioner a "fee" or "costs" (the Petition uses both terms) for the Petitioner's services for locating the account (asset) at issue; for obtaining the necessary documents to successfully claim the account; and by Petitioner doing any and all other acts necessary in the procurement of any additional items as might be required for Petitioner to file a complete claim on Intervenors' behalf. Petitioner bases the instant claim on a February 9, 2007, e-mail transmission from Intervenors to Petitioner and the circumstances surrounding it, the most notable circumstance being that prior to the February 9, 2007, e-mail, Petitioner had advised Intervenors that all necessary documents had been secured and would be forwarded to them. The Trust's February 9, 2007, e-mail reads: I can confirm however that I have now obtained a certified death certificate for Mr. Cassidy which has a similar seal to that which you describe. All the documents I shall be sending you, including the death certificates for Mr. & Mrs. Cassidy, will be copies of the originals and which will have been certified and sealed by a Notary Public. You have confirmed that the copy [sic] driving licenses of Mr. & Mrs. Margrave which I will provide as proof of identity do not need to be certified. Perhaps you would kindly confirm that all the above will be in order and on receipt of the document by mail you will be able to complete the claim. Perhaps you could also let me know how long completion of the claim and issue of the funds will take. On a final note I, like you, have been christened with the male version of my name but am in fact Mrs. Gabriel Gray! Petitioner also relies on its own February 12, 2007, e-mail transmission to Intervenors, which sets forth as follows: As a reminder, the Limited Powers of Attorney must also accompany the documents . . . Upon receipt of the documents and Limited Powers of Attorney the claim will be submitted for approval. Intervenors/Trustees and their English solicitor never executed a written power of attorney on behalf of the Trust. On or about March 19, 2007, Intervenors filed their own claim, as Trustees of the Florence Alice Cassidy Trust for the Benefit of Peter Cassidy, for the unclaimed property of Jerome G. Cassidy. Intervenors have presented documentation to satisfy the Agency that Jerome Cassidy pre-deceased his spouse, Florence Alice Cassidy, who is also deceased; that both Jerome and Florence died in England; that Ms. Margrave is the personal representative of the estate of Florence Alice Cassidy for the benefit of Peter Cassidy, who is the son of the decedents. Ms. Margrave and Anthony Richard Margrave are trustees of the discretionary trust. The Petition represents that it would have been impossible for Intervenors to have obtained the necessary origination of the asset (bank account) in question using the Respondent Agency's database alone. Upon the foregoing and other information, Respondent Agency has determined that Petitioner has no standing and that disbursement of the asset should be made exclusively to the Trust/Intervenors.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order dismissing the Petition herein. DONE AND ENTERED this 6th day of December, 2007, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 6th day of December, 2007. COPIES FURNISHED: Paul C. Stadler, Jr., Esquire Department of Financial Services 200 E. Gaines Street Tallahassee, Florida 32399-0333 Gerald E. Daugherty Worldwide Research Services Corporation 3221 Hansen Court Tallahassee, Florida 32301 Anthony Richard Margrave Jennifer Christine Margrave Courtyard Entrance, the Old Post Office 130 Epsom Road, Merrow, Guildford, Surrey GU1 2PX Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
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 Based upon all of the evidence, the following findings of fact are determined: Petitioner, Tel-World Ministries (petitioner), is a private, non-profit association formed on January 24, 1996. According to its articles of association, petitioner was formed "to operate for the advancement of religion, religious education and charitable purposes, by the distribution of its funds for such purposes, and in particularly to promote understanding and truth and save soul's in Christ Jesus." Its president is Frederick J. Hoffman, a resident of Holly Hill, Florida. Respondent, Department of Revenue (DOR), is charged with the responsibility of administering and implementing the Florida Revenue Act of 1949, as amended. It has the specific task of collecting sales taxes and enforcing the State Tax Code and rules. By law, certain transactions are exempt from the state sales and use tax. Among these are sales or lease transactions by qualified "charitable" or "religious" institutions. In order for an organization to be entitled to an exemption, it must make application with DOR for a consumer's certificate of exemption and demonstrate that it is a qualified religious or charitble organization within the meaning of the law. Once the application is approved, the certificate entitles the holder to make tax-exempt purchases that are otherwise taxable under Chapter 212, Florida Statutes. Claiming that it was entitled to a certificate of exemption as either a religious or charitable organization, petitioner filed an application with DOR on an undisclosed date in early 1996. The application itself has not been offered into evidence. After requesting additional information, on April 26, 1996, DOR preliminarily disapproved the application on the grounds petitioner did not qualify under the statutory definition of a religious institution, and it did not have as its primary purpose one of seven defined charitable purposes set forth in the law. Thereafter, petitioner filed a request for hearing to contest this decision. In its request for hearing, petitioner contended, among other things, that DOR had failed to consider the legislative intent of the law, failed to consider an amendment to the application, and failed to properly interpret its own rules and the general law. Petitioner agrees it is not a church but rather is a ministry. It has no building or established physical location from which it provides charitable or religious services. As described by its president at hearing, its president, and perhaps two other officers, go to other churches, primarily the Seventh Day Adventist Church, and they "assist" the pastors of those churches by giving "input" at mass, prayer, and Bible study classes. The association also disseminates religious materials, including brochures and the like. Under Section 212.08(7)(o)2.b., Florida Statutes, a charitable institution is generally defined as an entity which holds a current exemption from the federal income tax under Section 501(c)(3) of the Internal Revenue Code. The entity must also have as its "sole or primary function" the provision of, or raising funds for organizations which provide, one of seven defined charitable services, if a reasonable percentage of such services is provided free of charge, or at a substantially reduced cost, to persons who are unable to pay for such services. The parties agree that petitioner has a current exemption from the federal income tax under section 501(c)(3) and, in this respect, it meets the statutory requirements. Petitioner contends that its sole or primary function is to provide services of the type that fall within the charitable purpose defined in subparagraph (IV) of the statute. That purpose is defined as being "(s)ocial 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." According to petitioner, it does God's work at other churches by assisting those churches' pastors in saving souls, and thus these services fall within the broad definition of "social welfare services." However, within the narrow context of the statutory exemption, and when the term "social welfare services" is given its plain and ordinary meaning, religious or spiritual activities do not qualify as "charitable" services. In general terms, to qualify as a religious institution, an entity must be (a) a church, synagogue, or established physical place for worship at which nonprofit religious services and activities are regularly conducted and carried on, (b) a nonprofit corporation the sole purpose of which is to provide free transportation services to church members and attendees, (c) a "state, district or other governing or administrative office whose function is to assist or regulate the customary activities of religious organizations or members within the state or district organization," or (d) a corporation qualified as nonprofit under section 501(c)(3) that owns or operates a Florida television station. Petitioner has no "established physical place for worship," its sole purpose is not to provide free transportation services to church members and attendees, and it does not operate a television station. Thus, it cannot qualify under the first, second and fourth parts of the definition. Petitioner's president contends, however, that he represents the "state office" of Tel-World Ministries, and therefore the association meets that part of the test. It is noted that the only "office" within the entity is that found in Holly Hill and it is not a part of a larger organization. Under DOR policy, in order to pass muster as a state, district or administrative office, petitioner must be a part of a larger organization and, within the hierarchy of that larger organization, assist or regulate the activities of those beneath it in the organizational hierarchy. This interpretation of the law is found in prior agency orders and is deemed to be reasonable. Because petitioner does not comport with this policy, it cannot qualify as a "state administrative office" within the meaning of the law. In summary, while petitioner submitted evidence to show that it is engaged in laudable religious efforts, the entity itself does not qualify as a religious or charitable institution for tax purposes, and thus it is not entitled to a consumer certificate of exemption.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent enter a Final Order denying petitioner's application for a consumer certificate of exemption as a religious or charitable institution. DONE AND ENTERED this 7th day of August, 1996, in Tallahassee, Florida. DONALD R. ALEXANDER, 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 7th day of August, 1996. APPENDIX TO RECOMMENDED ORDER Respondent: Respondent's proposed findings, while substantially altered, have been adopted in substance. COPIES FURNISHED: 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 Frederick J. Hoffman 1728 Derbyshire Road Holly Hill, Florida 32117 William B. Nickell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
The Issue This issue is whether proposed amendments to Rules 12A-1.094(1) and 12A-1.094(4), Florida Administrative Code, constitute a valid exercise of delegated legislative authority.
Findings Of Fact Petitioners Florida Home Builders Association, Inc. (FHBA), and Florida A.G.C. Council (FAGC) are trade associations. A substantial number of their members contract with governmental entities for construction services and related sales of tangible personal property. FHBA and FAGC were organized, in part, to represent their members on matters relating to the construction industry, including proceedings involving agency rules. Petitioner Wackenhut Corrections Corporation (Wackenhut) frequently contracts with governmental entities. The proposed rule amendments will result in greater tax liability for Wackenhut in its performance of governmental contracts. Intervenor Florida School Board Association, Inc. (FSBA) represents all 67 local school boards in the State of Florida. FSBA's purpose is to represent its members before governmental agencies, in part to ensure cost containment in the construction, maintenance, and improvement of school facilities. Petitioners and Intervenor will be substantially affected if Respondent adopts the proposed rule amendments. They all have standing in this case. Section 212.05, Florida Statutes, imposes a tax on "retail sales" or "sales at retail." The statute also imposes a companion "use tax" when a retail sale does not occur in this state but the items sold are used here. Section 212.02(14), Florida Statutes, defines "retail sale" or "sale at retail" as a "sale to a consumer or to any person for any purpose other than resale in the form of tangible personal property." Section 212.02(20), Florida Statutes, defines "use" as the "exercise of any right or power over tangible personal property incident to ownership thereof, or interest therein, except it does not include the sale at retail of that property in the regular course of business." Therefore, when tangible personal property is purchased and resold while still tangible personal property, the individual or company that resells the property is a dealer and has an obligation to collect, but not to pay, sales tax. See Sections 212.06(2) and 212.07(1)(a), Florida Statutes. The obligation to pay the tax rests on the final purchaser of the items while they are still tangible personal property. Section 212.08(6), Florida Statutes, creates a sales tax exemption for direct sales to governmental entities. The statute also creates an exception to that exemption for sales to contractors who purchase or manufacture items for the purpose of installing them in a governmental project. At one time, governmental contractors benefited from the same sales tax exemption that governmental entities enjoyed, even when the contractor was the ultimate consumer. Section 212.08(7), Florida Statutes (1957), stated as follows in relevant part: (7) EXEMPTIONS; POLITICAL SUBDIVISIONS, INTERSTATE TRANSPORTATION, COMMUNICATIONS, ETC.--There shall also be exempt from the tax imposed by this chapter sales made to the United States government, the state or any county, municipality or political subdivision of this state, including sales of tangible personal property made to contractors employed by any such government or political subdivision thereof where such tangible personal property goes into and becomes a part of public works owned by such government or political subdivision thereof. (Emphasis added) Chapter 59-402, Section 2, Laws of Florida, amended this provision by deleting the word "including" and substituting "provided, this exemption shall not include." Section 212.08(6), Florida Statutes (1991), provided as follows in relevant part: (6) EXEMPTIONS; POLITICAL SUBDIVISIONS.-- There are also exempt from the tax imposed by this chapter sales made to the United States Government, a state, or any county, municipality, or political subdivision of a state when payment is made directly to the dealer by the governmental entity. This exemption shall not inure to any transaction otherwise taxable under this chapter when payment is made by a government employee by any means, including, but not limited to, cash, check, or credit card when that employee is subsequently reimbursed by the governmental entity. This exemption does not include sales of tangible personal property made to contractors employed either directly or as agents of any such government or political subdivision thereof when such tangible personal property goes into or becomes a part of public works owned by such government or political subdivision thereof, except public works in progress or for which bonds or revenue certificates have been validated on or before August 1, 1959. Rule 12A-1.094, Florida Administrative Code, which implements Section 212.08(6), Florida Statutes, was last amended on August 10, 1992. The existing rule currently provides, as follows, in relevant part: 12A-1.094 Public Works Contracts. This rule shall govern the taxability of transactions in which contractors manufacture or purchase supplies and materials for use in public works, as that term is referred to in Section 212.08(6), This rule shall not apply to non- public works contracts as those contracts are governed under the provisions of Rule 12A-1.051, F.A.C. . . . In applying this rule, the following definitions are used. "Contractor" is one who is engaged in the repair, alteration, improvement or construction of real property. Contractors include, but are not limited to, persons engaged in building, electrical, plumbing, heating, painting, decorating, ventilating, paperhanging, sheet metal, roofing, bridge, road, waterworks, landscape, pier or billboard work. This definition includes subcontractors. "Public works" are defined as construction projects for public use or enjoyment, financed and owned by the government, in which private persons undertake the obligation to do a specific piece of work. The term "public works" is not restricted to the repair, alteration, improvement, or construction of real property and fixed works where the sale of tangible personal property is made to or by contractors involved in public works contracts. Such contracts shall include, but not be limited to, building, electrical, plumbing, heating, painting, decorating, ventilating, paperhanging, sheet metal, roofing, bridge, road, waterworks, landscape, pier or billboard contracts. "Real property" within the meaning of this rule includes all fixtures and improvements to real property. The status of a project as an improvement or affixture to real property is determined by the objective and presumed intent of the parties, based on the nature and use of the project and the degree of affixation to realty. Mobile homes and other mobile buildings are deemed fixtures if they (1) bear RP license tags, or (2) have the mobile features (such as wheels and/or axles) removed, and are placed on blocks or footings and permanently secured with anchors, tie-down straps or similar devices. * * * (4) The exemption in subsection (3)(a) is a general exemption for sales made to the government. The exception in subsection (2)(a) is a specific exception for sales to contractors. A determination of whether a particular transaction is properly characterized as an exempt sale to a government entity or a taxable sale to a contractor shall be based on the substance of the transaction, rather than the form in which the transaction is cast. The Executive Director or the Executive Director's designee in the responsible program will determine whether the substance of a particular transaction is governed by subsection (2)(a) or is a sale to a governmental body as provided by subsection (3) of this rule based on all of the facts and circumstances surrounding the transaction as a whole. The Executive Director or the Executive Director's designee in the responsible program will give special consideration to factors which govern the status of the tangible personal property prior to its affixation to real property. Such factors include provisions which govern bidding, indemnification, inspection, acceptance, delivery, payment, storage, and assumption of the risk of damage or loss for the tangible personal property prior to its affixation to real property. Assumption of the risk of damage or loss is a paramount consideration. A party may be deemed to have assumed the risk of loss if the party either: bears the economic burden of posting a bond or obtaining insurance covering damage or loss; or enjoys the economic benefit of the proceeds of such bond or insurance. Other factors that may be considered by the Executive Director or the Executive Director's designee in the responsible program include whether: the contractor is authorized to make purchases in its own name; the contractor is jointly or severally liable to the vendor for payment: purchases are not subject to prior approval by the government; vendors are not informed that the government is the only party with an independent interest in the purchase; and whether the contractors are formally denominated as purchasing agents for the government. Sales made pursuant to so called "cost-plus", "fixed-fee", "lump sum", and "guaranteed price" contracts are taxable sales to the contractor unless it can be demonstrated to the satisfaction of the Executive Director or the Executive Director's designee in the responsible program that such sales are, in substance, tax exempt sales to the government. Section 212.08(6), Florida Statutes, was last amended by Chapter 98-144, Laws of Florida. The statute currently states, as follows, in pertinent part: (6) EXEMPTIONS; POLITICAL SUBDIVISIONS.-- There are also exempt from the tax imposed by this chapter sales made to the United States Government, a state, or any county, municipality, or political subdivision of a state when payment is made directly to the dealer by the governmental entity. This exemption shall not inure to any transaction otherwise taxable under this chapter when payment is made by a government employee by any means, including, but not limited to, cash, check, or credit card when that employee is subsequently reimbursed by the governmental entity. This exemption does not include sales of tangible personal property made to contractors employed either directly or as agents of any such government or political subdivision thereof when such tangible personal property goes into or becomes a part of public works owned by such government or political subdivision. A determination whether a particular transaction is properly characterized as an exempt sale to a government entity or a taxable sale to a contractor shall be based on the substance of the transaction rather than the form in which the transaction is cast. The department shall adopt rules that give special consideration to factors that govern the status of the tangible personal property before its affixation to real property. In developing these rules, assumption of the risk of damage or loss is of paramount consideration in the determination. Chapter 98-144, Laws of Florida, was the result of Respondent's "map-tracking" exercise to ensure that its rules were supported by appropriate legislation. Proposed amendments to Rules 12A-1.094(1) and 12A-1.094(4), Florida Administrative Code, are at issue here. Those rules, as revised by the proposed amendments, read as follows: This rule shall govern the taxability of transactions in which contractors manufacture or purchase supplies and material for use in public works contracts, as that term is referred to in Section 212.08(6), F.S. This rule shall not apply to non-public works contracts for the repair, alteration, improvement, or construction of real property, as those contracts are governed under the provisions of Rule 12A-1,051, F.A.C. In applying this rule, the following definitions are used. 1. "Contractor" is one that supplies and installs tangible personal property that is incorporated into or becomes a part of a public facility pursuant to a public works contract with a governmental entity exercising its authority in regard to the public property or facility. Contractors include, but are not limited to, persons engaged in building, electrical, plumbing, heating, painting, decorating, ventilating, paperhanging, sheet metal, roofing, bridge, road, waterworks, landscape, pier, or billboard work. This definition includes subcontractors. "Contractor" does not include a person that furnishes tangible personal property that is not affixed or appended in such a manner that it is incorporated into or becomes a part of the public property or public facility to which a public works contract relates. A person that provides and installs tangible personal property that is freestanding and can be relocated with no tools, equipment, or need for adaptation for use elsewhere is not a contractor within the scope of this rule. "Contractor" does not include a person that provides tangible personal property that will be incorporated into or becomes part of a public facility if such property will be installed by another party. Examples. A vendor sells a desk, sofas, chairs, tables, lamps, and art prints for the reception area in a new public building. The sales agreement requires the vendor to place the furniture according to a floor plan, set up the lamps, and hang the art prints. The vendor is not a contractor within the scope of this rule, because the vendor is not installing the property being sold in such a way that it is attached or affixed to the facility. A security system vendor furnishes and install low voltage wiring behind walls, motion detectors, smoke alarms, other sensors, control pads, alarm sirens, and other components of a security system for a new county courthouse. The components are direct wired, fit into recesses cut into the walls or other structural elements of the building, and are held in place by screws. The vendor is a contractor within the scope of this rule. The security system is installed and affixed in such a manner that it ha been incorporated into the courthouse. A vendor enters an agreement to provide and install the shelving system for a new public library. The shelves are built to bear the weight of books. The shelf configuration in each unit maximizes the number of books the shelves can hold. The number and size of the units ordered is based on the design for the library space. The units will run floor to ceiling and will be anchored in place by bolts or screws. The vendor is a contractor within the scope of this rule. The shelving system will be affixed in such a manner that it becomes a part of the public library. e. A manufacturer agrees to provide the prestressed concrete forms for a public parking garage. A construction company is awarded the bid to install those forms and build the garage. The manufacturer is not a contractor within the scope of this rule, because the manufacturer will not install any tangible personal property that becomes part of the garage. The construction company is a contractor within the scope of this rule. "Governmental entity" includes any agency or branch of the United States government, a state, or any county, municipality, or political subdivision of a state. The term includes authorities created by statute to operate public facilities using public funds, such as public port authorities or public-use airport authorities. "Public works" are defined as construction projects for public use or enjoyment, financed and owned by the government, in which private persons undertake the obligation to do a specific piece of work that involves installing tangible personal property in such a manner that it becomes a part of a public facility. For purposes of this rule, a public facility includes any land, improvement to land, building, structure, or other fixed site and related infrastructure thereon owned or operated by a governmental entity where governmental or public activities are conducted. The term "public works" is not restricted to the repair, alteration, improvement, or construction of real property and fixed works, although such projects are included within the term. "Real property" within the meaning of this rule includes all fixtures and improvements to real property. The status of a project as an improvement or fixture to real property will be determined by reference to the definitions contained in Rule 12A-1.051(2), F.A.C. * * * (4)(a) The exemption in s. 212.08(6), F.S., is a general exemption for sales made directly to the government. A determination whether a particular transaction is properly characterized as an exempt sale to a governmental entity or a taxable sale to or use by a contractor shall be based on the substance of the transaction, rather than the form in which the transaction is cast. The Executive Director or the Executive Director's designee in the responsible program will determine whether the substance of a particular transaction is a taxable sale to or use by a contractor or an exempt direct sale to a governmental entity based on all of the facts and circumstances surrounding the transaction as a whole. The following criteria that govern the status of the tangible personal property prior to its affixation to real property will be considered in determining whether a governmental entity rather than a contractor is the purchaser of materials: Direct Purchase Order. The governmental entity must issue its purchase order directly to the vendor supplying the materials the contractor will use and provide the vendor with a copy of the governmental entity's Florida Consumer's Certification of Exemption. Direct Invoice. The vendor's invoice must be issued to the governmental entity, rather than to the contractor. Passage of Title. The governmental entity must take title to the tangible personal property from the vendor at the time of purchase or delivery by the vendor. 5. Assumption of the Risk of Loss. Assumption of the risk of damage or loss by the governmental entity at the time of purchase is a paramount consideration. A governmental entity will be deemed to have assumed the risk of loss if the governmental entity bears the economic burden of obtaining insurance covering damage or loss or directly enjoys the economic benefit of the proceeds of such insurance. Sales are taxable sales to the contractor unless it can be demonstrated to the satisfaction of the Executive Director or the Executive Director's designee in the responsible division that such sales are, in substance, tax-exempt direct sales to the government. Respondent's staff assisted various industry groups in drafting proposed legislation for the 2001 and 2002 legislative sessions that would expand the sales tax exemption for public works contracts. The Legislature did not enact any of these proposals. The proposed rule amendments reflect Respondent's current practice regarding tax exemptions for public works contracts. The proposed amendments detail all factors, criteria, and standards that Respondent considers in determining whether transactions qualify for the exemption set forth in Section 212.08(6), Florida Statutes. The existing version of Rule 12A-1.094, Florida Administrative Code, as revised in 1992, does not reflect these factors. In drafting the proposed revisions to Rule 12A-1.094, Florida Administrative Code, Respondent's staff considered statutory language, questions asked by taxpayers, and cases involving protests of audit assessments. Respondent's staff also considered areas that it believed failed to provide clear guidance as to how taxpayers could structure transactions to avoid the tax. Finally, Respondent's staff considered the decisions in Housing by Vogue, Inc. v. Department of Revenue, 403 So. 2d 478 (Fla. 1st DCA 1981), and Housing by Vogue, Inc. v. Department of Revenue, 422 So. 2d 3 (Fla. 1982). As a general rule, a for-profit corporation instead of the contractor is liable to pay sales tax when the contractor agrees to purchase items and to resell the items to the corporation such that the corporation takes possession and ownership thereof. This would be true regardless of whether the contractor or some other individual eventually installs the items on the for-profit corporation's property or in its facility. In either instance, the contractor, as a reseller of tangible personal property, is a dealer who has the obligation to collect the sales tax from the for-profit corporation. The for-profit corporation would be the ultimate consumer of the items. If a contractor resells items to a non-governmental customer, who enjoys tax-exempt status, while the items are still tangible personal property, no sales tax is due. In such a case, it makes no difference whether the contractor or some other individual later installs the items. The taxability of sales to or by contractors who repair, alter, improve and construct real property pursuant to non-public works contracts is governed by Rule 12A-1.051, Florida Administrative Code, which states as follows in relevant part: Scope of the rule. This rule governs the taxability of the purchase, sale, or use of tangible personal property by contractors and subcontractors who purchase, acquire, or manufacture materials and supplies for use in the performance of real property contracts other than public works contracts performed for governmental entities, which are governed by the provisions of Rule 12A-1.094, F.A.C. . . . Definitions. For purposes of this rule, the following terms have the following meanings: * * * (c)1. "Fixture" means an item that is an accessory to a building, other structure, or to land, that retains its separate identity upon installation, but that is permanently attached to the realty. Fixtures include such items as wired lighting, kitchen or bathroom sinks, furnaces, central air conditioning units, elevators or escalators, or built-in cabinets, counters, or lockers. 2. In order for an item to be considered a fixture, it is not necessary that the owner of the item also own the real property to which the item is attached. . . . * * * (g) "Real property" means land, improvements to land, and fixtures. It is synonymous with the terms "realty" and "real estate." Pursuant to the statute and the proposed rule amendments, contractors who purchase tangible personal property that goes into or becomes a part of a public works are not entitled to an exemption from paying sales tax. Such a contractor would be the ultimate consumer of the tangible personal property and not a dealer. The statute and the rule at issue here require Respondent to look at the substance instead of the form of each transaction to determine when sales tax is due. To say that no tax is due anytime a contractor agrees to purchase and resell items to a governmental customer, such that the governmental customer takes possession and ownership thereof before the same contractor installs the items, would be contrary to the statute. To find otherwise would place form over substance, allowing the contractor and the governmental entity to avoid the statutorily imposed tax by casting the transaction as a resale. The proposed rule amendments do not expand the sales and/or use tax imposed by Chapter 212, Florida Statutes. Instead, they implement the statutory provision requiring governmental contractors to pay sales tax when they supply and install items in a governmental project pursuant to a public works contract. Depending on the circumstances, "public works" include a construction project on a job site where the governmental entity owns the real property. It also includes a construction project on a job site where the governmental entity owns a public facility located on real property owned by a private individual. The term "public works" includes a public facility which is owned and operated by a governmental entity for the purpose of conducting governmental activities regardless of who owns the real property on which it is located. According to the statute, Respondent's rules must give special consideration to the status of tangible personal property "before its affixation to real property." This provision does not mean that a transaction is not taxable unless the tangible personal property becomes a "fixture" or "appurtenance" to real property. Instead, Respondent's proposed rule amendments properly implement the broader legislative intent to tax any sale to a contractor who supplies and installs tangible personal property in public works. Respondent looks first to see whether the tangible personal property will be a fixture or improvement to real property. Next, Respondent must determine whether the tangible personal property will be permanently attached and function as a part of a public works project that does not fit the definition of real property. For example, a port authority may operate an office out of a permanently docked ship. The statute directs Respondent to consider the assumption of risk of damage or loss to be most important but not the only factor in determining whether the sale of tangible personal property is taxable. In addition to the assumption of risk of loss, the proposed rule amendments require a nontaxable sale to show the following: (a) a direct purchase order to the vendor who will supply materials to the contractor; (b) a direct invoice from the vendor rather than the contractor; (c) direct payment to the vendor; and (d) passage of title at time of purchase or delivery. The five factors are inclusive of the elements that Respondent will consider when determining whether of a sale is, in substance, a direct nontaxable sale to a governmental entity.
The Issue Whether respondent violated Section 112.3142(2)(b), Florida Statutes, with regard to her 1996 financial disclosure obligations, and, if so, what penalty is appropriate.
Findings Of Fact Respondent, Eileen McGuire, is now and at all times material to this proceeding has been a member of the Town Council of the Town of Welaka, Florida. As a public official, Respondent is subject to the applicable requirements of Chapter 112, Florida Statutes. Respondent was first appointed to the Welaka Town Council (Town Council) on October 24, 1995. Subsequently, she was elected to the Town Council in March 1996, and was re-elected in 1998. As an elected public official, Respondent was required to file an annual CE Form 1, Statement of Financial Interests (Statement of Financial Interests), for the year 1996 with the Supervisor of Elections Office of Putnam County, Florida (Putnam County Supervisor of Elections or Supervisor of Elections). The 1996 Statement of Financial Interests was required to be filed by July 1, 1997. On June 23, 1997, Respondent submitted her 1996 Statement of Financial Interests with the Putnam County Supervisor of Elections. However, Respondent failed to sign and date the 1996 Statement of Financial Interests she submitted to the Supervisor of Elections. Respondent's failure to sign and date her 1996 Statement of Financial Interests was inadvertent and unintentional. All the official records of the Putnam County Supervisor of Elections reflect that Respondent's 1996 Statement of Financial Interests was submitted to that office on June 23, 1997. Moreover, on that same day, Respondent's 1996 Statement of Financial Interests was accepted, received, stamped, and deemed filed by the Supervisor of Elections. The Putnam County Supervisor of Elections, deemed Respondent's 1996 Statement of Financial Interests filed on June 23, 1997, notwithstanding the fact that the form was not signed or dated. Respondent was not given any written notice of any alleged defect in or failure to properly file her 1996 Statement of Financial Interests either by the Putnam County Supervisor of Elections or any other government officer or agency. In October 1997, Respondent received a telephone call from an employee of the Putnam County Supervisor of Elections who advised that she needed to sign some documents that she had previously filed. Soon after Respondent received the aforementioned telephone call from the Supervisor of Elections Office, she went to that office and signed the document which was presented to her for her signature. The form that Respondent mistakenly signed was the CE Form 10, Annual Disclosure of Gifts From Governmental Entities and Direct Support Organizations and Honorarium Event Related Expenses (CE Form 10), which was attached to the Form 1 when it was presented for signature. Notwithstanding the voluntary mutual effort of the parties to correct the oversight relative to Respondent's failure to sign her 1996 Statement of Financial Interests, the original form was thereafter filed away unnoticed until the advent of this proceeding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Florida Commission on Ethics determine that the public interest would not be served by proceeding further against Respondent, and dismiss the complaint. DONE AND ENTERED this 20th day of January, 2000, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 20th day of January, 2000. COPIES FURNISHED: Virlindia Doss, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Allen C.D. Scott, II, Esquire Scott & Scott 101 Orange Street St. Augustine, Florida 32084 Sheri L. Gerety, Complaint Coordinator Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, General Counsel Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709
The Issue Does Petitioner qualify for a consumer's certificate of exemption as a "church" as defined in Rule 12A-1.001(3)(c), Florida Administrative Code, or as a "religious institution" as defined in Section 212.08(7)(o) 2.a., Florida Statutes?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Friends Housing and Care, Inc. (Petitioner), is a non-profit corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. Petitioner has filed under the fictitious name statute and is doing business under the name Woodmere at Jacarande. Petitioner's Amended Articles of Incorporation dated October 25, 1996, state Petitioner's purposes as follows: To provide elderly families, elderly persons, and handicapped persons housing and related facilities and services specially designed to meet the physical, social, psychological, economic and spiritual needs of the aged and contribute to their health, financial security, happiness and usefulness in longer living. To plan, construct, operate, maintain, and improve housing and related facilities and services for elderly families and elderly persons. To acquire by gift or purchase, hold, sell, convey, assign, mortgage, or lease any property, real or personal, necessary or incident to the provisions of housing and related facilities and services for elderly families and elderly persons. To borrow money and issue evidence of indebtedness in furtherance of any or all of the objects of its business; and to secure loans by mortgage, pledge, deed or trust, or other lien. To engage in any kind of activity, and enter into, perform and carry out contracts of any kind, necessary or in connection with, or incidental to the accomplishment of any one or more of the nonprofit purposes of the corporation. To conduct educational or scientific research on a non-profit basis and to cooperate with foundations, educational institutions, and research centers in promoting same, with the aim of increasing knowledge and enhancing life in our society. To foster and encourage spiritual life and bring the human spirit into intimate relation with the Divine Spirit, to provide definite, organized opportunity for the development of spiritual values and for the renewal of our strength in accordance with generally accepted faith and practice of the Religious Society of Friends. Note 1 of Petitioner's audited financial statements containing the independent auditor's report dated January 8, 1997, states that Petitioner ". . .was created by Friends (Quakers) to plan and develop a Not-for-Profit Condominium Retirement Community in Florida to meet the needs of Friends and others who wish to retire or live in a Quaker-sponsored retirement community in Florida. " Note 3 to the same financial statements indicates that Petitioner's operations have been devoted to raising capital, obtaining financing, purchasing land and beginning construction on the planned retirement community. As reflected in the unaudited financial statement dated April 30, 1997, of the total reflected year-to-date expenses of $820,681: $299,548 went to architectural fees; $71,985 was spent for engineering fees; $84,265 was spent for pre-construction management fees; and $40,331 went to advertising. Only $200 was directed to worship expenses. Neither the audited financial statements nor any of the notes thereto indicate that Petitioner is engaged in any religious activities or worship services. Petitioner's retirement community will comprise 32.7 acres, with a 3.7 acre easement. There will be about 700 condominiums constructed on this acreage. Currently, it is anticipated that the first condominiums will be available for occupancy sometime in 1999. Thus, currently there are no residents residing at the Petitioner's retirement community. Petitioner will be constructing an 80,000 square foot commons building which will contain an "auditorium chapel" consisting of approximately 5,500 square feet. This building has not been constructed. The "auditorium chapel" will be used for "religious purposes and multiple-purposes." It is anticipated that both silent and program services of the Friends (Quaker) faith will be held in the chapel. Other religious faiths would also be included. There will also be located within the commons building a 6,000 square foot dining facility, 4,000 square foot library, a gift shop, beauty and barber shops, post office, banking facility, game rooms, and lounge area. Petitioner sells its condominiums to members of the general public of retirement age, regardless of their religious affiliation or even if they have no religious affiliation. Purchasers do not have to be members of the Friends (Quaker) faith. In fact, the retirement community will be a "non- denominational community." The price of the condominiums ranges from about $82,000 for a one-bedroom (676 square foot) unit, to well over $200,000 for a large (2100 square foot) unit. In addition to the sales price, Petitioner will charge its residents a monthly condominium fee to cover maintenance. An activity or club fee will also be charged by Petitioner to cover residents' social activities and transportation costs. If a resident needs medical attention, Petitioner will provide the care and bill the resident's insurance company for the cost of the care. Several witnesses testified that the meetings held at Petitioner's location were held under the name "Woodmere Friends Fellowship," while other witnesses testified that the meetings held at Petitioner's location were held under the name "Woodmere Fellowship." The newspaper advertisements or other published advertisements advertising meetings at Petitioner's location did not refer to "Woodmere Friends Fellowship" or "Woodmere Fellowship." An advertisement appearing in "Quaker Life" in June 1997, indicated that "All Friends Fellowship" was located at Woodmere at Jacaranda. A newsletter from Petitioner dated January 1997, stated that "Friends Inter-Faith Fellowship" was begun at Woodmere Information Center and that several prospective residents from the Venice/Englewood area had "voiced interest in having a meeting in this area. Presently, these meetings are being held every Sunday evening at 6:30 p.m." Additionally, this newsletter stated that these meetings were consistent with Petitioner's federally-recognized religious affiliation. However, Petitioner is never identified as a church or religious institution in this newsletter. By letter dated February 17, 1997, William R. Martin, Petitioner's Chairman, advised the Department that "[o]ur Worship group is being identified as the Woodmere All Friends Fellowship." In an advertisement dated February 1, 1997, Woodmere at Jacaranda, a Quaker-sponsored, resident-owned retirement community, invites interested people to attend a fellowship hour at 6:00 p.m. the first and third Sunday of each month. This advertisement does not refer to Petitioner as a church or religious institution. The bulletins, advertisements, newsletters, and other evidence submitted by the Petitioner do not refer to Petitioner as a church or religious institution. The hours of operation posted on the doors to Petitioner's premises indicate that Petitioner is open Monday through Friday from 9:00 a.m. to 5:30 p.m., and Saturday from 9:00 a.m. to 1:00 p.m. There were no hours listed for Sunday. Additionally, there was nothing to indicate that worship service or religious activities were being conducted by Petitioner on its premises. Although there are meetings being held at Petitioner's location where religious services or activities are being conducted on a somewhat regular basis, there is insufficient evidence to show that Petitioner is responsible for, and conducting, those religious services or activities. Petitioner's sole purpose is not to provide free transportation services to church members, their families, and other church attendees. Petitioner is not a 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. Petitioner does not own or operate a Florida television station whose programs are of a religious nature. Petitioner does not provide regular religious services to Florida state prisoners. Friends Housing and Care, Inc., d/b/a Woodmere at Jacaranda is a Quaker-sponsored, resident-owned, retirement community whose primary function is the development and marketing of a retirement community to members of the general public, regardless of religious affiliation. Petitioner intends to use its sales tax exemption primarily to purchase building materials, including those building materials for the condominiums which it produces for sale to the general public, regardless of their religious affiliation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order denying Petitioner's application for sales tax exemption. DONE AND ENTERED this 25th day of February, 1998, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1998. COPIES FURNISHED: Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lattera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Nick Roknich, Esquire Dunlap, Moran, Roknich, and Gibson, P.A. 1819 Main Street, Suite 700 Sarasota, Florida 34236 Ruth Ann Smith, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
The Issue Whether the Respondent, Christina M. Restauri, committed the violations alleged and, if so, what penalty should be imposed.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of regulating licensed community association managers pursuant to Florida law. At all times material to the allegations of this case, the Respondent was licensed as a community association manager, license number CAM 0019553. In May 1998, the Respondent became the community association manager for the Association. As such, the Respondent had duties and responsibilities in connection with the day-to-day management of the Association's business. In exchange for the performance of her manager duties, the Association paid the Respondent a salary, provided her with a condominium unit for her residence, paid her utilities, and covered her local telephone service. The Respondent's managerial duties included all office management for the Association, including the collection of fees owed to the Association, the payment of monies owed to vendors by the Association, and the accounting associated with payroll for salaries owed to employees of the Association. The Respondent and the Association entered into a written management agreement that outlined the terms of her employment. The agreement (Petitioner's Exhibit 1) did not require the Association to pay for the Respondent's family health insurance. Additionally, the agreement did not provide for paid sick leave in excess of four days per year. In connection with her responsibilities for payroll, the Respondent controlled the amount of checks made payable to herself for salary owed during the course of her employment. This authority also allowed her to control the amount of monies withheld from her salary to cover her family medical insurance and for the monies payable for federal withholding taxes and social security. On at least two occasions, the Respondent altered her withholding such that no monies were withheld for federal taxes. The Respondent failed or refused to produce a W-4 form that would have supported the change in withholding. Moreover, the Respondent did not produce a W-2 form that would have supported, after-the-fact, that the withholding forms had been modified to support the altered withholding amount. The Respondent failed or refused to produce documentation to establish that she repaid the Association for family medical benefits she received. Initially, the amount to cover the family health benefit was reportedly withheld from the Respondent's paycheck. The adequacy of the withheld amount came into question. Under the terms of her employment, the Respondent was to remit the monthly family health premium to the Association. She did not do so. In fact, copies of checks that were purportedly offered in support of her claim that she had made the payments were never deposited into the Association's account. When the Respondent was challenged as to the amounts owed for health premiums and the matter was to be further investigated, she tendered her resignation. She never produced any of the financial records requested to document any of the matters contested in this proceeding. In addition to the foregoing payroll discrepancies, the Respondent caused herself to be overpaid $125.00 for sick leave. On or about October 12, 2000, the Respondent took $700.00 from the Association's petty cash and loaned it to Sandy Schwenn. Ms. Schwenn was employed by the Association as a secretary and had agreed to repay the funds. The loan was never repaid. The Respondent was not authorized to loan monies from the Association's petty cash fund and admitted the error during a board of directors' meeting on November 15, 2000. Whether the Respondent made good on her promise to repay the loan herself is unknown. Clearly, at hearing the Respondent did not make such representation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a Final Order against the Respondent that imposes an administrative fine in the amount of $2500.00, and revokes her license as a community association manager. DONE AND ENTERED this 13th day of November 2003, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. PARRISH 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 13th day of November 2003. COPIES FURNISHED: Julie Malone, Executive Director Regulatory Council of Community Association of Managers Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christina Marie Restauri 4640 Northwest 30th Street Coconut Creek, Florida 33063 Jennifer Westermann Qualified Representative Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2022 Charles F. Tunnicliff, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202
