Could a nonprofit religious institution with an established place of worship make ordinary-course sales and leases without collecting Florida sales tax?

Subject

Sales by Religious Institution

Plain-English summary

The organization could make ordinary-course sales or leases of tangible personal property without collecting Florida sales tax. Its Consumer's Certificate of Exemption carried kind code 55, which reflected the Department's determination that it was a religious institution with an established physical place of worship.

The organization was a section 501(c)(3) nonprofit conducting regular worship, missionary, musical, and related religious activities. The ruling applied the religious-institution exemption to its own sales and leases in the ordinary course of business.

What this means for you

The answer depended on the Department's classification of this organization and its established worship site, not merely on general federal nonprofit status.

Common questions

Q: Did the organization qualify as a religious institution? Yes.

Q: What documented that status? Its kind-code-55 exemption certificate.

Q: Were ordinary-course sales and leases exempt? Yes.

Citations and references

• Fla. Stat. § 212.08(7)(m) — religious-institution sales and lease exemption
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01A-014

Original ruling text

SUMMARY

QUESTION: Is Taxpayer, a religious institution with an
established physical place of worship, and therefore, not
required to collect and remit tax on its sales or rentals
of tangible personal property?

ANSWER - Based on Facts Below: Taxpayer was issued a
Consumer's Certificate of Exemption with a kind code of 55.
This designation means that, based on documentation
supplied by the Taxpayer, the Department considers Taxpayer
to be a religious institution with an established physical
place of worship. Therefore, Taxpayer can make sales or
leases of tangible personal property, when such sales are
in their ordinary course of business, exempt from tax.

Mar 05, 2001

Re: Technical Assistance Advisement 01A-014
Sales and Use Tax - Sales by Religious Institution
Sections: 212.08(7)(m), F.S.
Rule: None
Petitioner: XXX (herein "Taxpayer")
FEI: XX

Dear :

This letter is a response to your petition dated January 31,
2001, for the Department's issuance of a Technical Assistance
Advisement ("TAA") concerning the above referenced party and
matter. Your petition has been carefully examined and the
Department finds it to be in compliance with the requisite
criteria set forth in Chapter 12-11, F.A.C. This response to
your request constitutes a TAA and is issued to you under the
authority of s. 213.22, F.S.

FACTS

Your letter provides the following information:

[Taxpayer] is a Florida corporation not-for-profit, exempt
from federal income taxes under Section 501(c)(3) of the
Internal Revenue Code, and exempt from Florida sales and
use taxes pursuant to its Consumer['s] Certificate of
Exemption.... The activities of [Taxpayer] include the
conduct of regular worship services, the conduct of
missionary activities, the conduct of musical programs, and
the conduct of other related activities in keeping with its
religious purpose. Based on the information submitted with
[Taxpayer's] application for its Consumer's Certificate of
Exemption, the Department of Revenue... determined that
[Taxpayer] is a religious institution as defined in the
Florida sales tax statutes. [Taxpayer] submitted
information with its application demonstrating that it
qualified as a "religious institution" by meeting the
criteria set forth in Section 212.08(7)(o)2.a., F.S.
(1999), regarding having a "physical place for worship at
which nonprofit religious services and activities are
regularly conducted and carried on."...

Taxpayer's Articles of Incorporation provide in the "third"
paragraph:

Said Corporation is organized exclusively for charitable,
educational and religious purposes, including, for such
purposes, the making of distributions to organizations that
qualify as exempt organizations under Section 501(c)(3) of
the Internal Revenue Code.... The MAIN PURPOSE is to bring
the major works of Western classical music to the country
of XXX, proclaiming the message of the Gospel to and
through XXX musicians to the world. The purpose
encompasses the presentation of concerts, radio programs,
television programs, audio recordings, tours to other
countries, as well as the establishment of a church to
evangelize and disciple new [Christians].

Taxpayer was issued a Consumer's Certificate of Exemption on
November 29, 2000, as a 501(c)(3) organization. On January 11,
2001, the Consumer's Certificate of Exemption was reissued with

the final two numbers preceding the "C" (the "kind code") as 55.
The 55 designation means that the Department considers Taxpayer
to be a religious institution with a physical place of worship.

REQUESTED ADVISEMENT

Taxpayer requests advice as to whether it is considered to be a
religious institution with a physical place of worship and,
therefore, would not be required to collect and remit tax on its
sales or rentals of tangible personal property.

APPLICABLE LAW

Section 212.08(7)(m), Florida Statutes, provides:

(m) Religious institutions.--

1. There are exempt from the tax imposed by this chapter
   transactions involving sales or leases directly to
   religious institutions when used in carrying on their
   customary nonprofit religious activities or sales or leases
   of tangible personal property by religious institutions
   having an established physical place for worship at which
   nonprofit religious services and activities are regularly
   conducted and carried on.

2. As used in this paragraph, the term "religious
   institutions" means churches, synagogues, and established
   physical places for worship at which nonprofit religious
   services and activities are regularly conducted and carried
   on. The term "religious institutions" includes nonprofit
   corporations the sole purpose of which is to provide free
   transportation services to church members, their families,
   and other church attendees. The term "religious
   institutions" also includes nonprofit state, nonprofit
   district, or other nonprofit governing or administrative
   offices the function of which is to assist or regulate the
   customary activities of religious institutions. The term
   "religious institutions" also includes any nonprofit
   corporation that is qualified as nonprofit under s.
   501(c)(3) of the Internal Revenue Code of 1986, as amended,

and that owns and operates a Florida television station, at
least 90 percent of the programming of which station
consists of programs of a religious nature and the
financial support for which, exclusive of receipts for
broadcasting from other nonprofit organizations, is
predominantly from contributions from the general public.
The term "religious institutions" also includes any
nonprofit corporation that is qualified as nonprofit under
s. 501(c)(3) of the Internal Revenue Code of 1986, as
amended, the primary activity of which is making and
distributing audio recordings of religious scriptures and
teachings to blind or visually impaired persons at no
charge. The term "religious institutions" also includes any
nonprofit corporation that is qualified as nonprofit under
s. 501(c)(3) of the Internal Revenue Code of 1986, as
amended, the sole or primary function of which is to
provide, upon invitation, nonprofit religious services,
evangelistic services, religious education, administrative
assistance, or missionary assistance for a church,
synagogue, or established physical place of worship at
which nonprofit religious services and activities are
regularly conducted. (Emphasis Supplied)

DETERMINATION

On January 11, 2001, Taxpayer was issued a Consumer's
Certificate of Exemption with a kind code of 55. This
designation means that, based on documentation supplied by the
Taxpayer, the Department considers Taxpayer to be a religious
institution with an established physical place of worship.
Therefore, Taxpayer can make sales or leases of tangible
personal property, when such sales are in their ordinary course
of business, exempt from tax.

This response constitutes a Technical Assistance Advisement
under Section 213.22, F.S., which is binding on the department
only under the facts and circumstances described in the request
for this advice, as specified in Section 213.22, F.S. Our
response is predicated upon those facts and the specific
situation summarized above. You are advised that subsequent
statutory or administrative rule changes or judicial

interpretations of the statutes or rules upon which this advice
is based may subject similar future transactions to a different
treatment from that which is expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses
and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department
within 15 days of the date of this letter.

Sincerely,

Sara D. Faulkenberry
Tax Law Specialist
Technical Assistance and Dispute Resolution
850/414-9838

Control #43914