TALLAHASSEE, FLORIDA · TALLAHASSEE, FLORIDA CASE NO. 97-0335 DOR 91~2o-FDF ... 204 Carlton...
Transcript of TALLAHASSEE, FLORIDA · TALLAHASSEE, FLORIDA CASE NO. 97-0335 DOR 91~2o-FDF ... 204 Carlton...
. " (j nSTATE OF FLORIDA, DEPARTMENT OF REVENUE
TALLAHASSEE, FLORIDA
CASE NO. 97-0335DOR 91~2o-FDF
Petitioner,
vs.
AFFORDABLE HOME OWNERSHIPCORPORATION
DEPARTMENT OF REVENUE,
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~~·~~··_---~-~~--------~~--.~~------Respondent~--~)----~--~-----_. ~ ----- ~~_~ __~ . ~_
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FINAL ORDER
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THIS CAUSE came before the Department of Revenue for thepurpose of issuing a Final Order. The Administrative Law Judgeassigned by the Division of Administrative Hearings heard thiscause and issued a Recommended Order. A copy of that Order isattached to this Final Order. No exceptions to the RecommendedOrder were filed and there are no proposed substituted orders toconsider. The Department of Revenue has jurisdiction of thiscause.
STATEMENT OF THE ISSUE
The Department adopts and incorporates in this Final Order theStatement of the Issue in ehe Recommendea~Orae~
PRELIMINARY STATEMENT
Department adopts and incorporates in this Final Order thePreliminary Statement in the Recommended Order.
FINDINGS OF FACT
The Department adopts and incorporates in this Final Order theFindings of Fact in the Recommended Order.
CONCLUSIONS OF LAW
The Department adopts and incorporates in this Final Order theConclusions of Law in the Recommended Order.
Based on the foregoing, it is,
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ORDERED that the application of the Petitioner as a charitable\~ institution is denied and that the Petitioner be denied a'-.) consumer's certificate of exemption.
DONE AND ENTERED in Tallahassee, Leon County, Florida thisZ3rrL- day of October, 1997.
CERTIFICATE OF FILING
I HEREBY CERTIFY that the foregoing Final Order has been filedi~ th~ official records of the Department of ~evenue, this1--'3 rd day of October, 1997.
o 9~d~~~~Y CLERK
JUDICIAL REVIEW
Any party to this Order has the right to seek jUdicial reviewof the Order pursuant to section 120.68, F.S., by the filing of aNotice of Appeal pursuant to Rule 9.110, Florida Rules of AppellateProcedure, with the Clerk of the Department in the Office of theGeneral Counsel, Post Office Box 6668, Tallahassee, Florida 323146668, and by filing a copy of the Notice of Appeal, accompanied bythe applicable filing fees , with the appropriate District Court ofAppeal. The Notice of Appeal must be filed within 30 days from thedate this Order is filed with the Clerk of the Department.
Attachment: Administrative Law Judge's Recommended Order
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Copies furnished to:
LaTry J.SartinAdministrative Law JudgeDivision of Administrative HearingsThe DeSoto Building1230 Apalachee ParkwayTallahassee, FL 32399-1550
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Rufus L. smith~ Executive Director, A.H.O.C.l,~) Affordable Home ownership corporation
Post Office Box 7347Lake city, FL 32055
Kevin J. ODonnellAssistant General CounselDepartment of RevenuePost Office Box 6668Tallahassee, FL 32314-6668
Linda Lettera~------~-----General--Counse±--~-~--~---~-----
Department of Revenue204 Carlton BuildingTallahassee, FL 32399-0100
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State of Florida, .Division of Administrative HearingsCj
Sharyn L. SmithDirector and Chief Judge
. Ann ColeClerk of the Division
June 2, 1997
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The DeSoto Building. 1230 Apalachee Parkway
Tallahassee, Florida32399-3060
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Linda LetteraGeneral CounselFlorida Department of Revenue204 Carlton BuildingTallahassee, FL 32399
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Re: Affordable Home Ownership Corporationvs. Department of RevenueDOAH Case No: 97-0335
Dear Ms. Lettera:
Enclosed is my Recommended Order and exhibits in the abovecaptioned case. Copies of this letter will serve to notify theparties that my Recommended Order and the record have beentransmitted this date.
As required by Section 120.57(1) (k), Florida Statutes, youare requested to furnish the Division of Administrative Hearingswith a copy of the Final Order within 15 days of its rendition.
Sincerely,
~2Administrative Law Judge.
LJS/aml
cc: Rufus L. SmithKevinJ. ODonnell, EsquireLarry Fuchs
Enclosures
(904)488-9675 • SUNCOM 278-9675 • Fax Filing (904) 921-6847
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, STATE OF FLORIDADIVISION OF ADMINISTRATIVE HEARINGS '.
Respondent.
Petitioner,
AFFORDABLE HOME OWNERSHIPCORPORATION,
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vs. ) CASE NO. 97-0335-~---~------~----~---~--~--~--~-~~~-~~~--t-------~------------- ------~----.-~~---~------~---------~--- ~~-
STATE OF FLORIDA, DEPARTMENT )OF REVENUE, )
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RECOMMENDED ORDER
Pursuant to Notice, a formal hearing was held in this case
~ before Larry J. Sartin, a duly designated Administrative Law
Judge of the Division of Administrative Hearings, on April 1,
1997, in Lake City, Florida.
APPEARANCES
For Petitioner: Rufus'L. SmithExecutive DirectorAffordable Home Ownership CorporationPost Office Box 7347Lake City, Florida 32055
For Respondent: Kevin J. ODonnellAssistant General CounselDepartment of RevenuePost Office Box 6668Tallahassee, Florida 32314-6668
STATEMENT OF THE ISSUE
'The issue in this case is whether Petitioner, Affordable
Horne Ownership Corporation, is eligible for a consumer
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~ certificate of exemption as a charitable institution purs~ant to
section 212.08(7) (0), Florida statutes.
PRELIMINARY STATEMENT'
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Petitioner, Affordable.Home Ownership Corporation, filed an
application for a consumer certificate of exemption as a
Statutes, with Respondent, the Department of Revenue. On or
about December 16, 1996, Respondent entered a Notice of Intent to
Deny informing Petitioner that the application for exemption had .......
been denied.
On or about January 9, 1997, Petitioner filed a pleading
titled IITaxpayer Opposing Denial ll requesting a formal
(~administra~ive hearing to contest Respondentls decision. The
request for.:'hearing was filed with the Division of Administrative
------Hearings on January 21, 1997. The matter was assigned to the
undersigned.
At the formal hearing, Petitioner presented the testimony of
Rufus Smith, Executive Director of Petitioner, and Selvin
McGahee, Program Director of Florida Non-Profit Housing, Inc.
Petitioner offered seven exhibits, which were accepted into
evidence. Petitioner was to file a copy of Petitioner's exhibit
5 .with Petitioner's proposed recommended order, but failed to do
so. Respondent called no witnesses. One exhibit was offered by
Respondent. The exhibit was accepted into evidence.
No transcript of the hearing was filed. Proposed orders
(-~were to be filed on or before April 21, 1997. Both parties filed
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c-J proposed orders on or before April 21, 1997. Those proposed
orders have been fully considered.
FINDINGS OF FACT
1. Petitioner, Affordable Home Ownership Corporation
(hereinafter referred to as HAHOH), is a Florida nonprofit
corporation.- -- ~- ~-~---
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2. Respondent, the Department of Revenue (hereinafter
referred to as the HDepartment H), 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.
3. During 1996, AHO submitted an application for an
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. exemption under Chapter 212, Florida Statutes, as a charitable
organization.
purpose is:
(1) To raise the economic, educational andsocial levels of the underprivileged residents ofLake City (Columbia County) , Florida, and itstrade area, who are substantially underemployedand have low income, by fostering and promotingcommunity-wide interest and concern for theproblems of such residents, and to. that end;
(a) Racial tension, prejudice, anddiscrimination of economic and otherwise may beeliminated; .
(b) Sickness, poverty and crime may be lessenedand;
(c) Educational and economic opportunities maybe expanded among the residents of Lake City(Columbia County), Florida, and its trade area.
(2) To expand the opportunities available tosaid residents to own, manage, and operate
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o busine$s enterprises in economicallyunderprivileged or depressed areas; to assistsaid residents and groups in developingmanagement skills necessary for the ~uccessful
operation of business enterprises; to providefinancial support for the successful operation ofbusiness enterprises by said residents and toassist said residents in obtaining such financialsupport from other sources.
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(3) To aid, support and assist by gifts,contributions or otherwise r other corporations,
-- --------'::.-- -communiey-cnesfS;-funas--ana f oundciFfoils organlzed--and operated exclusively for charitable r
religious, scientific, literary or educational. purposes, no part of the net earnings of whichinures to the benefit of any private shareholdersor individuals r and no sUbstantial part of the
.activities of w~ich is carrying on propaganda r orotherwise attempting to influence legislation.
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(4) To do any and all lawful activities whichmay be necessary, useful or desirable for thefurtherance, accomplishment, fostering orattainment of the foregoing purposes, eitherdirectly or indirectly, and either along or in"conjunction or cooperat~on with others, whethersu~h others be persons or organizations of anykind or nature such as corporations, firms,
-----assocrat-rorrs-,-tru-st~-in::rcIEuEions, founaafions,or governmental bureaus, departments or agencies.
5 . 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.
6. 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(-)
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~ shares in the labor of constructing the home of each other family
in the group.
7. AHa assists the families prepare mortgage applications
necessary to receive federally subsidized loans and provides
credit counseling necessary for families to qualify for such
loans.-- -~ -~-- --~
-- - -8~. -~ Orice~a~Tamily-quarrfies-for-a -loa:n~-AHO-a-ssists-in-t-he---
selection of house plans, the selection of ~onstruction
materials, the organization of the family groups, teaches general
construction techniques and assists with all aspects of
completing construction of housing. AHa also assists in
bookkeeping necessary to administer mortgage loans.
9. AHa does not act as a geheral contractor. Nor does AHa
provide construction labor or materials, or the funds necessary
for construction.
lO. AHa receives administrative grants through the state's
Housing Finance Agency as a Community Housing Development
Organization. AHa's expenses in providing its services are
entirely expenses of the organization. AHa's total expenditures
are for its day-to-day operations. No funds are expended
directly for clients.
CONCLUSIONS OF LAW
ll. The Division of Administrative Hearings has
jurisdiction of the parties to, and the subject matter of, this
. proceeding. Section l20,57, Florida Statutes (l996 Supp.).
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() 12. Section 212.084, Florida Statutes, authorizes the
Department to issue tax exemption certificates valid for five
years to qualified institutions, organizations and individuals."
13. A tax exemption certificate may be issued by the
Depart.ment to any institution, organization or individual that
const:i"tutes a religious, charitable, scientific, educational, or
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Florida Statutes.
14. In this matter, AHO is seeking a tax exemption'
certificate as a "charitable institution". A "charitable...'~
institution" is defined in Section 212.08(7) (o)2.b., Florida
Statutes, in pertinent part, as follows:
b. "Charitable institutions" means onlynonprofit corporations qualified as nonprofitpursuant to s. 501 (c) (3), United States InternalRevenue Code of 1954, as amended, and othernonprofit entities, the sole or primary functionof~wh-j.ch~j.s-t;e-~~0v-:icle-,-or-to-ra-±-se-furids-f-or---------c--------jorganizations which provide, one or more of thefollowing services if a reasonable percentage ofsuch service is provided free of charge, or at asubstantially reduced cost, to persons, animals,or organizations that are unable to pay for suchservice:
(I) Meqical aid for the relief of disease,injury, or disability;
(II) Regular provision of, physical necessitiessuch as food, clothing, or shelter;
(III) Services for the prevention of orrehabilitation of persons from alcoholism or drugabuse; the prevention of suicide; or thealleviation of mental, physical, or sensoryhealth proplems;
(j(IV) Social welfare services including
adoption placement, child care, community carefor the elderly, and other social welfareservices which clearly and substantially benefit
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a client population which is disadvantaged orsuffers a handicap;
(v) Medical research for the relief ofdisease, injury, or disability;
(VI) Legal services; or
(VII) Food, shelter, or medical care foranimals or adoption services, crueltyinvestigations, or education programs concerninganimals;
and the term includes groups providing volunteerstaff to Qrganizations designated as charitableinstitutions under this sub-subparagraph;nonprofit organizations the sole or primarypurpose ,of which is to coordinate, network, orlink other institutions designated as charitableinstitutions under this sub-subparagraph withthosepersons,animals, or organizations in needof their services; and nonprofit national, state,district, or other governing, coordination; Qradministrative organizations the sole or primarypurpose of which is to represent or regulate thecustomary activities 9f other institutionsdesignated as charitable institutions under subsubparagraph.
Statutes, are to be strictly construed against a taxpayer seeking
such an exemption. See Capital City country Club v. Tucker, 613
So.2d 448, (Fla. 1993); Szabo Food Services, Inc. v. Dickenson,
286 So.2d 529 (Fla. 1973); and Asphalt Pavers, Inc. v. Department
of Revenue, 584 So.2d 55 (Fla. 1st DCA 1991) .
16. AHO had the burden of proving in this case that it
comes within the definition of a 11 charitable institution" as
defined in Section 212.08(7) (0)2.. b., Florida Statutes. See
Department of Banking and Finance v. Osborne Stern and' Company,
670 So.2d 932, 934 (Fla.l996).
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C) 17. In order to qualify for an exemption under Section
212,08(7) (0)2.b., Florida Statutes, AHa was required to prove at
hearing:
a. It is either a Section 501(c) (3) charitable organization
or other nonprofit organization; and
b. It's sole or primary function is to provide, or raise
funds for organizations which provide at least one of the seven
services specifically designated in Section 212.08(7) (0)2.b.,
Florida Statutes, AND a reasonable percentage of the service is
provided free of charge, or at a substantially reduced cost to
the recipients of the service who are unable to pay for the
service ..
o 18. The Dep~rtment conceded that AHa meets the first
requirement for exemption. Jl...HO did not prove, however, that it
_____ meets the second requireme_u_t .,--------------'--------------------1
19. Rule 12A~1.001(3) (g)3.e., Florida Administrative Code,
provides the following definition of IIsole or primary function ll:
IISole or primary function ll means that acharitable organization, excluding hospitals,must establish and support its function asproviding or raising funds for services asoutlined in subparagraphs 1. and 2. above, byexpending in excess of 50.0 percent of thecharitable organization's operationalexpenditures towards 'qualified charitableservices', as defined in subparagraph 2.a. - g.,within the charitable institution's most recentfiscal year.
20. Petitioner failed to offer proof that, during the most
recent fiscal year, in excess of 50.0 percent of its expenditures
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Section 212.08(7) (o)2.b., Florida Statutes, or toward raising
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services.
21. The evidence in this case proved that 100% of AHO's
expenditures have been made solely for its admini'strative costs.
It did not expend any of its funds directly to provide shelter or
any of the other seven designated services. Nor did it pay any
----of-T6;;--Tunos-Fo-anyofner--6rganizal:ion-provi-ding-'snel-t-er-or-any- -' ----------.
of the other seven designated services.
22. The services provided by AHO to its. clients, while
meritorious, do not constitute th~ specific serv.ices spe~ified in
Section 212.08(7) (b)2.b., Florida Statutes. AHO has not,
therefore, proved that it's "sole or primary function" is the
provision of charitable service.
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,
Florida.
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TIN~~~ative Law Judge
Divislon of Administrative HearingsThe DeSoto Building1230 Apalachee ParkwayTallahassee r Florida 32399-3060(904) 488-9675 SUNCOM 278-9675Fax Filing (904) 921-6847
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~OPIES FURNISHED TO:
Filed with the Clerk 'of theDivision of Administrative Hearingsthis 2nd day of June, 1997.
Rufus L. SmithExecutive Director, A.H.O.C.Affordable Home Ownership CorporationPost Office Box 7347 . . __
-------La:K'e- C:rf.y,--FT6r:raa---32055
Kevin J. ODonnellAssistant General CounselDepartment of RevenuePost Office Box 6668Tallahassee, Florida 32314-6668
Linda LetteraGeneral CounselDepartment of Revenue204 Carlton BuildingTallahassee, FL 32399
_0 Ilarry FuchsExecutive DirectorDepartment of Revenue
------rO-4-CarTt-on BullaJ.'~n~g~--------------
Tallahassee, FL 32399-0100
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within 15days from the date of this recommended order. Any exceptions tothis recommended order should be filed with the agency that willissue the final order in this case.
Case No. 97-0335
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