Technical Assistance Advisement

Page 1

SUMMARY

QUESTION: May the church-owned thrift shop cease collecting sales tax on its sales of tangible personal property?

ANSWER: Sales of tangible personal property, such as clothing and household goods, are exempt from tax when they are sold by churches. As long as the thrift shop is operated by the church as part of the same legal entity, and the thrift shop is not organized as a separate legal entity, sales of tangible personal property by the thrift shop (church) are exempt from tax.

April 27, 2007

Re:Technical Assistance Advisement 07A-013
Sales and Use Tax – Sales by Churches

Section: 212.08, Florida Statutes
Petitioner: XXX

FEI: XX

Dear:

This letter is a response to your petition dated March 4, 2007, 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, Florida Administrative Code. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, Florida Statutes.

FACTS

Your petition sets forth the following information:

[XXX] has been in [Florida city] since 1925. Since the late 1930’s the XXX has been sponsored by the XXX. The XXX is operating under the XXX Federal I.D. number . . . . The XXX [] is a XXX institution and exempt from sales tax. The XXX [] oversees and receives the funds generated by the thrift shop which sells used clothing and household good[s] donated by parishioners and the public. The store is managed and staffed by volunteers. . . .

The Church has rented the store location since the early 1950’s, but there is no written rental agreement.

According to other information provided, the XXX has Articles of Incorporation. The church has a physical location and conducts four worship services a week plus numerous programs for all ages, including youth programs, the altarguild and the thrift shop. Currently, the Church/store collects tax on its sales of tangible personal property.

REQUESTED ADVISEMENT

Advice is requested whether the thrift shop may cease collecting sales tax on its sales of tangible personal property.

DETERMINATION

Section 212.08(7)(m), Florida Statutes, provides in pertinent part as follows:

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. . . . (Emphasis Supplied)

Sales of tangible personal property, such as clothing and household goods, are exempt from tax when they are sold by churches. As long as the thrift shop is operated by the church as part of the same legal entity, and the thrift shop is not organized as a separate legal entity, sales of tangible personal property by the thrift shop (church) are exempt from tax.

As part of the legal entity of the church, it is not strictly necessary for the thrift shop to have an additional Consumer’s Certificate of Exemption. However, if the thrift shop has difficulty making purchases exempt from tax, the church may wish to apply for an additional Consumer’s Certificate of Exemption to be issued in the name of the thrift shop and the church together, using the thrift shop’s physical address.

This response constitutes a Technical Assistance Advisement under Section 213.22, Florida Statutes, 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, Florida Statutes. 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, Florida Statutes, and are subject to disclosure to the public under the conditions of s. 213.22, Florida Statutes. 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

Senior Tax Specialist

Technical Assistance and Dispute Resolution

Record ID# 29665