What did the original TAA 00B4-001 say about documentary stamp tax on Florida real estate transferred through two mergers?

Plain-English summary

This original advisement was later clarified by revised TAA 00B4-001R. It addressed a two-step transaction in which a Florida corporation owning Florida real estate would merge into a newly formed foreign corporation, followed by that corporation's merger into a foreign limited liability company.

The original ruling said documentary stamp tax did not apply when the governing out-of-state law vested the Florida property in each surviving entity by operation of law and required no deed. It assumed fee-simple record ownership by the merging entities and allowed articles of merger to be recorded.

The document prominently directs readers to revised TAA 00B4-001R. The revised advisement clarified that the Florida-to-Delaware corporate merger and the Delaware-corporation-to-Delaware-LLC merger were not taxable when title vested by operation of law, while a transfer requiring a deed was taxable.

What this means for you

Use revised TAA 00B4-001R for the Department's clarified explanation. In either version, the central factual question was whether applicable merger law automatically vested title or required a separate deed.

Common questions

Q: Is this the Department's final version? No. The original PDF directs readers to the revised advisement.

Q: What fact drove the original no-tax conclusion? Title passed by operation of governing law without a deed.

Q: Could articles of merger be recorded? Yes, under the described facts; the ruling distinguished them from a deed conveying title.

Citations and references

• Fla. Stat. § 201.02(1) — documentary stamp tax on real-property conveyances
• Fla. Admin. Code r. 12B-4.013(31) — merger transfers
• Fla. Stat. §§ 607.1101, 607.1108, 607.1109, and 607.11101 — merger provisions cited in the original advisement
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00B4-001

Original ruling text

SUMMART

QUESTION: Will transfers of Florida real property from a
Florida corporation to a foreign corporation, then from the
foreign corporation to a limited liability company by
operation of law as a result of corporate mergers be
subject to tax?

ANSWER - BASED ON FACTS BELOW: Mergers are not taxable
unless governed by the laws of this State. This applies
only if the real property becomes the ownership of the
surviving entity by operation of law and the laws of the
other jurisdiction that govern the surviving entity does
not require a deed to transfer the property.

See Revised TAA 00(B)4-001R

Feb 04, 2000

Re: Technical Assistance Advisement No. 00(B)4-001
Documentary Stamp Tax - Corporate Mergers
Section 201.02(1), F.S., & Rule 12B-4.013(31), F.A.C.
XXX (hereinafter Taxpayer)

Dear :

Your letter requesting a Technical Assistance Advisement
has been referred to this office for response. The specific
scenario for which advice has been requested is summarized
below.

Facts as Presented by Petitioner

The taxpayer, which owns fee simple title to real property
located in Florida, will merge with and into a newly formed
foreign corporation. The merger will be effected in accordance
with the provisions of Florida law, as well as the law of the
state of the foreign corporation. The foreign corporation will

survive the merger, and title to the real property will be
vested in the foreign corporation by operation of law. No deed
will be recorded to evidence the transfer of title to the
property. However, Articles of Merger evidencing the
transaction may be recorded in the Florida counties where the
property is situated. Shortly after the merger of the Florida
and foreign corporations, the foreign corporation will be merged
with and into a newly formed foreign limited liability company
under the laws of the foreign state. The limited liability
company will survive the merger, and title to the property will
be vested in the foreign limited liability corporation by
operation of law. No deed will be recorded to evidence the
transfer of title to the property. Again, Articles of Merger
evidencing the transaction may be recorded in the Florida
counties where the Property is situated.

Request for Advisement

Based upon the facts set forth above, you request the
following advisements on behalf of the Taxpayer:

(i) the transfer of the property from the Florida
corporation to the foreign corporation by operation of law
as a result of the merger of the corporation into the
foreign corporation will not be subject to the excise tax
on documents imposed by Chapter 201, F.S.

(ii) the transfer of the property from the foreign
corporation to the foreign limited liability corporation by
operation of law as a result of the merger of the foreign
corporation and the foreign limited liability company will
not be subject to the excise tax on documents imposed by
Chapter 201, F.S.

Provisions of Law

The tax levied by s. 201.02(1), F.S., is an excise tax on
deeds, instruments, or writings that transfer any interest in
real property. The amount of tax is 70 cents for each $100 of
consideration. Consideration includes, but is not limited to,
money paid or to be paid, the discharge of an obligation, and

the amount of any mortgage, purchase money mortgage, or other
encumbrance. If the consideration is other than money, the
consideration is presumed to be equal to the fair market value
of the real property being transferred.

Sections 607.1101, 607.1108, 607.1109, and 607.11101, F.S.,
which permit the merger of Florida corporations and limited
liability companies, do not specifically address which
jurisdiction_s laws will govern the vesting of title in the
surviving entity when an out-of-state entity is involved in the
merger. Sections 607.1101 and 607.1108, F.S., state that
pursuant to a plan of merger one or more corporations may merge
with or into one or more corporations or other business entities
(i.e., limited liability company). According to s.
607.11101(2), F.S., title to all real property owned by each
corporation or business entity party to the merger is vested in
the surviving entity without reversion or impairment. Title to
the property shall be conveyed by recording of a deed with
payment of applicable taxes thereon.

Position of the Department

Based on the foregoing authorities and facts presented, it
is the position of the Department that the mergers are not
taxable for purposes of the Florida documentary stamp tax unless
the merger is governed by the laws of this State. This only
applies if the laws of the other jurisdiction that govern the
surviving entities do not require deeds to transfer title to
real property owned by the merged entities. That is, this only
applies if the real property of the merging entities becomes the
real property of the surviving entity, without execution and
delivery of a deed.

The conclusion is based on the real property at issue being
owned in fee simple, as shown by record title, by the named
entities that are parties to the merger, and on the
understanding that the documents of the merger state that the
corporation and limited liability company are to be governed by
the laws of the out-of-state jurisdiction.

This response constitutes a Technical Assistance Advisement

under s. 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 s. 213.22, F.S. Our response is
predicated on 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 than
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,

Celestine Grantham
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Office of General Counsel

CG/mh