Were county impact-fee agreements taxable mortgages for Florida documentary stamp tax?

Subject

Instruments Deemed Mortgages

Plain-English summary

The county's impact-fee agreement was not a taxable mortgage. It created a lien on each lot when sold, but the lien was not security for borrowed money evidenced by a promissory note.

The Department compared it to automobile, tax, mechanic's, and other liens created by statute or ordinance that were not taxed. The specific agreement therefore was not subject to documentary stamp tax.

What this means for you

A recorded lien was not automatically a mortgage for documentary stamp tax. The instrument's payment obligation, source, and relationship to borrowed money mattered.

Common questions

Q: Did the impact-fee agreement create a lien? Yes, on each lot when sold.

Q: Did that make it a taxable mortgage? No.

Q: What distinction did the Department draw? The lien did not secure borrowed money evidenced by a promissory note.

Citations and references

• Fla. Stat. § 201.08(1) — documentary stamp tax on obligations and mortgages
• Fla. Admin. Code r. 12B-4.052(7) — instruments deemed mortgages
• Fla. Admin. Code r. 12B-4.054(5) — written obligations to pay money
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00B4-009

Original ruling text

SUMMARY

QUESTION: Are Impact fee agreements deemed mortgages?

ANSWER - BASED ON FACTS BELOW: Impact fee agreements are
not the type of liens that are subject to tax for
documentary stamp tax purposes.

Aug 10, 2000

Re: Technical Assistance Advisement No. 00B4-009
Documentary Stamp Tax - Instruments Deemed Mortgages
Section 201.08(1), F.S., and Rule 12B-4.052(7), F.A.C.
XXX (hereinafter County)

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 County, pursuant to charter, is responsible for
recordation of public documents. The County has not been
collecting documentary stamp taxes on impact fee agreements. A
poll of other counties indicates that they are also not
collecting documentary stamp tax on impact fee agreements. The
County Attorney's Office had previously rendered an opinion on
the issue and concluded that, pursuant to Rule 12B-4.054(5),
F.A.C., a written promise to pay money which is not fixed and
absolute at the time of execution is not subject to tax. A
number of factors kept the impact fee agreements from being
fixed and absolute at the time of execution.

Request for Advisement

A Technical Assistance Advisement is being requested on
whether the impact fee agreements are deemed mortgages.

Provisions of Law

Section 201.08(1), F.S., provides in part:

On promissory notes, nonnegotiable notes, written
obligations to pay money, or assignments of salaries,
wages, or other compensation made, executed, delivered,
sold, transferred, or assigned in the state, and for each
renewal of the same, the tax shall be 35 cents on each $100
or fraction thereof.... On mortgages, trust deeds,
security agreements, or other evidences of indebtedness
filed or recorded in this state, and for each renewal of
the same, the tax shall be 35 cents per $100 or fraction
thereof of the indebtedness or obligation evidenced
thereby....

Position of the Department

The document does not use the specific language "promise to
pay money"; however, there will be a certain amount designated
for each lot sold. This document creates a lien on each lot
when it is sold.

There are a number of liens created by statute or ordinance
that are not taxed, such as automobile liens, tax liens,
mechanic's liens, etc. This lien is similar to one of these
types of liens. It is not like a typical mortgage that creates
a lien to secure borrowed money that is evidenced by a
promissory note. Therefore, it is the Department's position
that the specific impact fee agreement is not subject to
documentary stamp tax.

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