Did converting a New York general partnership into a Florida or New York LLC trigger Florida documentary stamp tax?

Plain-English summary

Florida found no documentary stamp tax when the New York partnership converted by statute into either a Florida LLC or a New York LLC. Under both alternatives, the governing conversion law treated the converted LLC as the same continuing entity and vested the partnership's Florida real property in it by operation of law.

Because no deed was required to transfer the property, there was no taxable conveyance instrument. The Department also said that if a deed were recorded, no documentary stamp tax would be due because the property transfer occurred by operation of law.

The result was expressly conditioned on compliance with the applicable Florida or New York conversion statute.

What this means for you

A qualifying statutory conversion can differ from a deed or contribution of property to a newly separate entity. Confirm that the governing law preserves entity continuity and transfers property automatically.

Common questions

Q: Did it matter whether the converted LLC was formed under Florida or New York law?
A: No, because both statutes provided the relevant continuity and operation-of-law transfer on the stated facts.

Q: Was a deed required?
A: No.

Q: Would recording a deed automatically create tax?
A: The ruling said no because the statutory conversion transferred the property by operation of law.

Citations and references

• Fla. Stat. § 201.02(1) — documentary stamp tax on conveyance instruments
• Fla. Stat. § 608.439(6) — historical Florida conversion provision
• New York Limited Liability Company Law § 1007 — foreign conversion provision discussed
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 03B4-003

Original ruling text

SUMMARY

QUESTION 1: Is the documentary stamp tax imposed on deeds
due upon conversion of New York General Partnership to a
Florida limited liability company?

ANSWER 1 - Based on Facts Below: The conversion of a New
York partnership to a Florida limited liability company,
are not subject to documentary stamp tax. The real
property of the converting entity becomes the real property
of domestic limited liability company by operation of the
laws of this state.

QUESTION 2: Is the documentary stamp imposed on deeds due
on Florida real property currently owned by New York
General Partnership in the event that New York limited
liability company is converted to a New York limited
liability company?

ANSWER 2 - Based on Facts Below: There is no requirement of
filing of any deed by the parties and no documentary stamp
tax is due. The laws of the jurisdiction which govern the
surviving entity provides that a partnership or limited
liability partnership that has been converted is for all
purposes the same entity that existed before the
conversion.

Apr 08, 2003

Re: Technical Assistance Advisement No. 03B4-003
Florida Documentary Stamp Tax
Conversion of General Partnership to a Limited Liability
Company
Sections 201.02 and 608.439, F.S.
XXX (New York General Partnership)

Dear :

This is in response to your request for a Technical Assistance
Advisement in which you ask an advisement as to whether
documentary stamp tax will be due on deeds upon conversion of a
general partnership to a limited liability company, as provided
by s. 608.429, F.S.

Facts and Circumstances Presented by Petitioner

New York General Partnership proposes to convert its entity
status from a general partnership to either a Florida limited
liability company or a New York limited liability company. New
York General Partnership is currently the fee owner of certain
real property located in Florida. Section 1007 of the New York
Limited Liability Law has an analogous provision with Florida
relating to entities that are converted into New York limited
liability companies.

Requested Ruling by the Petitioner

The General Partnership requests a binding opinion as follows:

1. Will documentary stamp taxes be payable in connection
   with the Florida real property currently owned by [New
   York General Partnership] in the event that [New York
   General Partnership] is converted to a Florida limited
   liability company?

2. Will documentary stamp taxes be payable in connection
   with the Florida real property currently owned by [New
   York General Partnership] in the event that [New York
   General Partnership] is converted to a New York
   limited liability company?

Law and Discussion

Section 201.02(1), F.S., imposes tax on deeds, instruments, or
writings that convey, grant or transfer real property or any
interest in real property.

Section 608.439(6), F.S., provides that when any conversion
becomes effective under that section, for all purposes of the

laws of this state, all of the rights, privileges, and powers of
the other entity that has converted, and all property, real,
personal, and mixed, and all debts due to such other entity, as
well as all other things and all debts due to such other entity,
as well as all other things and causes of action belonging to
such other entity, shall be vested in the domestic limited
liability company and shall thereafter be the property of the
domestic limited liability company.

Section 1007 of the New York Limited Liability Company Law
provides that a partnership or limited partnership that has been
converted pursuant to this chapter is for all purposes the same
entity that existed before the conversion. When the conversion
takes effect, all property, real and personal, tangible and
intangible, of the converting partnership or limited partnership
remains vested in the converted limited liability company.
There is no requirement of filing of any deed by the parties.

Department_s Position

Florida law requires the payment of documentary stamp tax on
instruments conveying real property. However, effective June
15, 2000, s. 608.439, F.S., eliminates the requirement to record
a deed when a conversion of a general or limited partnership to
a limited liability company takes place. If a deed is recorded,
no documentary stamp taxes would be due, since the property is
conveyed by operation of law.

Provided that the partnership_s conversion to a Florida limited
liability company complies with Florida law or the New York
limited liability company complies with New York law, no
documentary stamp taxes will be due in connection with the
transfer of the Florida real property pursuant to a statutory
conversion when the real property is transferred by operation of
law.

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 interpretation of the
statutes or rules upon which this advise 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,

Baldan E. Sulker
Senior Tax Specialist
Technical Assistance & Dispute Resolution
Office of General Counsel

BES/mh