Were four Loanliner credit documents taxable as written obligations or as recorded liens under Florida law?

Plain-English summary

Florida reviewed four Loanliner forms: a Credit and Security Agreement PLUS, a Credit Insurance Application and Schedule, an Open-End Disbursement Receipt Plus, and a Security Agreement.

None was taxable as an independent written obligation to pay money. On its face, no reviewed form contained both an unconditional obligation to pay or repay a sum certain and the borrower's signature. None expressly incorporated another reviewed document, so the forms could not be combined into one taxable obligation.

The lien rule was different. A reviewed security document that established a lien would be taxable on the full secured amount if filed or recorded in Florida. Unreviewed addenda, checks, or other documents also could change the result if their express incorporation created a qualifying written obligation.

What this means for you

Florida determines this tax from the face of the document and documents expressly incorporated into it. Mere reference or description does not combine separate loan forms, while recording a lien can independently trigger tax.

Common questions

Why were the four forms not taxable as written obligations? None contained the required unconditional promise for a sum certain together with the borrower's signature.

Could multiple forms be read together? Not here. None used language expressly incorporating another reviewed form.

When would the security documents be taxable? If they establish a lien and are filed or recorded in Florida, tax applies to the full amount secured.

Citations and references

• Fla. Stat. § 201.08(1)(a) (notes and written obligations to pay money)
• Fla. Stat. § 201.08(1)(b) (filed or recorded mortgages and liens)
• Fla. Stat. § 201.08(6) (face-of-document and express-incorporation rule)
• Fla. Admin. Code r. 12B-4.052(6) (express incorporation of documents)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06B4-007

Original ruling text

SUMMARY
QUESTION: Is Florida's documentary stamp tax, as imposed under section 201.08, F.S., due on specific documents
provided for review, more specifically, a Loanliner Credit and Security Agreement PLUS, a Loanliner Credit Insurance
Application & Schedule, a Loanliner Open-End Disbursement Receipt Plus, and a Loanliner Security Agreement.
ANSWER - Based on Facts Below: Documentary stamp tax as imposed under paragraph 201.08(1)(a), F.S., is due
on any instrument executed, signed, or delivered in Florida that contains an unconditional written obligation to pay
money. The taxability of a document under this paragraph is determined solely from the face of the document and any
separate document expressly incorporated into the document. Documentary stamp tax as imposed under paragraph
201.08(1)(b), F.S., is due on any mortgage or other lien filed or recorded in Florida.
It is determined that the Loanliner Credit and Security Agreement PLUS, the Loanliner Credit Insurance Application &
Schedule, the Loanliner Open-End Disbursement Receipt Plus, and the Loanliner Security Agreement provided for
review are not subject to documentary stamp tax imposed under paragraph 201.08(1)(a), F.S. It is also determined
that neither of the documents reviewed contains language that expressly incorporates it with any of the other
documents reviewed.
The documents reviewed are not subject to documentary stamp tax as imposed under s. 201.08(1)(a), F.S., but would
be subject to tax imposed under s. 201.08(1)(b), F.S., if they purport to establish a lien and are filed or recorded in
Florida.

August 8, 2006

Re: Technical Assistance Advisement No. 06B4-007
Documentary Stamp Tax - Loanliner Credit Agreement
Section 201.08(1)(a), F.S.
XXX ("Taxpayer")
Dear:
This is in response to your letter dated June 9, 2006, requesting a Technical Assistance Advisement regarding
application of Florida's documentary stamp tax as imposed under s. 201.08(1)(a), F.S., upon documents executed in
Florida that are part of a Loanliner credit agreement.
Facts as Presented by Petitioner
You have provided for review, a Loanliner Credit and Security Agreement PLUS, a Loanliner Credit Insurance

Application & Schedule, a Loanliner Open-End Disbursement Receipt Plus, and a Loanliner Security Agreement.
Request for Advisement
You request determination by the Department of Revenue whether documentary stamp tax, as imposed under s.
201.08(1)(a), F.S., is due on the documents provided for review.
Law and Discussion
Paragraph 201.08(1)(a), F.S., imposes documentary stamp tax on promissory notes and other written obligations
to pay money, executed, signed or delivered in Florida. A document executed, signed or delivered in Florida is taxable
if it contains an unconditional obligation to pay, or repay, a sum certain in money and the signature of the obligor. The
tax is based on the amount of the obligation at the rate of $.35 per $100 or fraction thereof.
Paragraph 201.08(1)(b), F.S., imposes documentary stamp tax on mortgages or liens filed or recorded in Florida.
The tax is based on the total amount of all obligations secured thereby at the rate of $.35 per $100 or fraction thereof.
Subsection 201.08(6), F.S., provides that the taxability of a document shall be determined solely from the face of
the document and any separate document expressly incorporated into the document. Rule 12B-4.052(6), F.A.C.,
provides that a document does not expressly incorporate another document by implication or by mere reference and
description of the other document. Examples of terminology whereby a document is expressly incorporated into the
document under examination include, but are not limited to: (document) is incorporated herein; (document) the terms
of which are incorporated herein; (document) is made a part hereof; (document) is made a part of; and, (document)
shall become a part of.
Position of the Department
It is determined that the Loanliner Credit and Security Agreement PLUS, the Loanliner Credit Insurance Application
& Schedule, the Loanliner Open-End Disbursement Receipt Plus, and the Loanliner Security Agreement provided for
review are not subject to documentary stamp tax imposed under paragraph 201.08(1)(a), F.S., as independent
documents, since none of these documents contains an unconditional obligation to pay or repay a sum certain in
money and the signature of the borrower. It is also determined that none of the documents reviewed contains
language that expressly incorporates it with any of the other documents reviewed, and as such no two or more of the
documents reviewed can be considered as a single document for documentary stamp tax purposes.
Any documents not provided for review and referred to in one or more of the documents reviewed, such as the
addendum referred to in the first paragraph of the Loanliner Credit/Security Agreement PLUS and the proceeds check
referred to in the Loanliner Open-End Disbursement Receipt Plus, may be subject to documentary stamp tax. If any of
these other documents contain language that expressly incorporates any of the other documents, including the
documents reviewed, documentary stamp tax would be due if the expressly incorporated documents are executed,
signed or delivered in Florida and if the documents, when considered together, contain an unconditional obligation to
pay a sum certain in money.

Documentary stamp tax as imposed under paragraph 201.08(1)(b), F.S., is due on a mortgage or other lien filed or
recorded in Florida. The documents reviewed are not subject to documentary stamp tax as imposed under s.
201.08(1)(a), F.S., but would be subject to tax imposed under s. 201.08(1)(b), F.S., if they purport to establish a lien
and are filed or recorded in Florida. The Loanliner Security Agreement and the Credit Security Agreement Plus
reviewed provide for a lien on the property described in the "Security Offered" and "Security" sections respectively.
Tax imposed under s. 201.08(1)(b), F.S., would be due on either of these documents based on the full amount
secured thereby, if either is filed or recorded in Florida.
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,
Charles T. Phillips
Tax Law Specialist
Technical Assistance and Dispute Resolution
CTP/mh
Record ID: 21662