Were the submitted line-of-credit agreement, attestation, access check, and control agreement subject to Florida documentary stamp tax?

Plain-English summary

A lender submitted an account attestation, loan agreement, account control agreement, and access check used for loans secured by marketable securities. The loan and control agreements would not be recorded in any Florida county's public records under the stated facts.

Florida found the documents were not independently taxable under section 201.08(1)(a). None contained both an unconditional obligation to pay or repay a sum certain and the borrower's signature, and none expressly incorporated another reviewed document. They therefore could not be combined into one taxable instrument.

The filing status mattered. The loan agreement contained language creating a lien on property. Although it was not taxable as an unrecorded stand-alone written obligation on the submitted facts, it would be taxable under section 201.08(1)(b) if filed or recorded in Florida.

What this means for you

Florida looked to the face of each credit document and any expressly incorporated document. Missing a fixed repayment promise and signature avoided one tax route here, but lien language created a separate tax risk if the document entered Florida's public records.

Common questions

Were the four submitted documents independently stamp-taxable? No, under the stated facts.

What elements were missing? An unconditional obligation to pay or repay a sum certain in money together with the borrower's signature.

Could Florida combine the documents? No. None expressly incorporated another reviewed document, and implication or mere reference was insufficient.

What would change the answer for the loan agreement? Filing or recording it in Florida, because it contained language providing for a lien on property.

Did the ruling cover other loan documents? No. It warned that documents not submitted for review could lead to a different determination.

Citations and references

• Fla. Stat. § 201.08(1)(a) (written obligations executed, signed, or delivered in Florida)
• Fla. Stat. § 201.08(1)(b) (mortgages and liens filed or recorded in Florida)
• Fla. Stat. § 201.08(6) (face of the document and express incorporation)
• Fla. Admin. Code r. 12B-4.052(6) (express incorporation)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 07B4-002

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, an Account Attestation, an
Agreement, an Access Check, and an Account Control Agreement.
ANSWER: 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 Agreement, the Account Attestation, the Access Check, and the Account
Control 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.
This determination was made based on review of only those documents that were submitted. If
other documents are used during the loan process, a different determination might result.

February 28, 2007

Re:

Technical Assistance Advisement No. 07B4-002
Documentary Stamp Tax – Line of Credit Agreement
Section 201.08(1)(a), F.S.
XXX (“Taxpayer”)

Dear:
This is in response to your letter dated November 10, 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 line of credit
agreement.
Facts as Presented by Petitioner
Taxpayer conducts business in Florida and in multiple other states through separated
business locations in those states. One of the many business activities conducted by Taxpayer is
the making of loans to customers secured by marketable securities. In an effort to standardize its
documentation process and minimize the documentation required in order to evidence such a
loan, Taxpayer has created the XXX Account Attestation (the “Account Attestation”), the XXX

Agreement (the “Loan Agreement”) and the XXX Account Control Agreement (the “Account
Control Agreement”). Exhibits of these documents were included for review. The Account
Attestation, Loan Agreement and Account Control Agreement have been designed to be used in
multiple jurisdictions. It is anticipated that a customer (a “Borrower”) needing a loan will
complete a verbal application and then the Account Attestation and will submit the same to
Taxpayer for approval. Upon approval and authorization of the loan by Taxpayer, Taxpayer will
notify the Borrower of its approval and the Borrower will then sign the Loan Agreement and an
Account Control Agreement. Neither the Loan Agreement nor Account Control Agreement will
be recorded in the public records of any county in Florida. As described in paragraph 3 of the
Loan Agreement, Borrower will obtain the loan funds through one or more of the following
methods:
(1) The use of an XXX Access Check furnished to Borrower for that purpose (the “Check”)
(a copy of the form of which was included for review);
(2) a telephone request:
(3) an internet request; or
(4) from a teller at a branch office of Taxpayer.
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 Account Attestation, the Loan Agreement, the Account Control
Agreement and the Check provided for review are not subject to documentary stamp tax imposed
under paragraph 201.08(1)(a), F.S., as independent documents since neither document contains
an unconditional obligation to pay or repay a sum certain in money and the signature of the
borrower. It is also determined that neither 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.
This determination was made based on review of only those documents that were
submitted. If other documents are used during the loan process, a different determination might
result.
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 and determined to
not be subject to documentary stamp tax as imposed under s. 201.08(1)(a), F.S., 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. For example, the Loan Agreement does contain language that provides for a
lien on property (see page 3 “13. SECURITY”). The Loan Agreement would therefore be
subject to documentary stamp tax as imposed under s. 201.08(1)(b), F.S., if it 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: 26508