Did deeds for hotel-condominium units owe Florida's documentary stamp discretionary surtax when the units could only be rented to transients?

Plain-English summary

An LLC owned a 286-unit hotel-condominium complex. Each unit was a residential condominium but could be rented only to transients by the day, week, or month; the prospectus prohibited permanent residence.

Florida held that deeds from the LLC to individual unit purchasers were exempt from the documentary stamp discretionary surtax. The prospectus treated each condominium as a single residence unit, which brought the deed within the single-family-residence exemption. Transient-only use did not change that classification.

What this means for you

For this surtax, the legal classification of the conveyed unit controlled even though its permitted occupancy was short-term. Review the declaration, prospectus, deed, and current exemption requirements before applying the result to a mixed-use or differently structured project.

Common questions

Did the unit deeds owe discretionary surtax? No.

Did the ban on permanent residence defeat the exemption? No under the reviewed prospectus.

Could the units be rented? Yes, on daily, weekly, or monthly transient terms.

Citations and references

• Fla. Stat. §§ 201.031(1) and 201.02(1), as discussed in the advisement
• Fla. Admin. Code r. 12B-4.012(3) (single-family residences, including condominium units)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 08B4-003

Original ruling text

SUMMARY
QUESTION: Will discretionary surtax be required on the deeds between the LLC and the
purchasers of each condominium unit?
ANSWER: The Prospectus for the complex provides that each condominium is a single
residence unit. Therefore, the sale of each unit will qualify for exemption from the surtax.
May 6, 2008
Re:

Technical Assistance Advisement No. 08B4-003
Discretionary Surtax –Sale of condominium units
Section 201.031(1), F.S.
Rule 12B-4.012(3), F.A.C.
XXX (hereinafter Taxpayer)

Dear :
Your letter of February 6, 2008, 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 owns a 286 unit hotel-condominium. The units are considered residential
condominiums. The condo units are intended to be used as rental to transients. These units can
be rented on a day-to-day, week to week or month to month basis. The Prospectus regarding the
units does prohibit the unit owner from establishing a permanent residence at the unit.
Request for Advisement
You request that the Department issue a Technical Assistance Advisement that describes
how the discretionary surtax will be applied to the deed between the LLC and the purchasers of
each unit.
Provisions of Law and Discussion
Section 201.031(1), F.S., and Rule 12B-4.012(3), F.A.C., provide for the collection of
discretionary surtax on documents taxable under s. 201.02(1), F.S. However, single-family
residences, which include condominium units, are not subject to tax.

Page 2

Position of the Department
The Prospectus provides that each condominium is a single residence unit. Therefore,
the sale of each of these units will qualify for exemption from the surtax. The exemption will
apply even though the unit can only be used for transient rentals and is prohibited from use as a
permanent residence.
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 Turner
Tax Law Specialist
Technical Assistance and Dispute Resolution
CG/mh
Record ID: 41356