Did repeal of Florida's credit-union intangible-tax rule eliminate the underlying tax immunity for federal and state credit unions?

Plain-English summary

Florida confirmed that federal credit unions continued to receive the tax immunity provided by federal law, except for the local real- or personal-property taxes identified in that law. State-chartered Florida credit unions continued to receive the same immunity through section 213.12(2).

Repeal of the Department's credit-union exemption rule did not change that result. The rule had been repealed as obsolete after Florida repealed its annual intangible tax effective January 1, 2007.

What this means for you

An administrative rule's repeal does not necessarily repeal an exemption or immunity that independently rests on federal and state statutes. Here, the rule change followed repeal of the annual tax itself.

Common questions

Did federal credit-union immunity continue? Yes, to the extent provided by federal law.

Did Florida credit unions receive the same immunity? Yes, under the cited state statute.

Why was the administrative rule repealed? The Department described it as obsolete after repeal of the annual intangible tax.

Citations and references

• 12 U.S.C. § 1768, Fla. Stat. § 213.12(2), and former Fla. Admin. Code r. 12C-2.003(3), as discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09B4-004

Original ruling text

SUMMARY
QUESTION: Do State and Federal Credit Unions continue to be exempt for the imposition of
intangible property owned or issued by credit unions, and is the exemption effected by the repeal
of Rule 12C-2.003(3), F.A.C.
ANSWER: Yes, they continue to be exempt to the extent that federally chartered credit unions
have immunity from state and local taxation under the statutes of the United States. The
exemption is not affected by the repeal of Rule 12C-2.003(3), F.A.C.
May 28, 2009

XXX
XXX
XXX
Re:

Technical Assistance Advisement No.09B4-004
Intangible Tax-Exemptions for Credit Unions
Chapter 199, Florida Statutes (F.S.)
Section 213.12(2), F.S.
Rule 12C-2.003(3), F.A.C. [repealed]
XXX. (hereinafter Corporation)

Dear :
Your letter dated March 2, 2009, requesting a Technical Assistance Advisement has been
referred to this office for response.
Facts as Presented by Petitioner
Your letter provides, in pertinent part:
…Rule 12C-2.003(3), F.A.C.... previously acknowledged a tax exemption for all
intangibles owned or issued by credit unions under state or federal law so long as
the exemption for federal credit unions existed.
We believe that our state and federal credit unions continue to be exempt from the
intangible tax based on the IRS Code, §213.12, Fla. Stat., and the Federal
Credit Union Act. However, with the repeal of 12C-2.003(3), F.A.C. that expressly
acknowledged this exemption, we are unclear of the Department’s position.
Request for Advisement
Your letter asked the following questions:

1. [Do] State and Federal Credit Unions continue to be exempt for the imposition of
intangible property owned or issued by credit unions [?]; and

2. [Does] the repeal of Rule 12C-2.003(3), F.A.C. [have] any effect on the
   exemption [?]
   Law and Discussion
   Section 1768 of Title 12 of the United States Code exempts federal credit unions from all
   taxes imposed by the United States or by any state, territorial, or local taxing authority,
   except for local real or personal property tax.
   Section 213.12(2), F.S. provides:
   All credit unions now or hereafter chartered under the laws of the state shall have
   the same immunity from state and local taxation that federally chartered credit
   unions have from time to time under the statutes of the United States.
   Rule 12C-2.003 (3), F.A.C., provided:
   The following intangible property shall be exempt from the tax:

(3) Credit Unions all intangibles owned or issued by credit unions chartered under
federal or Florida law, so Long as the exemption for federal credit unions exists.
-

The Florida Legislature repealed the annual intangible tax effective January 1, 2007. As a
result, the Department amended its rules (effective January 28, 2008) to reflect the
change(s) in the law. Included in this effort was the repeal of Rule 12C-2.003, F.A.C., due
to obsolescence.
Response

1. [Do] State and Federal Credit Unions continue to be exempt for the imposition of
   intangible property owned or issued by credit unions[?];
   Answer: Yes, to the extent that federally chartered credit unions have immunity from state
   and local taxation under the statutes of the United States.
2. [Does] the repeal of Rule 12C-2.003(3), F.A..C. [have] any effect on the exemption[?]

Answer: No.
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#: 60735