Did assigning, amending, and restating a Florida mortgage loan at a reduced principal balance trigger additional documentary stamp or nonrecurring intangible tax?

Plain-English summary

The existing promissory note and mortgage were assigned to a new lender, then amended and restated at a principal amount below the current unpaid balance. The amended note modified, superseded, and replaced the prior note and therefore qualified as a renewal.

The renewal notes were exempt from documentary stamp tax if their combined amount on each execution date did not exceed the original note's unpaid balance, the obligor remained the same, and the original note showing proper tax payment was attached. A corresponding amended mortgage was exempt when it secured a qualifying exempt renewal.

No additional nonrecurring intangible tax was due if the secured obligation at all times remained at or below the unpaid original balance. Assignment of the existing note and mortgage to a new lender also created no new tax because it did not change the borrower's underlying obligation.

What this means for you

The labels "amended" and "restated" do not control by themselves. Track the entire renewal chain, principal balances, obligor identity, attachment of the tax-paid original, and the amount secured.

Common questions

Did the reduced-balance renewal owe documentary stamp tax? No, if all statutory renewal conditions were met.

Did the amended mortgage owe tax? No, if it secured the exempt renewal note.

Did assignment to a new lender create tax? No, because it did not change the underlying obligation.

Citations and references

• Fla. Stat. §§ 199.133, 201.08, and 201.09, as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 12B4-002

Original ruling text

Executive Director
Lisa Vickers

TAX: Documentary Stamp Tax and Nonrecurring Intangible Tax
TAA NUMBER: 12B4-002
ISSUE: Amended and Restated Note and Mortgage, Assignment of Mortgage
STATUTE CITE(S): Sections 199.133, 201.08, 201.09, F.S.

QUESTION: With respect to an existing promissory note assigned to a new lender, if the note is amended
and restated, i.e., renewed, for an amount than its current unpaid balance and all other provisions of s.
201.09, F.S., are met, will the renewal note and corresponding mortgage be exempt from documentary
stamp tax and nonrecurring intangible tax imposed under s.s. 201.08 and 199.133, respectively?
ANSWER: The amended and restated note will be exempt from documentary stamp tax, since it is being
renewed for an amount less than the current outstanding balance as of the date of the renewal. Likewise,
the corresponding amended and restated mortgage is also exempt since the renewal note qualifies as an
exempt renewal under s. 201.09, F.S. In addition, no additional nonrecurring intangible tax will be due on
the renewal note or the amended and restated mortgage since the new obligation secured is less than
unpaid balance of the original obligation.

April 05, 2012
XXX
XXX
XXX
Re:

Technical Assistance Advisement 12B4-002
Documentary Stamp Tax and Nonrecurring Intangible Tax– Assignment of Note and Mortgage
Sections 199.133, 201.08(7) and 201.09, F.S.
XXX (“Taxpayer”)

Dear XXX:
This is in response to your letter dated XXX, requesting a determination whether documentary
stamp tax and nonrecurring intangible tax are due and payable in connection with a promissory note and
mortgage which will be assigned to a new lender and subsequently amended and restated. This response
constitutes a Technical Assistance Advisement under Chapter 12-11, Florida Administrative Code
(F.A.C.), and is issued to you under the authority of Section 213.22, F.S.
FACTS PROVIDED BY TAXPAYER
Your firm represents the Taxpayer, a Florida limited partnership, which executed a note (the
“Original Note”) dated XXX, in the original principal amount of $XXX, payable to XXX (the “Original
Lender”). The Original Note was secured by a mortgage (the “Original Mortgage”) from the Taxpayer to
the Original Lender, which was recorded in the official records of XXX, Florida, on XXX. Documentary
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Tallahassee, Florida 32399-0100

Technical Assistance Advisement 12B4-002
Page 2

stamp taxes and nonrecurring intangible taxes were paid on the original principal amount evidenced by the
Original Mortgage upon recordation.
The Original Mortgage was subsequently assigned to XXX (hereinafter “Assignee”) as of XXX,
and recorded on XXX (the “Assignee Assignment”). The Original Note was subsequently assigned to
participant banks (collectively, the “Banks”). The Original Note was substituted and replaced by XXX
bifurcated promissory notes (collectively, the “Bifurcated Notes”). The Bifurcated Notes were further
assigned by the Banks to Assignee and consolidated into a single promissory note dated as of XXX, in the
principal amount of $XXX (the “Substitute Promissory Note”). The Original Mortgage was then assigned
to XXX (the “Lender”), pursuant to a mortgage assignment dated as of XXX, and recorded in the official
records (the “Lender Assignment of Mortgage”).
Pursuant to the Taxpayer’s request, the Lender agreed to an amendment and restatement of the
Substitute Promissory Note and the Original Mortgage. As of XXX, the outstanding principal balance
secured by the Taxpayer due and owing under the Substitute Promissory Note was $XXX. The Substitute
Promissory Note was then assigned to the Lender on XXX, and the outstanding principal amount was
decreased by $XXX to $XXX on the same date (the “Amended and Restated Mortgage Note”). The
Lender Assignment of Mortgage was amended and restated by the Taxpayer and the Lender (the
“Amended and Restated Mortgage”), in order to evidence that it now secured the amount of the Amended
and Restated Note for $XXX.
As a result of the above transactions, new documents dated as of XXX, were drawn up in the form
of an Amended and Restated Note (the “Note”), and an Amended and Restated Multifamily Mortgage, an
Assignment of Amended and Restated Multifamily Mortgage, an Assignment of Leases and Rents, and a
Security Agreement (the “Mortgage”). A principal sum of $XXX is reflected as the loan amount that the
Taxpayer promises to pay the Lender pursuant to the terms of the Note. The Mortgage (as deemed to be
“for as long as the loan is insured or held by HUD”) states it is being given by the Taxpayer for the benefit
of the Lender in order to secure the repayment of the indebtedness evidenced by the Taxpayer’s Note
payable to the Lender.
REQUESTED ADVISEMENT
The Bank and HUD request confirmation that no documentary stamp taxes or nonrecurring
intangible taxes are payable in connection with the Amended and Restated Mortgage Note, the
Assignment of Mortgage, or the Amended and Restated Mortgage.
RESPONSE
The Amended and Restated Mortgage Note modified, restated, superseded, and replaced the
Substitute Promissory Note, making it a renewal note under s. 201.08(5), F.S. Section 201.09, F.S.,
provides that certain transactions involving renewals of notes and mortgage are exempt from documentary
stamp tax. A renewal note evidencing a term obligation that does not increase the unpaid principal balance
or add a new borrower/obligor, and merely changes the interest rate, the maturity date, or the payment

Technical Assistance Advisement 12B4-002
Page 3

terms, is not subject to tax, provided the original note showing proper payment of tax is attached to the
renewal.
In this case, the principal amount of the Substitute Promissory Note as of XXX, was $XXX.
When the Substitute Promissory Note was assigned to the Lender on XXX, per the Taxpayer, the
outstanding balance was $XXX. The Substitute Promissory Note was then amended and restated under the
terms of the Amended and Restated Mortgage Note made and entered into as of XXX, by the Taxpayer
and the Lender, and the outstanding balance was reduced from $XXX to $XXX.

Several factors must be taken into account when determining whether the Amended and Restated
Mortgage Note is exempt from documentary stamp tax pursuant to s. 201.09, F.S. The documents
provided with the request indicate that additional substitute promissory notes were executed in favor of the
Banks prior to and after the bifurcated notes. Each substitute promissory note modified, restated,
superseded, and replaced the substitute promissory notes, making them renewal notes under s. 201.08(5),
F.S. Provided that: (1) the amount of the renewal notes which were executed on a given day did not
exceed the unpaid balance of the Original Note at the time of each renewal; (2) the obligor under these
renewal notes was the same as the original obligor (i.e., the Taxpayer); and (3) the Original Note showing
proper payment of tax was attached to each renewal, then the renewal notes are exempt from tax under s.
201.09, F.S. Presuming all three requirements were met, the Amended and Restated Mortgage Note is
exempt from documentary stamp tax, as it was renewed for $XXX, which is less than the current
outstanding balance of $XXX, as of XXX, (i.e., the renewal date).
Likewise, the Amended and Restated Mortgage for $XXX is not subject to documentary stamp tax
pursuant to s. 201.09(2), F.S., provided that the Amended and Restated Note which it secures qualifies as
an exempt renewal under s. 201.09(1), F.S.
The nonrecurring intangible tax imposed under s. 199.133(1), F.S., on notes and other obligations
secured by Florida real property was paid upon recordation of the Original Mortgage, which secured the
Original Note. Therefore, no additional nonrecurring tax will be due on the Amended and Restated
Mortgage Note or the Amended and Restated Mortgage, provided that the obligation secured by the
Original Mortgage, as amended by the subsequent renewal notes, was at all times less than or equal to the
unpaid balance of the Original Note at the time of each renewal.
A written instrument given or recorded to evidence the assignment of an existing note and
mortgage by a lender to a new lender does not result in a change to the underlying loan evidencing or
securing the primary note which the borrower/mortgagor is obligated to repay. The documentary stamp
tax and/or nonrecurring intangible tax is to be paid only once, based on the obligation secured, and an
assignment of the underlying note and mortgage has no effect on the amount of the obligation secured.
Therefore, the assignment of the Substitute Promissory Note and Assignment of Mortgage to the Lender
do not require additional documentary stamp tax and nonrecurring intangible tax. (See ss. 201.08(7) and
199.133(1), F.S.)

Technical Assistance Advisement 12B4-002
Page 4

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,

Joy. B. Eldred, CPA
Tax Law Specialist
Technical Assistance and Dispute Resolution
JBE/tlf
Record ID: 119355