Are Florida Development Finance Corporation bonds and documents securing them exempt from documentary stamp and nonrecurring intangible taxes?

Plain-English summary

The Florida Department of Revenue ruled that bonds issued by the Florida Development Finance Corporation under Part X of chapter 288 were exempt from documentary stamp tax. Security documents and other instruments arising from or securing repayment of those bonds were also exempt from documentary stamp tax and nonrecurring intangible tax.

The same treatment extended to qualifying additional bonds, refinancing or refunding bonds, project extensions, similar security documents, and amendments or renewals—so long as the bonds were issued under the specified chapter 288 authority and the documents secured their repayment.

The Department derived the related-document exemption by implication from section 288.9606(2), which declares the bonds to serve an essential public and governmental purpose and exempts qualifying bonds from taxes.

What this means for you

Public-finance issuers and borrowers

Confirm the statutory authority for each bond issue and connect every security instrument directly to repayment of the qualifying bonds.

Lenders and closing teams

The exemption covered more than the bond instrument itself, but only for documents that arose from or secured qualifying FDFC debt.

Accountants and tax professionals

Maintain the issuance resolutions, project financing documents, mortgages, security agreements, amendments, and refinancing trail supporting the chapter 288 connection.

Common questions

Q: Were the bonds themselves exempt?
A: Yes, from documentary stamp tax under the ruling.

Q: Were mortgages and security agreements exempt?
A: Yes, when they arose from or secured repayment of the qualifying bonds.

Q: Did the exemption include nonrecurring intangible tax?
A: Yes, for the obligations and security documents described.

Q: What about later refinancing or amendments?
A: They were exempt if tied to bonds issued by the FDFC under Part X of chapter 288.

Citations and references

• Fla. Stat. §§ 201.07, 201.08(1)(a) and (b), 199.133(1), 288.9606(2), and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 18B4-002

Original ruling text

July 31, 2018

TAX: Documentary stamp tax and nonrecurring intangible tax
TAA NUMBER: 18B4‐002
ISSUES: Documentary stamp tax due and nonrecurring intangible tax due on bonds, obligations
to pay money, and security instruments given to secure the repayment of the bonds.
STATUTE CITE(S): 201.08(1)(a) and (b) and subsections 199.133(1) and 288.9606, Florida
Statutes (F.S.).
QUESTION: Is documentary stamp due on bonds issued pursuant to Part X of Chapter 288, F.S.,
and security instruments that arise out of or are given to secure the repayment of the bonds.
ANSWER The bonds and security documents and all other documents that arise out of or are given to
secure the repayment of the Bonds are exempt from documentary stamp taxes due under section
201.08(1)(a) and (b), F.S.

QUESTION: Is nonrecurring intangible tax due on the obligations that arise out of the issuance
of bonds that are issued pursuant to Part X of Chapter 288, F.S.
ANSWER: The obligations that arise out of the issuance of the bonds are exempt from the nonrecurring
intangible tax.

XXXXX
XXXXX
XXXXX

Re:

Technical Assistance Advisement No. 18B4‐002
Documentary Stamp Tax and Nonrecurring Intangible Tax
Sections 201.07, 201.08(1)(a) and (b) and subsections 199.133(1) and 288.9606, Florida
Statutes (F.S.)
XXXXX (“Taxpayer”)
XXXXX (“Taxpayer Parent”)
Florida Development Finance Corporation (“FDFC”)

Dear XXXXX:
This is in response to your request dated January 31, 2018, for a Technical Assistance
Advisement (TAA) pursuant to s. 213.22, F.S., and Rule Chapter 12‐11, Florida Administrative
Code (F.A.C.), concerning the application of Florida’s documentary stamp tax, as imposed under
sections 201.08(1)(a) and (b), F.S., and nonrecurring intangible tax, as imposed under section

XXXXX
July 31, 2018
Florida Department of Revenue
Page 2

199.133(1), F.S., on certain bonds issued under Chapter 288, F.S., and various security
documents that arise out of the issuance of the bonds. An examination of your letter has
established that you have complied with the statutory and regulatory requirements for
issuance of a TAA. Therefore, the Department is hereby granting your request for a TAA.
FACTS AS PRESENTED BY PRACTITIONER
The documents presented for examination are as follows:
XXXX
FDFC, pursuant to Part X of Chapter 288 F.S., issued an aggregate of $XXXXX in bonds (“Bonds”)
to finance a XXXXX (the “Project”). The FDFC determined the Project will serve the public
purposes as prescribed in Part X of Chapter 288 F.S. FDFC has loaned the proceeds from the
bond issuance to Taxpayer, which has issued various security documents (Security Documents)
to secure the repayment of the Bonds and any additional parity bonds (Additional Bonds)
issued by FDFC to finance the Project. The principal security documents consist of the XXXXX,
XXXXX, XXXXX, XXXXX, and XXXXX.
REQUESTED RULING
You requested that the Department confirm the following:

1. That the Bonds, Additional Bonds, the Security Documents, and all other documents
   issued to secure the payment of the Bonds, or Additional Bonds, are exempt from
   documentary stamp taxes due under section 201.08(1)(a) and (b), F.S., and nonrecurring
   intangible tax due under section 199.133(1), F.S.
2. That any other bonds issued by the FDFC pursuant to Part X of Chapter 288, F.S., to
   finance or refinance the Project or any extension of the Project, and any security
   documents similar to the Security Documents entered into by Taxpayer, or an affiliated
   entity, to secure these bonds would also be exempt from documentary stamp taxes due
   under section 201.08(1)(a) and (b), F.S., and nonrecurring intangible tax due under
   section 199.133(1), F.S.
3. That any amendments or renewals of the Security Documents, including, but not limited
   to, any amendments or renewals in connection with any refinancing or refunding
   transaction, or expansion of the Project, which involves financing by the FDFC would be
   exempt from documentary stamp taxes due under section 201.08(1)(a) and (b), F.S., and
   nonrecurring intangible tax due under section 199.133(1), F.S.

XXXXX
July 31, 2018
Florida Department of Revenue
Page 3

4. That any other security documents similar to the Security Documents entered into by
   Taxpayer or an affiliated entity to secure bonds issued by FDFC pursuant to Part X of
   Chapter 288, F.S., to finance or refinance the Project or an extension of the Project,
   would be exempt from documentary stamp taxes due under section 201.08(1)(a) and
   (b), F.S., and nonrecurring intangible tax due under section 199.133(1), F.S.
   LAW AND DISCUSSION
   Section 201.07, F.S., imposes documentary stamp tax on all bonds, debentures, or certificates
   of indebtedness issued in the state by any person, and all instruments and documents, however
   termed, issued by any corporation with interest coupons or in registered form; on each $100 of
   the face value or fraction thereof, the tax shall be 35 cents.
   Section 201.08(1)(a), F.S., imposes documentary stamp tax on written obligations to pay
   money, and each renewal thereof, made, executed, delivered, sold, transferred, or assigned in
   Florida. The tax rate is $.35 for each $100 or fraction thereof of the indebtedness or obligation
   evidenced thereby. The tax on any document described in this paragraph may not exceed
   $2,450.
   Section 201.08(1)(b), F.S., imposes documentary stamp tax on mortgages, trust deeds, security
   agreements, or other evidences of indebtedness filed or recorded in this state, and each
   renewal of the same. The tax rate is 35 cents on each $100 or fraction thereof of the
   indebtedness or obligation evidenced thereby.
   Section 199.133, F.S., imposes the nonrecurring intangible tax on notes and other obligations to
   the extent secured by Florida real property.
   Section 288.9606(2), F.S., provides in pertinent part that bonds issued under Part X of Chapter
   288, F.S., are declared to be for an essential public and governmental purpose. Bonds issued
   under this act, the interest on which is exempt from income taxes of the United States,
   together with interest thereon and income therefrom, are exempted from all taxes, except
   those taxes imposed by chapter 220, on interest, income, or profits on debt obligations owned
   by corporations.
   DEPARTMENT’S POSITION
   It is determined that section 288.9606(2), F.S, provides not only an exemption for bonds issued
   under Part X of Chapter 288, F.S., but also by implication, an exemption for notes, mortgages,
   security agreements, or other instruments that arise out of or are given to secure the
   repayment of bonds issued under Part X of Chapter 288, F.S.
   As to your requested rulings

XXXXX
July 31, 2018
Florida Department of Revenue
Page 4

1. The Bonds are exempt from documentary stamp tax due under section 201.07, F.S. The
   Security Documents and all other documents that arise out of or are given to secure the
   repayment of the Bonds are exempt from documentary stamp taxes due under section
   201.08(1)(a) and (b) and nonrecurring intangible tax due under section 199.133(1), F.S.
   The Additional Bonds, the Security Documents, and any other documents that arise out
   of or are given to secure the repayment of the Additional Bonds are exempt from
   documentary stamp taxes due under sections 201.07 and 201.08(1)(a) and (b) and
   nonrecurring intangible tax due under section 199.133(1), F.S., as long as the Additional
   Bonds are issued pursuant to Part X of Chapter 288, F.S.
2. Any other bonds issued by the FDFC pursuant to Part X of Chapter 288, F.S., to finance
   or refinance the Project or any extension of the Project would be exempt from tax due
   under section 201.07, F.S. Any security documents similar to the Security Documents
   entered into by Taxpayer, or an affiliated entity, to secure these bonds would also be
   exempt from documentary stamp taxes due under section 201.08(1)(a) and (b), F.S., and
   nonrecurring intangible tax due under section 199.133(1), F.S., as long as the security
   documents arise out of or are given to secure the repayment of the bonds.
3. Amendments or renewals of the Security Documents, including, but not limited to, any
   amendments or renewals in connection with any refinancing or refunding transaction,
   or expansion of the Project which involves financing by the FDFC would be exempt from
   documentary stamp taxes due under section 201.08(1)(a) and (b), F.S., and nonrecurring
   intangible tax due under section 199.133(1), F.S, as long as the amendments or renewals
   are given as security for the repayment of bonds issued by the FDFC pursuant to Part X
   of Chapter 288, F.S.
4. Any other security documents similar to the Security Documents entered into by
   Taxpayer or an affiliated entity to secure bonds issued by FDFC pursuant to Part X of
   Chapter 288, F.S., to finance or refinance the Project or an extension of the Project,
   would be exempt from documentary stamp taxes due under section 201.08(1)(a) and
   (b), F.S., and nonrecurring intangible tax due under section 199.133(1), F.S., as long as
   the security documents are given as security for the repayment of bonds issued by the
   FDFC pursuant to Part X of Chapter 288, F.S.
   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.

XXXXX
July 31, 2018
Florida Department of Revenue
Page 5

You are further advised that this response, your request and related documents are public
records under Chapter 119, F.S., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Your name, address, and any other details, which might lead to
identification of the taxpayer, must be deleted before disclosure.
In an effort to protect the confidentiality of such information, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, backup
material and response within fifteen days of the date of this advisement.
Sincerely,

Henry Small
Henry Small
Tax Law Specialist
Technical Assistance and Dispute Resolution
Record ID: 47136