When did Florida documentary stamp tax apply to occupancy documents for cooperative mobile-home units?

Subject

Cooperative Units

Plain-English summary

Documentary stamp tax applied to the document that first granted a shareholder the right to occupy a cooperative mobile-home unit, whether or not the document was recorded. A memorandum of occupancy or other ownership document conveyed an interest in realty and was taxed on the total consideration paid for the unit.

If the purchase price included both land and the mobile home, both were included in the tax base. If the resident already owned the mobile home and bought only the land interest, only the land price was included. A master occupancy agreement that conveyed no interest to another person was not taxable.

The Department also said properly taxed ownership should not be taxed again merely because an additional document later evidenced the same interest.

What this means for you

The document's title did not control. The key question was whether it conveyed the right of occupancy in the cooperative unit. Purchases from the cooperative and approved purchases from another shareholder were both taxable conveyances.

Common questions

Q: Are mobile-home cooperative residents tenant-stockholders for this tax? Yes, according to the ruling. A cooperative unit could be in a mobile home or another type of structure.

Q: Was recording required before tax applied? No. Tax arose when the ownership or occupancy document was delivered and accepted, whether recorded or not.

Q: Was a second document taxed after tax had already been paid on the same ownership interest? No. Later documents merely providing additional evidence of the same properly taxed ownership did not create another tax.

Citations and references

• Fla. Stat. §§ 201.02(1), (2) and 719.103 — cooperative occupancy interests
• Fla. Admin. Code r. 12B-4.013(11) — cooperative units
• Fla. Att'y Gen. Op. 064-41 — proprietary leases and cooperative stock
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B4-005

Original ruling text

Apr 01, 1993

Re: Technical Assistance Advisement 93(B)4-005
Documentary Stamp Tax on Cooperative Units
Section 201.02, F.S.
XXX (hereinafter Cooperative)

Dear :

This is in answer to your request for a technical
assistance advisement requesting an opinion on substantially the
following questions:

1. Is the unit owner of a cooperative parcel in a mobile
   home park considered a "tenant-stockholder" who
   "occupies an apartment building owned by a cooperative
   apartment corporation?"
2. On what basis would the Department claim any
   documentary taxes on proprietary leases issued by the
   taxpayer?
3. If a Memorandum of Occupancy Agreement was not
   previously recorded for a unit owner who was a
   shareholder at the time the corporation purchased the
   park, would any taxes be due and payable upon the
   recording of such an instrument?
4. Would any tax be payable upon the recording of a
   Memorandum of Occupancy Agreement relating to the
   issuance of a proprietary lease to a shareholder/unit
   owner who purchased a unit from the park/taxpayer
   after the date the park was purchased by the
   corporation?
5. Would any tax be payable upon the issuance of a Master
   Occupancy Agreement and/or recording of Memorandum of
   Occupancy Agreement to a shareholder/unit owner who
   purchases his unit from someone other than the
   park/taxpayer?
6. In each of the foregoing scenarios, on what value
   would the tax, if any, be based? (i.e. would the
   value of the mobile home be subject to tax?)

DISCUSSION AND LAW

Pursuant to s. 201.02(1) and (2), F.S., the documents
conveying any interest in real property are subject to
documentary stamp tax whether recorded or not:

"(1) On deeds, instruments, or writings whereby any lands,
tenements, or other real property or any interest therein,
shall be granted, assigned, transferred, or otherwise
conveyed to, or vested in, the purchaser or any other
person by his direction, on each $100 of the consideration
therefor the tax shall be 70 cents. When the full amount
of the consideration for the execution, assignment,
transfer, or conveyance is not shown in the face of such
deed, instrument, document, or writing, the tax shall be at
the rate of 70 cents for each $100 or fractional part
thereof of the consideration therefor....
"(2) The tax imposed by subsection (1) shall also be
payable upon documents by which the right is granted to a
tenant-stockholder to occupy an apartment in a building
owned by a cooperative apartment corporation or in a
dwelling on real property owned by any other form of
cooperative association as defined in s. 719.103...."
(e.s.)

The tax is based on the total consideration therefor at the
rate of $.70 per $100 or fractional part thereof on whichever
document first evidences the right to occupy the cooperative
unit.

Rule 12B-4.013, F.A.C., states:

"(11) Cooperative Units: Instruments by which the right is
granted to a tenant-stockholder to occupy a unit owned by a
cooperative corporation are subject to tax."

As to question one, the unit owner of a cooperative parcel
in a mobile home park is considered a tenant-stockholder who
occupies a unit owned by a cooperative apartment corporation. A
"unit" may be in any type of structure: brick, wood, mobile

home, etc. which is owned in association with others to form a
cooperative.

Further, Attorney General's Opinion 064-41 states in part
that the proprietary lease and the stock in a cooperative are
inseparable and must be transferred or assigned together. The
proprietary lease and the stock must be considered as a unit for
purposes of taxation under Chapter 201, F.S. The proprietary
lease of a cooperative unit (and the common properties used in
connection therewith) in law convey an interest in "lands,
tenements or other realty," within the purview of s. 201.02,
F.S., and is subject to taxation on the consideration paid for
the stock and proprietary lease.

As to question two, the basis for the documentary stamp tax
on the memorandum of lease (Memorandum of Occupancy Agreement)
issued to the purchaser is that this document represents a
"writing whereby an interest in realty is conveyed" as in s.
201.02(2), F.S., and Rule 12B-4.013(11), F.A.C. The basis for
the tax is the total purchase price paid for the unit (both land
and mobile home), composed of cash and/or other property plus
any note and/or mortgage given to the lender.

As to question three, if a writing or deed was not
previously recorded for a unit owner who was a shareholder
(owner of his/her unit) at the time the corporation purchased
the park, tax was due when the document representing this
interest was executed and accepted by the purchaser, whether
recorded or not, in the same manner as an unrecorded deed.

Documentary stamp tax would be due on the document based on
the consideration paid for the unit under s. 201.02 (2), F.S.

If unit owners have previously paid documentary stamp taxes
attached to documents evidencing their ownership of units in the
cooperative prior to a new owner purchasing the cooperative
association's property, no additional documentary stamp taxes
would be due from each unit owner evidencing their interest in
their own units when those documents are recorded. The stamps
themselves affixed to the documents will show that the tax has
been paid. If no documentary stamp tax has been paid, then the

tax must be paid when the documents are recorded.

As to question four, Purchases of cooperative units may
sometimes be made in two ways: purchase from the cooperative
association or purchase from another shareholder/unit owner with
the approval of the association. Regardless of whether the unit
was purchased before or after the park property was purchased by
the corporation, whether the purchase was made from the
cooperative association or purchased from another
shareholder/unit owner with the approval of the cooperative
association, the conveyance to the unit/shareholder is subject
to documentary stamp tax under s. 201.02, F.S.

The transfer of ownership of the cooperative property from
one corporate entity/owner to another corporate entity/owner has
no effect on previously recorded documents evidencing the
purchase of the unit by the tenant/stockholder on which proper
documentary stamp tax for the conveyance has been paid. If
documentary stamp tax has not been paid on documents evidencing
the shareholder/unit owner's ownership of a unit, tax is due on
documents evidencing the right of occupancy.

As to question five, a Master Occupancy Agreement is not a
document which conveys any interest in realty to another person
or entity. It is not subject to documentary stamp tax.
However, if no documentary stamp tax has been paid on a document
representing ownership of a unit in the cooperative, upon
acceptance of a Memorandum of Occupancy Agreement by the
purchaser, tax is due.

If proper documentary stamp taxes have been paid relating
to the ownership of a cooperative unit, the additional documents
evidencing those same ownership interests would not be subject
to additional documentary stamp taxes. Similarly, where two
deeds evidence the conveyance of one piece of property wherein
the proper tax was paid on the first deed, tax is not required
on any subsequent deeds furnishing additional evidence of the
transfer between those same individuals or entities.

As to question six, the basis for the tax on the purchase
of a unit in the cooperative (from the association or from

another shareholder unit/owner), is the consideration paid for
the unit or total sales price. If the mobile home is part of
the purchase price, tax is due on the land and the mobile home.
If the shareholder unit/owner owns his/her own mobile home and
buys only the land on which to place the mobile home, tax is due
on the only item purchased, the price of the land.

When a mobile home is affixed to land, it becomes part of
the real property in the same manner as any other building. It
is no longer considered personal property.

DEPARTMENTS POSITION

Documentary stamp taxes are due on any instrument,
document, or writing whereby ownership or the right to occupy a
unit passes from the cooperative association to the resident
regardless of what title the instrument, document, or writing
bears. A master lease recorded in the public records which does
not convey an interest in real property to another person or
entity is not subject to tax. The Memorandum of Occupancy
Agreement or other document evidencing the right of occupancy in
the cooperative presented to a tenant/stockholder is subject to
documentary stamp tax under s. 201.02, F.S., whether recorded or
not.

Where proper documentary stamp taxes have already been paid
on a document evidencing the right of the current resident unit
owner to occupy a cooperative unit, no additional documentary
stamp taxes are due on additional documents evidencing that same
ownership, whether in the form of a lease or memorandum of
occupancy agreement. Documents evidencing ownership of a
cooperative unit should be recorded in the public records of the
county in which the property is located in the same manner as
any other ownership of real property.

Where the mobile home is part of the purchase price of the
unit in the cooperative, it is subject to documentary stamp tax
as a part of the consideration for the purchase. It is real
property.

Documentary stamp taxes are due on the purchase of a unit

from another shareholder unit/owner to a new shareholder
unit/owner. Whether the conveyance was from the cooperative
itself or from another shareholder/unit owner to a new unit
owner, documentary stamp tax is due on the conveyance of an
interest in realty represented by a Memorandum of Occupancy
Agreement or other document serving this purpose.

The key element is that the document evidencing the right
of occupancy in a cooperative unit of whatever type it is, is
subject to documentary stamp tax under s. 201.02, F.S., upon
delivery and acceptance of this document by the resident unit
owner whether the document evidencing ownership is recorded or
not.

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 and your request
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 by the Department
before disclosure. In an effort to protect the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

M.E. Clemens
Technical Assistant
Technical Assistance

MEC/mh