Did four submitted credit-union loan and advance forms owe Florida documentary stamp tax as written obligations to pay money?

Subject

Credit Union Loans

Plain-English summary

None of the four submitted forms was subject to Florida documentary stamp tax as a written obligation to pay money. The Department said a taxable written obligation had to contain—or incorporate by reference—three elements: a promise to pay, a sum certain in money, and the borrower's signature.

The open-end disclosure and agreement contained a promise and borrower signature but no sum certain. Two funds-advance vouchers lacked both a promise to pay a sum certain and a borrower signature other than an endorsement acknowledging receipt of money. The loan-disbursement request lacked a promise to pay a sum certain and was not signed by the borrower.

What this means for you

The result followed from the contents of the four documents, not simply from their credit-union labels. A revised form or a form incorporating another signed document with a definite payment obligation could produce a different tax result.

Common questions

Q: What three elements did the Department require? A promise to pay, a sum certain in money, and the borrower's signature.

Q: Did the open-end credit agreement contain a promise to pay? Yes, but it did not state a sum certain, so it still lacked all required elements.

Q: Was acknowledging receipt of advanced funds enough as a borrower signature? Not on the two vouchers described in this ruling.

Citations and references

• Fla. Stat. § 201.08 — documentary stamp tax on written obligations to pay money
• Fla. Admin. Code r. 12B-4.006 — required elements of a taxable written obligation
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B4-012

Original ruling text

May 12, 1993

Re: Technical Assistance Advisement No. 93(B)4-012
Documentary Stamp Tax; Credit Union Loans
Section 201.08, F.S.
XXX (hereinafter Taxpayer)

Dear :

This is in answer to your request for a Technical
Assistance Advisement on substantially the following question:

Are the submitted forms subject to imposition of
documentary stamp taxes:

1. STD-FED-OB-10/92 (2.5M) Truth-in-Lending Disclosure
   Statement and Agreement and Credit Application for
   Open-end Credit Plan
2. L17644S Funds Advance Voucher
3. 5-17737 K2794H L.O.C. Funds Advance Voucher
4. Form #KA1 1202 rev. 11/89 Request for Loan
   Disbursement

DISCUSSION AND LAW

Under s. 201.08, F.S., and Rule 12B-4.006, F.A.C., in order
to be subject to documentary stamp tax, a written obligation to
pay money must contain three elements:

1. A promise to pay,
2. A sum certain in money, and
3. Signature of the borrower.

If the document does not contain all three elements or
incorporate them by reference to another document containing
these elements, the document is not subject to documentary stamp
tax as a written obligation to pay money.

Document No. 1 contains a promise to pay "... the aggregate

of all sums advanced from time to time under this Disclosure
Statement and Agreement...," but does not specify a sum certain
in money and is signed by the borrower.

Document No. 2 does not contain a promise to pay a sum
certain and is not signed by the borrower except as an
endorsement of having received a sum of money.

Document No. 3 is a similar document as No. 2 and does not
contain a promise to pay a sum certain and is not signed by the
borrower except as an endorsement of having received a sum of
money.

Document No. 4. does not contain a promise to pay a sum
certain and is not signed by the borrower.

DEPARTMENT'S POSITION

None of the four forms submitted with your request contain
all of the necessary elements to subject them to the documentary
stamp tax under Chapter 201, 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.

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