Were a signed LoanLiner credit agreement and advance-request security form subject to Florida documentary stamp tax?

Subject

Credit Union Loans

Plain-English summary

Neither submitted LoanLiner form was subject to documentary stamp tax. Both were signed by the borrower, but neither contained a written promise to pay a sum certain in money.

The Department explained that all three elements were required on the document: a written promise to pay, a sum certain, and the borrower's signature.

What this means for you

A signature and loan-related information were not enough. The exact written obligation on the face of the form controlled.

Common questions

Q: Were both forms signed? Yes.

Q: Why were they still nontaxable? Neither promised payment of a sum certain.

Citations and references

• Fla. Stat. § 201.08(1) — tax on written obligations to pay money
• Fla. Admin. Code r. 12B-4.052(6) — written promise, sum certain, and signature requirements
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B4-013

Original ruling text

Jun 10, 1993

Re: Technical Assistance Advisement No. 93(B)4-013
Documentary Stamp Tax; Open-End Loan Forms

Dear :

You have petitioned for a Technical Assistance Advisement
pursuant to s. 213.22, F.S., and Florida Administrative Code
Rule 12-11.003.

Issue

Whether open-end loan forms used by lenders in making loans
to their members are subject to documentary stamp tax under
s. 201.08(1), F.S.

You have enclosed the following forms for our
determination:

1. LoanLiner Application and Credit Agreement form No.
   BFL214 676LL; and
2. LoanLiner Advance Request Voucher and Security
   Agreement, form No. VFL064 6826LL.

Background

LoanLiner Credit Agreement and Insurance Certificate No.
BFL214 676LL, signed by the borrower, outlines the plan and
provides for credit life/credit disability insurance as a
voluntary option rather than a requirement for credit.

LoanLiner Advance Request Voucher and Security Agreement
No. VFL064 6826LL, signed by the borrower, provides the amount
of any loan advance requested by borrower, states the security
for the loan such as a motor vehicle, boat, etc., and requests
borrower to provide proof of insurance on that particular
security.

Discussion and Law

The tax levied by s. 201.08(1), F.S., is an excise tax on
documents that, (a) contain a written promise to pay; (b)
contain a sum certain in money; (c) which are signed by the
borrower. Also, see Florida Administrative Code Rule 12B4.052(6).

Department's Position

Although each of the forms are signed by the borrower, none
contain a written promise to pay a sum certain in money.
Consequently, the forms submitted for determination are not
subject to tax under s. 201.08(1), 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,

W.E. Webb
Technical Assistant
Technical Assistance

WEW/mh