Which document in a lender's open-end LOANLINER package was subject to Florida documentary stamp tax?

Subject

Open-End Loan Forms

Plain-English summary

Only LOANLINER Advance Request Voucher No. VST004 6826LL was subject to Florida documentary stamp tax. It was signed by the borrower, stated the requested advance and prior balances as a new balance, and included the borrower's agreement to make the stated payments.

The Department explained that a taxable document had to contain a written promise to pay, a sum certain in money, and the borrower's signature. Of the seven application, credit, advance, security, lien, cosigner, and guaranty forms reviewed, only that advance voucher met all three requirements. Tax was based on its new balance.

What this means for you

The ruling classified the documents individually rather than taxing the open-end loan package as a whole. Exact form language and execution mattered.

Common questions

Q: Was the general credit agreement taxable? No, according to the ruling's review of that form.

Q: Which form was taxable? Signed Advance Request Voucher No. VST004 6826LL.

Q: What amount was the tax based on? The new balance shown on the voucher.

Citations and references

• Fla. Stat. § 201.08(1) — documentary stamp tax on written obligations
• Fla. Admin. Code r. 12B-4.052(6) — taxable written promise to pay
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B4-017

Original ruling text

Jul 20, 1993

Re: Technical Assistance Advisement No. 93(B)4-017
Documentary Stamp Tax; Open-End Loan Forms
XXX (hereinafter Lender)

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 Lender in making loans
to its 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 form No. AST113 6826LL; and
2. LOANLINER Credit Agreement No. BFL214 6826LL with
   attached LOANLINER Addendum No. MST103 6826LL; and
3. LOANLINER Advance Request Voucher No. VST004 6826LL;
   and
4. LOANLINER Advance Request Voucher and Security
   Agreement No. VFL062 LL676; and
5. Notice of Lien No. HSMV 82139 (Rev. 7/90)S; and
6. Notice to Cosigner No. CMlG 7-157-000-2 (5-85) FTC;
   and
7. Guaranty Agreement No. CMlG 7-655 (12-82).

Background

LOANLINER Application No. AST113 6826LL, which is signed by
the borrower, establishes the borrowers creditworthiness and
ability to repay any amount borrowed.

LOANLINER Credit Agreement BFL214 6826LL, which is signed
by the borrower, outlines the plan and provides that the
borrower promises to pay to Lender all money borrowed under the
plan and applicable charges described in the Addendum together
with interest on what is owed until the total amount borrowed
has been paid. The attached Addendum BFL214 6826LL, also shows
the current daily periodic interest rates and the corresponding
annual percentage rates relative to the type of loan[s]
negotiated between Lender and borrower.

LOANLINER Advance Request Voucher No. VST004 6826LL, which
is signed by the borrower, shows under "Payment Terms" the
amount of loan request and previous loan balances that equal the
"New Balance". This voucher reads in part that:

"By signing below you agree to make payments of the amount
and at the time shown in the payment terms section
above...."

LOANLINER Advance Request Voucher and Security Agreement
No. VFL062 LL676, which is signed by the borrower, shows the
amount of loan requested and describes in detail the security
offered by the borrower to secure the loan.

Notice of Lien No. HSMV 82139 (Rev. 7/90)S, signed by
Lender and borrower, is a form furnished by the Florida
Department of Highway Safety and Motor Vehicles for the purpose
of placing liens on motor vehicles.

Notice to Cosigner No. CMlG 7-157-000-2 (5-85) FTC, which
is signed by a person other than the borrower, puts that person
on notice that if the borrower defaults on the loan the cosigner
will have the responsibility to make payments on the loan until
the loan is paid in full.

Guaranty Agreement No. CMlG 7-655 (12-82), which is signed
by one or more persons who guarantee that upon default of the
borrower to make loan payments they will, upon demand of
Lenders, pay any remaining payments.

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) a sum
certain in money (c) which is signed by the borrower. Also see
Florida Administrative Code Rule 12B-4.052(6).

Department's Position

The only form meeting all the essential requirements for
taxing purposes is LOANLINER Advance Request Voucher No. VST004
6826LL. This form is subject to tax based upon the amount shown
as the "New Balance".

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
Tax Law Specialist
Technical Assistance

WEW/mh