Which of five credit-union line-of-credit forms were subject to Florida documentary stamp tax?

Subject

Credit Union Loans

Plain-English summary

The signed Line of Credit Advance Request Voucher was subject to documentary stamp tax because it contained the borrower's promise to pay. The Department said the tax applied to the promise itself; certainty of the payment terms was not material, but the maker or obligor had to sign the obligation.

Four other submitted forms were not taxable because they contained no promise to pay a sum certain: the Advance Request Voucher and Security Agreement, LoanLiner Addendum, LoanLiner Credit Agreement and Insurance Certificate, and LoanLiner Application and Credit Agreement.

What this means for you

The form's title did not decide the tax result. The Department examined whether the signed document itself contained a promise to pay money.

Common questions

Q: Was the signed Line of Credit Advance Request Voucher taxable? Yes.

Q: Were all credit agreements taxable? No. The other four reviewed forms lacked a promise to pay a sum certain.

Q: Did an unsigned obligation trigger tax? The ruling said an obligation must be signed by the maker or obligor to be taxable.

Citations and references

• Fla. Stat. § 201.08(1) — written obligations to pay money
• Fla. Admin. Code r. 12B-4.052(6) — tax on the promise to pay
• Plymouth Citrus Growers Ass'n v. Lee, 27 So. 2d 415 (Fla. 1946)
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B4-021

Original ruling text

Nov 15, 1993

Re: Technical Assistance Advisement No. 93(B)4-021
Documentary Stamp Tax - Taxation of Various Forms
Section 201.08(1), F.S.
Florida Administrative Code Rule 12B-4.052(6)
XXX (Lender)

Dear :

Your recent request for a technical assistance advisement
has been forwarded to this office for a reply.

Facts

Lender desires to utilize the following open-ended forms to
extend credit to its members (borrowers): Line of Credit Advance
Request Voucher (VST004 6826LL); Advance Request Voucher and
Security Agreement (VFL064 6826LL); LoanLiner Addendum (MST103
6826LL); LoanLiner Credit Agreement and Insurance Certificate
(BFL224 6826LL); LoanLiner Application and Credit Agreement
(BFL224 6826LL).

Requested Advisement

Whether or not the referenced forms are subject to Florida
documentary stamp tax.

Discussion and Law

Section 201.08(1), F.S., provides that for promissory
notes, nonnegotiable notes, or written obligations to pay money,
executed, delivered, sold, transferred, or assigned in the
state, and for each renewal of the same, the tax is 35 cents on
each $100 or fraction thereof of the indebtedness or obligation
evidenced thereby.

Florida Administrative Code Rule 12B-4.052(6) states that
the tax levied by s. 201.08(1), F.S., is an excise tax on the

promise to pay and the terms and certainty of payment are not
material. (Plymouth Citrus Growers Ass'n v. Lee, 27 So.2d 415
(Fla. 1946))

Further, an obligation must be signed by the maker or
obligor to be taxable.

Conclusion

Based upon the statutory provisions and the forms submitted
for review, the Line of Credit Advance Request Voucher (VST004
6826LL) when signed by the borrower is a promise to pay and,
therefore, subject to the documentary stamp tax imposed under s.
201.08, F.S. The Advance Request Voucher and Security Agreement
(VFL064 6826LL); LoanLiner Addendum (MST103 6826LL); LoanLiner
Credit Agreement and Insurance Certificate (BFL224 6826LL) and
LoanLiner Application and Credit Agreement (BFL224 6826LL) are
not taxable forms since these forms contain no promises to pay a
sum certain.

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,

Nadine C. Posey
Technical Assistant
Technical Assistance

NCP/mh