Ezel / Tax Rulings / FL
FL TAA 93C2-028 Intangible Personal Property Tax 1993-10-06

Were post-confirmation advances under a revolving loan created by a confirmed Chapter 11 plan subject to Florida's nonrecurring intangible tax?

Short answer: No. Each advance ordinarily would have been taxable because the revolving loan was secured by Florida real property, but the Department found the advances exempt for as long as the loan remained outstanding because the loan was made under and in accordance with a confirmed Chapter 11 reorganization plan.

Apply this to your situation

This page answers the general question as of 1993. Ezel answers yours, under current Florida tax law, with citations.

Currency note: this ruling is from 1993
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This historical 1993 Florida Technical Assistance Advisement was a second supplement to TAA 92M-003 and addressed daily advances under an amended revolving loan made pursuant to a confirmed Chapter 11 plan and secured by Florida and out-of-state real and personal property. Under section 213.22, it binds the Department only for those facts. Plan confirmation, loan origin, amendment, advance timing, outstanding status, collateral, mortgage recording, bankruptcy law, tax year, or later law could change the result.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Subject

Property Subject to Tax -Revolving Line of Credit

Plain-English summary

Advances under the revolving loan were exempt from Florida's nonrecurring intangible tax for as long as the loan remained outstanding. Each day's advance was treated as a separate loan, and the credit line was secured partly by Florida real property.

Section 199.143(1) ordinarily taxed each advance under a revolving line secured by a Florida mortgage. The Department nevertheless applied the federal bankruptcy-plan exemption because this loan was made pursuant to and in accordance with the company's confirmed Chapter 11 reorganization plan.

What this means for you

The exemption was not a general rule for revolving credit. It depended on the particular loan's origin in the confirmed bankruptcy plan and continued only while that loan remained outstanding.

Common questions

Q: Did the Florida real-property security ordinarily make each advance taxable? Yes.

Q: Why were the advances exempt here? The loan was made under a confirmed Chapter 11 plan.

Q: How long did the stated exemption continue? For as long as the loan remained outstanding.

Citations and references

  • 11 U.S.C. §§ 1129 and 1146(c) — confirmed plans and stamp-tax exemption
  • Fla. Stat. § 199.143(1) — nonrecurring intangible tax on revolving-credit advances
  • Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

Original ruling text

Oct 06, 1993

Re: Technical Assistance Advisement No. 93(C)2-028
Nonrecurring Intangible Tax - Property Subject to Tax Revolving Line of Credit
Section 199.143(1), Florida Statutes
XXX (Company)
XXX (Lender)

Dear :

Your request for a second supplemental technical assistance
advisement, supplementing TAA 92(M)-003 and the supplemental TAA
request, has been received in this office.

Background

Pursuant to the provisions of the Company Debtor's First
Amended Consolidated Plan of Reorganization, as modified (the
Plan), the Company and the other Debtors were reorganized
pursuant to the Plan. The Plan was confirmed by order of the
Court. As part of the reorganization, the Company and the
various other Debtors and related subsidiaries entered into an
Amended and Restated Loan Agreement (Loan) with Lender, amending
and restating the original loan agreement and increasing the
lending limit.

The Company will make draws on the Loan to pay its debts,
purchase inventory, and operate its business. Pursuant to the
terms of the Loan and the Loan Documents, each day's advance
represents a separate Loan to the Company.

Security for the Loan consists of real property and
tangible and intangible personal property located within and
outside of the State of Florida.

Issue

Whether the Company is required to pay nonrecurring tax

under Chapter 199, Florida Statutes, on advances under the Loan
made after the date of confirmation of the Plan.

Discussion and Law

Under the provision of Chapter 11, Section 1146(c), United
States Code, the issuance, transfer, exchange of a security, or
the making or delivery of an instrument of transfer under a plan
confirmed under Chapter 11, Section 1129, United States Code,
may not be taxed under any law imposing a stamp tax or similar
tax. A security under Chapter 11, United States Code, is
defined to include a note, bond or debenture.

Section 199.143(1), F.S., provides that revolving lines of
credit which are secured by a mortgage on Florida real property
are subject to the nonrecurring intangible tax on each advance
made.

Department's Position

The advances under the Loan are exempt from the
nonrecurring tax and will continue to be exempt for so long as
the Loan is outstanding since the Loan was made pursuant to and
in accordance with a confirmed plan of reorganization under
Section 1129 of the United States Code.

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

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