Had the proper Florida documentary stamp tax been paid on the consolidated note, mortgage, and related loan documents?

Subject

Mortgage Modification and Consolidation Agreement

Plain-English summary

The Department found that the appropriate documentary stamp tax had been paid on the loan documents. The documents included a replacement note consolidating two earlier notes and a consolidated mortgage replacing the earlier mortgages.

The restated assignment of leases, rents, and profits did not require separate documentary stamp tax because it merely supplied additional collateral for the replacement note on which the proper tax had already been paid. The issue arose after the borrower raised allegedly unpaid documentary stamp tax as a defense in a mortgage-foreclosure action.

What this means for you

The ruling was a document-specific determination, not a blanket rule for every refinancing or consolidation. The Department reviewed the submitted instruments and their recorded tax treatment before concluding that no additional tax was due on the described collateral assignment.

Common questions

Was additional tax due on the restated assignment of rents? No. It secured the replacement note as additional collateral, and proper tax had already been paid on that note.

Did the Department agree that the loan documents were under-stamped? No. It concluded that the appropriate documentary stamp tax had been paid.

Does the ruling decide the foreclosure case? No. It addresses only the Florida documentary stamp tax question presented.

Citations and references

• Fla. Stat. §§ 201.08(1) and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94B4-011

Original ruling text

Aug 10, 1994

Re: Technical Assistance Advisement No. 94(B)4-011
Documentary Stamp Tax Properly Affixed to Loan Documents
Section 201.08, Florida Statutes
XXX (Partnership)
XXX (Obligors)
XXX (Successor Bank)
XXX (Bank)
XXX (Loan Documents)

Dear :

Your recent request for a technical assistance advisement
has been received in this office.

Facts

On October 11, 1990, Partnership, as mortgagor, and the
Obligors, executed that certain Combined Replacement Note
(Replacement Note) in favor of Successor Bank, which
consolidated and replaced the Parcel I Note and the Parcel II
Note.

On October 11, 1990, Partnership, as mortgagor, and the
obligors, executed that certain Note and Mortgage Modification
Assumption and Consolidation Agreement (Consolidated Mortgage)
in favor of Successor Bank, to secure their obligations under
the Replacement Note and replace the Parcel I Mortgage and the
Parcel II Mortgage. Pursuant to the terms of the Consolidated
Mortgage, the Mortgagors assumed liability for the two Notes and
Mortgages. As indicated on the Consolidated Mortgage,
documentary stamp tax was paid thereon.

On October 11, 1990, the Mortgagor executed, in favor of
Successor Bank, that certain Restated Collateral Assignment of
Leases, Rents and Profits (Restated Assignment of Rents) to
secure its obligation under the Replacement Note. Documentary
stamp tax was not due on the Restated Assignment of Rents as it

served as additional collateral for the Replacement Note on
which proper documentary stamp tax was paid.

On December 21, 1993, Bank, the holder of these certain
Loan Documents, has brought an action to foreclose a mortgage on
real property located in a Florida county and to enforce a
promissory note. The borrower/mortgagor has asserted, as an
affirmative defense to the foreclosure action, that proper
documentary stamp tax was not paid on the relevant notes,
mortgages and other documents.

Discussion and Law

Section 201.08(1), F.S., provides that documentary stamp
tax is due on promissory notes, nonnegotiable notes, written
obligations to pay money, or assignments of salaries, wages, or
other compensation made, executed, delivered, sold, transferred,
or assigned in the state. The tax is also due on mortgages,
trust deeds, security agreements or other evidences of
indebtedness filed or recorded in this state. Documents
submitted for review show that documentary stamp tax was paid.

Requested Ruling

That proper documentary stamp tax was paid on the Loan
Documents.

Department's Position

Based upon statutory provisions and the information
provided in your request, the appropriate documentary stamp tax
was paid on the Loan Documents.

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
Tax Audit Specialist III
Technical Assistance

NCP/mh