Which of the lender's nine open-end loan forms triggered Florida documentary stamp tax?

Subject

Taxation of Various Open-End Loan Forms

Plain-English summary

Only one of the nine submitted LoanLiner forms was subject to Florida documentary stamp tax: the Subsequent Action Form, when its Extension Agreement was exercised. The tax was measured by the unpaid balance entered on that form.

The other eight forms, as submitted, did not contain all three elements the Department required under section 201.08: a written promise to pay, a sum certain in money, and the borrower's signature, either within the form or through referenced documents.

What this means for you

The ruling evaluated the precise 1994 forms listed in the request. A later form edition, completed addendum, incorporated agreement, extension, or other document could add the elements that were missing here.

Common questions

Were all nine open-end loan forms taxable? No. Only the Subsequent Action Form became taxable when the Extension Agreement was exercised.

How was tax measured on that form? By the amount entered as the unpaid balance.

Why were the other forms not taxable? They did not contain all three required elements of a taxable written obligation.

Citations and references

• Fla. Stat. §§ 201.08(1) and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94B4-014

Original ruling text

Sep 15, 1994

Re: Technical Assistance Advisement No. 94(B)4-014
Documentary Stamp Tax; Taxation of Various Open-End Loan
Forms
XXX (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 certain 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. AST114 6826LL);
2. LoanLiner Credit Agreement (Form No. BFL215 6826LL);
3. LoanLiner Credit Agreement and Insurance Certificate
   (Form No. BFL215 6826LL);
4. LoanLiner Addendum (No Form Number);
5. LoanLiner Advance Request Voucher and Security
   Agreement (Form No. VFL064 6826LL);
6. LoanLiner Guaranty Agreement (Form No. GST012 6826LL);
7. Note to Cosigner (Form No. MST022);
8. LoanLiner Subsequent Action Form (Form No. MST053
   6826LL);
9. LoanLiner Adverse Action Form (Form No. MST074
   6826LL).

Requested Advisement

Whether or not the listed forms are subject to Florida

Documentary Stamp tax under s. 201.08(1), F.S.

Discussion and Law

Relevant to your petition, s. 201.08(1), F.S., provides
that for a written obligation to pay money that is made,
executed, delivered, sold, transferred, or assigned in the
state, and for each renewal of the same, the tax shall be 35
cents on each $100 or fraction thereof of the indebtedness or
obligation evidenced thereby.

In order to be subject to documentary stamp tax under s.
201.08, F.S., a written obligation to pay money must have the
following three elements within the four corners of the document
or must reference other documents containing these elements:

l. A written promise to pay;

2. A sum certain in money; and
3. The signature of the borrower.

Department's Position

Only LoanLiner Subsequent Action Form No. MST053 6826LL,
(Form No. 8) is subject to tax if the "Extension Agreement" is
exercised. The tax would be based upon the amount entered in the
"unpaid balance" portion of the form. None of the other forms
submitted contain all three elements required under s. 201.08,
F.S. Therefore, these forms as presented are not subject to tax.

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,

Baldan E. Sulker
Tax Audit Specialist III
Technical Assistance

BES/mh