Which of a lender's ten open-end credit forms was subject to Florida documentary stamp tax?

Subject

Taxation of Various Open-End Loan Forms

Plain-English summary

Of the ten open-end credit forms submitted, only the Xpress Guarantor's Agreement was subject to documentary stamp tax when signed by the co-maker. The tax was based on the principal amount shown on that agreement.

The ruling said a document was taxable under section 201.08 only if it contained, within its own four corners or through referenced documents, all three elements: a written promise to pay, a sum certain in money, and the borrower's signature. The other nine forms, as presented, did not contain all three.

What this means for you

The document's title was not decisive. Florida looked at whether the executed document, together with anything it incorporated, actually evidenced a signed promise to pay a definite amount. Changing a form or linking it to another document could change the analysis.

Common questions

Was every signed loan-related form taxable? No. The ruling required all three stated elements, not merely a signature.

Which form was taxable? Form No. 7, the Xpress Guarantor's Agreement, when signed by the co-maker.

How was the tax base determined? From the principal amount shown on the guarantor agreement.

Citations and references

• Fla. Stat. §§ 201.08(1) and 213.22
• Fla. Admin. Code r. 12-11.003

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94B4-016

Original ruling text

Nov 09, 1994

Re: Technical Assistance Advisement No. 94(B)4-016 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. Xpress Credit Application (4 pages);
2. Xpress Credit Application (1 page);
3. Xpress Permanent Loan Agreement and Initial Disclosure
   Statement;
4. Addendum to Truth-in-Lending Disclosure Statement &
   Agreement for Open-End Credit Plan;
5. Xpress Loan Advance Application;
6. Xpress Security Agreement;
7. Xpress Guarantor's Agreement;
8. Xpress Loan Change Agreement;
9. Xpress Termination of Joint Borrower;
10. Xpress Change-in-Terms.

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:

1. A written promise to pay;
2. A sum certain in money; and
3. The signature of the borrower.

Department's Position

Only Xpress Guarantor's Agreement form (Form No. 7) is subject to tax when signed by the co-maker. The tax would be based upon the principal amount as shown on the agreement. 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