Did notarized acknowledgments and delivery affidavits prove that a Florida lender's promissory notes were executed and delivered outside Florida?

Subject

Out of State Loans

Plain-English summary

The lender's notarized note acknowledgment and affidavits of delivery were sufficient evidence that the promissory notes were executed and delivered outside Florida. The notes therefore were not subject to Florida documentary stamp tax, even though they were later returned to and held in Florida.

The described loans were not secured by Florida mortgages. Other loan documents were prepared and largely executed in Florida, but only the promissory note contained the promise to repay money. The borrower signed that note before an out-of-state notary, and a lender officer or agent accepted delivery outside Florida under a notarized affidavit.

A Florida UCC-1 filing was not taxable by itself unless the promissory note, security agreement, or another obligatory document was also filed or recorded. The UCC filing still needed a notation stating whether tax had been paid or was not due.

This December 1994 advisement was expressly superseded by revised TAA 94B4-022R issued March 22, 1995.

What this means for you

The Department required evidence of both out-of-state signing and out-of-state delivery. Later custody in Florida did not undo those facts, but this page reports a superseded ruling and should not be used without reviewing the revision and current law.

Common questions

Were the notes taxable when they returned to Florida? No, under this original ruling, because execution and delivery had occurred outside Florida.

What documentation did the Department accept? An out-of-state notarized acknowledgment on the note plus notarized lender or agent affidavits showing acceptance of delivery outside Florida.

Was filing the UCC-1 taxable? Not by itself, provided no note, security agreement, or other obligatory document was filed with it.

Is this ruling still the operative version? No. The official PDF says it was superseded by revised TAA 94B4-022R in 1995.

Citations and references

• Fla. Stat. §§ 201.08(1), 201.22, and 213.22
• Fla. Admin. Code rr. 12B-4.053(35) and 12B-4.054(30)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94B4-022

Original ruling text

Status: Superseded by TAA 94B4022R (Revised) issued March 22, 1995

Dec 15, 1994

Re: Technical Assistance Advisement No. 94(B)4-022 Documentary Stamp Tax; Out of State Loans XXX hereinafter be referred to individually as the "Lender"

Dear :

You have petitioned for a Technical Assistance Advisement pursuant to Section 213.22, Florida Statutes, and Chapter 12-11, Florida Administrative Code.

ISSUE

Whether the Lender's form acknowledgment which is incorporated within promissory notes and form affidavits of delivery which were approved by Technical Assistance Advisements Numbers 93(B)4-024, 93(B)4-024 Revised and 93(B)4-024 RevisedRevised still constitute sufficient evidence of out-of-state delivery to render a transaction exempt from Florida documentary stamp tax pursuant to newly adopted Rule 12B-4.053(35), Florida Administrative Code.

STATEMENT OF FACTS

The Lender follows certain procedures in transactions involving promissory notes, nonnegotiable notes, and written obligations to pay money made, executed, and delivered in another state and not secured by a Florida mortgage. These procedures are explained in a Request for Technical Assistance Advisement, dated October 11, 1993, as more fully set forth in Exhibit "A" attached hereto and made a part hereof. This Request was amended and supplemented by a Request for Technical Assistance Advisement, dated November 4, 1993, set forth in Exhibit "B" attached hereto and made a part hereof. The amended and supplemented request contained the Lender's form

acknowledgment which is incorporated within promissory notes, and several form affidavits of delivery. On December 8, 1993, the Department issued Technical Assistance Advisement Number 93(B)4-024 set forth in Exhibit "C" attached hereto and made a part hereof.

The Lender requested clarification of said Technical Assistance Advisement on February 8, 1994, set forth in Exhibit "D" attached hereto and made a part hereof, and the Department responded by issuing Technical Assistance Advisement Number 93(B)4-024 Revised as set forth in Exhibit "E" attached hereto and made a part hereof. On March 29, 1994, the Lender requested that said Technical Assistance Advisement be revised as set forth in Exhibit "F" attached hereto and made a part hereof, and the Department responded with Technical Assistance Advisement Number 93(B)4-024 Revised-Revised, as set forth in Exhibit "G" attached hereto and made a part hereof. Rule 12B-4.053(35), Florida Administrative Code, was adopted after the last revision of Technical Assistance Advisement Number 93(B)4-024.

Application for a loan is made by the borrower in the State of Florida. The loan documents consist of one or more promissory notes, a loan agreement, a security agreement (or similar document evidencing the security interest, if any, granted to Lender) and any other documents evidencing the Loan and the borrower's relationship with Lender (collectively, the "Loan Documents"). A UCC-1 financing statement will be filed (in the case of secured Loans) with the Secretary of State of Florida. All Loan Documents are prepared in the State of Florida and, except in the case of the promissory notes, will be executed and delivered by the borrower to Lender in the State of Florida. No Loan Document other than the promissory note contains a promise to repay money. The promissory note will be executed outside the State of Florida in the presence of a notary public. The promissory note which contains a written promise to pay a sum certain in money and is signed by the borrower also has an attached acknowledgment that is properly notarized by an out of state notary.

LAW AND ANALYSIS

Section 201.08(1), Florida Statutes, "imposes a documentary stamp tax 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...." Newly adopted Rule 12B-4.053(35), Florida Administrative Code, provides that the Department will presume that if a note is made payable to a Florida lender and the note is held by the Florida lender in Florida, then tax will be due unless the lender can establish that the note was made, executed, and delivered to the lender outside the state. Proof sufficient to establish that a note is not subject to tax may include:

(a) A sworn affidavit made before an out of state notary public at the time of the signing of the note by the borrower(s) and delivery of the note to the lender attesting that the signing and delivery of the note occurred in the presence of the out of state notary; or (b) The note itself could bear a notarization and acknowledgment as to where the note was executed. Then this could be supplemented by an affidavit made before an out of state notary by the lender attesting that the note was delivered to the lender, or its agent out of state; or (c) Any other proof that the borrower made, executed, and delivered the note in another state to a Florida lender.

The acknowledgment which is incorporated within the promissory note in Exhibit "B" will be notarized by a notary public of the state in which the promissory note will be executed by or on behalf of the borrower. This demonstrates that execution of the promissory note has not occurred within the State of Florida. Further, the affidavits of delivery in Exhibit "B" executed by the loan officer or agent of the Lender incorporate an acknowledgment which will be notarized by a notary public of the state in which delivery of the promissory note is accepted on behalf of the Lender. This demonstrates that delivery has not occurred within the State of Florida. Since Lender is able to provide sufficient evidence that the promissory note is neither executed nor delivered in the State of Florida, no documentary stamp tax should be imposed with respect to the promissory note pursuant to Rule 12B-4.053(35),

Florida Administrative Code.

A Department regulation provides that the filing or recording of a UCC Financing Statement in Florida is not subject to documentary stamp tax under Section 201.08, Florida Statutes, unless the promissory note, security agreement or other obligatory document is included for filing or recording (Florida Administrative Code Rule 12B-4.054(30)). The financing statement must include a notation that the documentary stamp tax has been paid or that it is not due (Section 201.22, Florida Statutes; Florida Administrative Code Rule 12B-4.054(30)).

Department's Position

The Lender's form acknowledgment which is incorporated within promissory notes and form affidavits of delivery constitute sufficient evidence of out-of-state delivery to render a transaction exempt from Florida documentary stamp tax pursuant to newly adopted Rule 12B-4.053(35), Florida Administrative Code. The promissory notes in the transactions described are not subject to documentary stamp tax as they are signed by the borrower out of Florida and delivered to Lender's loan officer or its agent out of Florida although the notes are subsequently returned to Florida.

This response constitutes a Technical Assistance Advisement under Section 213.22, Florida Statutes, which is binding on the Department only under the facts and circumstances described in the request for this advice as specified in Section 213.22, Florida Statutes. 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, Florida Statutes, which are subject to disclosure to the public under the conditions of Section 213.22, Florida Statutes. 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,

James E. Silvey
Tax Law Specialist
Technical Assistance

JES/jes