Did additional documentary stamp or nonrecurring intangible tax apply when already-taxed timeshare notes and mortgages secured percentage-based warehouse advances?

Subject

Mortgage Wholesale Warehouse Agreement

Plain-English summary

This February 23, 1994 ruling was superseded by revised TAA 94M-004R on March 30, 1994. Its original conclusion should therefore be read only as historical, superseded guidance.

The ruling had found no further documentary stamp or nonrecurring intangible tax on assignment of consumer timeshare notes and mortgages whose applicable taxes had already been paid. Depending on payment history, those receivables secured warehouse advances equal to 75% or 80% of their remaining principal balance.

What this means for you

The original result depended on a wholesale warehouse arrangement and collateral obligations already bearing the proper taxes. The source itself marks this version superseded.

Common questions

What collateral secured the advance? Consumer timeshare notes and recorded mortgages assigned to the lender.

How large were the described advances? 80% after at least three monthly payments or 75% after at least one.

Is this the final version of the Department's guidance? No. The official text identifies a later revised ruling.

Citations and references

• Fla. Stat. §§ 199.133, 199.145(2), 201.08, 201.21, and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94M-004

Original ruling text

Status: Superseded by TAA 94(M)-004R, issued March 30, 1994

Feb 23, 1994

Re: Technical Assistance Advisement No. 94(M)-004
Documentary Stamp Tax, Ch. 201, F.S. and
Intangible Personal Property Tax, Ch. 199, F.S.
on Receivable Loan Secured by Collateral Assignment
of Notes and Mortgages on Which Taxes Have Been Paid
XXX (Borrower)
XXX (Lender)

Dear :

This is in response to your recent request for a technical
assistance advisement.

Facts

The Borrower has entered into a Loan and Security Agreement
with Lender, which Agreement provides for up to a certain
specified amount in receivable financing (Receivable Loan),
evidenced by a secured promissory note (Borrower's Note) and
payable in periodic advances.

Borrower sells timeshare intervals in the Resort to
consumer purchasers. Each consumer purchaser in a financed
transaction executes a Note in favor of Borrower for the
purchase price of the time share interval. Each such Note is
secured by a Mortgage in favor of Borrower in respect to the
timeshare interval being purchased. The Mortgage securing the
Note is recorded with the Clerk of Circuit Court in appropriate
County in Florida, at which time all documentary stamp tax
payable pursuant to s. 201.08, F.S., and all nonrecurring
intangible tax payable pursuant to s. 199.133, F.S., are paid in
respect to the Note and Mortgage.

Upon completion of the consumer transaction, Borrower
requests an advance under the Receivable Loan, which advance is

secured by the pledge and collateral assignment of the Note and
Mortgage executed by the consumer purchaser to the Borrower.
Each such advance under the Receivable Loan/Secured Promissory
Note is equal to eighty percent (80%) of the remaining principal
balance of the pledged Note Receivable if at least three (3)
monthly payments have been made or seventy-five percent (75%) of
the remaining principal balance of the pledged Note Receivable
if at least one (1) monthly payment has been made.

Requested Ruling

Under the above described circumstances, no additional
documentary stamp tax or nonrecurring intangible tax shall be
due upon the advancement of funds under the Receivable Loan and
pursuant to the Borrower's Note evidencing the Receivable Loan.

Discussion and Law

Section 201.21, F.S., provides that there shall be exempt
from all excise taxes imposed by this chapter all promissory
notes, nonnegotiable notes, and other written obligations to pay
money (principal obligations), when the maker thereof shall
pledge or deposit with the payee or holder thereof pursuant to
any agreement commonly known as a wholesale warehouse mortgage
agreement, as collateral security for the payment thereof,
provided all taxes imposed by this chapter upon or in respect to
such collateral obligation or obligations have been paid.

Section 199.133, F.S., states that a one-time nonrecurring
intangible tax shall apply to a note, bond, or other obligation
for payment of money only to the extent it is secured by
mortgage, deed of trust, or other lien upon real property
located in this state. No additional nonrecurring tax shall be
due upon the assignment of a note and mortgage on which the
nonrecurring tax has been paid in accordance with s. 199.145(2),
F.S.

Conclusion

Based upon statutory provisions and the information
provided in your letter, the assignment of a note and mortgage

on which the appropriate taxes have been paid, would be exempt
from further taxation under ss. 201.21 and 199.145(2), F.S.

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