Did Florida documentary stamp tax apply when an out-of-state statutory merger transferred Florida real property to the surviving nonprofit by operation of law without a deed?

Plain-English summary

No Florida documentary stamp tax was due when the Florida real property passed to the surviving nonprofit corporation by operation of the merger statutes and no deed was given.

A California nonprofit owned the property and was to merge into a Massachusetts nonprofit, which would survive. Title transferred automatically under the two states' merger laws. The disappearing corporation would not execute a deed; a certified copy of the articles of merger would be filed in the Florida county only to evidence the transfer.

The Department drew a bright line from the quoted rules: an operation-of-law transfer in a statutory merger was not taxable unless a deed was given. If a deed were used, consideration was presumed to equal the fair market value of the transferred property interest.

What this means for you

The ruling distinguished a statutory vesting of title from a deed conveyance. Filing merger articles to show the new owner did not itself turn the transfer into a taxable deed on the facts described.

Common questions

Q: Was the merger transfer taxable? A: No. Title passed by operation of law and no deed was given.

Q: Did filing the articles of merger create tax? A: No under the described transaction; the filing evidenced the operation-of-law transfer.

Q: What if the disappearing corporation gave the survivor a deed? A: The quoted rule treated that as taxable and presumed consideration equal to fair market value.

Citations and references

• Fla. Stat. § 201.02 — documentary stamp tax on real-property conveyances
• Fla. Admin. Code rr. 12B-4.013(31), 12B-4.014(8) — statutory mergers
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95B4-013

Original ruling text

Dec 14, 1995

Re: Technical Assistance Advisement No. 95(B)4-013 Documentary Stamp Tax/Statutory Merger XXX (Massachusetts Non-Profit Corporation) XXX (California Non-Profit Corporation)

Dear :

This is in response to your recent request for a Technical Assistance Advisement in which you ask if the Florida documentary stamp tax imposed by s. 201.02, F.S., applies to the transfer of certain Florida real property from California NonProfit Corporation to Massachusetts Non-Profit Corporation pursuant to an out-of-state statutory merger.

Proposed Transaction

California Non-Profit Corporation owns certain real property situated in the State of Florida to which it took title in 1990 by a deed recorded in the official records of the county in which the property is located. California Non-Profit Corporation and Massachusetts Non-Profit Corporation will merge pursuant to a statutory merger under Cal. Admin. Code Tit. I, Sections 5110-6910 and Massachusetts G.L. c. 180, Section 10A. Massachusetts Non-Profit Corporation will be the surviving corporation of the merger.

As part of the merger, title to the real property will be transferred from California Non-Profit Corporation to Massachusetts Non-Profit Corporation by operation of law, that is, by operation of the California and Massachusetts statutes applicable to the merger. California Non-Profit Corporation will not execute a deed to the real property to Massachusetts Non-Profit Corporation in connection with the merger. A certified copy of the Articles of Merger will be filed in the Florida county in which the real property is located for purposes of evidencing the transfer of the real property to Massachusetts Non-Profit Corporation.

Requested Ruling

Whether Florida documentary stamp tax is due on the transfer of title to the real property by California Non-Profit Corporation to Massachusetts Non-Profit Corporation as part of the above-described statutory merger.

Department's Position

Section 201.02 of the F.S., imposes a documentary stamp tax "on deeds, instruments, or writings whereby any lands, tenements, or other real property, or any interest therein, shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or any other person by his direction." The tax due is 70 cents on each $100 of the consideration therefor.

Rules 12B-4.013(31) and 12B-4.014(8), F.A.C., which became effective on February 13, 1991, each provide as follows:

"Statutory Merger: The transfer of real property to a surviving corporation, partnership, limited liability company or other business entity resulting from the operation of an applicable statute governing the merger or consolidation of such business entities is not taxable unless a deed is given, in which case the consideration is presumed to be equal to the fair market value of the real property interest being transferred. Cross Reference Rules 12B-4.013(7) and 12B-4.014(8), F.A.C."

Based on the foregoing authority, documentary stamp tax is not due in connection with the transfer of real property pursuant to a statutory merger unless a deed is given. If a deed is given, it is presumed that the consideration is equal to the fair market value of the real property interest being transferred.

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
Senior Tax Specialist
Tax Policy and Dispute Resolution
Office of General Counsel

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