Which of eight LoanLiner open-end credit forms was subject to Florida documentary stamp tax?

Plain-English summary

Only one of the eight submitted LoanLiner forms was taxable: the Subsequent Action Form, and only when its Extension Agreement was exercised. The tax base was the unpaid balance entered on that form.

The Department said a written obligation needed a promise to pay, a sum certain, and the borrower's signature within the document or in incorporated documents. The other seven application, agreement, addendum, advance, cosigner, and guaranty forms did not contain or incorporate all three elements as presented.

What this means for you

The ruling evaluated each form's operative language, not the loan program as a whole. An extension form could become taxable when used even though related application and credit forms were not independently taxable.

Common questions

Q: Were all eight forms taxable?
A: No. Seven lacked at least one required element.

Q: Which form was taxable?
A: LoanLiner Subsequent Action Form No. MST053 6826LL, when its Extension Agreement was exercised.

Q: What amount was taxed?
A: The unpaid balance entered on the Subsequent Action Form.

Q: What elements did the Department look for?
A: A written promise to pay, a sum certain, and the borrower's signature, either in the document or incorporated papers.

Citations and references

• Fla. Stat. § 201.08(1) — documentary stamp tax on written obligations and renewals
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95B4-014

Original ruling text

Dec 14, 1995

Re: Technical Assistance Advisement No. 95(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.

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. AST112 LL676);
2. LoanLiner Application and Credit Agreement (Form No.
   BFL225 6826LL);
3. LoanLiner Addendum (Form No. MST102 LL676);
4. Addendum to LoanLiner Credit Agreement and Truth-inLending Disclosure (No Form Number);
5. LoanLiner Advance Request Voucher and Security
   Agreement (Form No. VFL065 6826LL);
6. Notice to Cosignor (Form No. MST022);
7. LoanLiner Guaranty Agreement (Form No. GST012 6826LL);
8. LoanLiner Subsequent Action Form (Form No. MST053
   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 incorporate by 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 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 Ch. 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

BES/mh