Did an out-of-state partnership and corporate general partner have to file Florida intangible-tax returns when a Florida resident made their investment decisions?

Plain-English summary

The out-of-state partnership and corporate general partner did not have to file Florida intangible-tax returns under the facts presented.

Although one Florida resident made investment decisions as an officer of the corporate general partner, agents carried out those decisions outside Florida and all entity operations occurred at the entities' out-of-state offices. The Department found no Florida taxable situs for the partnership or corporation.

The Florida resident still had to file and report his stock in the corporation. The two residents' limited-partnership interests were exempt because the partnership was not registered with the SEC.

What this means for you

The ruling separated entity situs from the resident owner's own filing obligation. Out-of-state entity operations supported the entities' result, but Florida residence still required reporting taxable property owned personally.

Common questions

Q: Did the Florida-based investment decisions create entity situs?
A: No, because the decisions and other operations were carried out at the entities' out-of-state offices.

Q: Did the resident shareholder have to file?
A: Yes. Individual A had to report his stock in the corporation.

Q: Were the limited-partnership interests taxable?
A: No. The partnership was not registered with the SEC.

Citations and references

• Fla. Stat. § 199.052 — resident intangible-property return
• Fla. Stat. § 199.042 — payment with return
• Fla. Stat. § 199.185(1)(c) — limited-partnership-interest exemption
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95C2-020

Original ruling text

Jul 12, 1995

Re: Technical Assistance Advisement 95(C)2-020
Intangible Tax; Filing Florida Intangible
Personal Property Tax Returns
XXX (Individual A)
XXX (Individual B)
XXX (Partnership)
XXX (Corporation)

Dear :

Your letter requesting technical advice on the taxability
of a non-Florida partnership, having its principal place of
business in the state of its creation, has been received and
examined by this office.

The information presented for consideration is restated as
follows:

Individual A established Corporation. Individual A,
Individual B and Corporation formed Partnership in a state
other than Florida. Corporation is the sole general
partner of Partnership. Corporation was incorporated in a
state other than Florida. Individuals A & B are limited
partners. The limited partners are both residents of
Florida. Partnership maintains an office in the state of
its creation where it receives mail and maintains its books
and records. Partnership will send copies of its mail to
Individual A, including brokerage account information.
Individual A, as an officer of Corporation, will make
investment decisions for Partnership. These investment
decisions will be effected by agents of Partnership outside
of Florida. All other operations of Corporation and
Partnership will be accomplished at each entity's office
outside Florida.

Based upon the information above the three rulings have
been requested:

1.) Neither Partnership nor Corporation is commercially
domiciled in Florida, and, therefore neither
Partnership nor Corporation will be required to file a
Florida Intangible Personal Property Tax Return.
2.) Individual A will be required to report the value of
his stock in Corporation on his Intangible Personal
Property Tax Return.
3.) The partnership interest in Partnership owned by
Individual A and Individual B are exempt from
Intangible Personal Property Tax.

Based upon the information provided Corporation and
Partnership have no taxable situs in Florida. Even though
Individual A makes decisions about investments as the officer of
Corporation, which in turn makes investments as the general
partner of Partnership, the action of Corporation and
Partnership is carried out at the principal place of business
for these entities.

Section 199.052, F.S., requires that every resident of this
state that owns intangible property shall file a return and list
all taxable intangible property owned by the resident. The
payment of tax must accompany the return when filed. (See s.
199.042, F.S.) Individual A, a resident of Florida, must file
an intangible tax return and list all taxable intangible
property owned by him, including the stock of Corporation.

As for Individual A's interest in Partnership, there is no
intangible tax due on this interest. Only an interest as a
limited partner in a limited partnership, registered with the
Securities and Exchange Commission (SEC), is subject to tax.
Limited partnership interests in limited partnerships not
registered with the SEC are exempt from the intangible tax.
(See s. 199.185(1)(c), F.S.)

In summary, Corporation and Partnership are not subject to
the intangible tax. Individual A will be required to report the
stock he owns of Corporation. His investment, as well as
Individuals B's interest in Partnership is not subject to the
intangible 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,

J.V. Parramore, Jr.
Tax Law Specialist
Technical Assistance

JVP/mh