Did two out-of-state partnerships and their corporate general partner have Florida intangible-tax situs when their Florida-resident owner made investment decisions?

Plain-English summary

The two out-of-state partnerships and their corporate general partner had no taxable situs in Florida under the facts presented.

Although a Florida-resident individual made investment decisions as an officer of the corporation, the corporation and partnerships carried out those decisions and their other operations at their offices outside Florida.

The resident individual still had to file an intangible-tax return and report his stock in the corporation. The individuals' limited-partnership interests were exempt because the partnerships were not registered with the Securities and Exchange Commission.

What this means for you

The ruling distinguished the entities' own situs from the Florida resident's separately owned property. Where entity operations occurred determined the entities' result, while Florida residence required the individual to report taxable intangible property such as corporate stock.

Common questions

Q: Did making investment decisions from Florida create Florida situs for the entities?
A: No, because the corporation and partnerships carried out those decisions and all other operations at their out-of-state offices.

Q: Did the Florida resident have a filing obligation?
A: Yes. Individual A had to report his stock in the corporation.

Q: Were the limited-partnership interests taxable?
A: No. The ruling said limited interests in partnerships not registered with the SEC were exempt.

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 95C2-022

Original ruling text

Jul 25, 1995

Re: Technical Assistance Advisement 95(C)2-022
Intangible Tax; Taxable Situs
XXX (Individual A)
XXX (Individual B)
XXX (Partnership A)
XXX (Partnership B)
XXX (Corporation)

Dear :

Your letter requesting technical advice on the taxability
of non-Florida partnerships, 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 is the
sole shareholder of Corporation. Individual A and several
trusts, for the benefit of Individual A's family members,
established Partnership A in a state other than Florida.
Individual A, Individual B and Corporation formed
Partnership B in a state other than Florida. Corporation
is the sole general partner of Partnership A and B.
Corporation was incorporated in a state other than Florida.
Individuals A & B and the trusts are limited partners. The
individual limited partners are both residents of Florida.
Partnerships A and B maintain office space in the state of
their creation where they receive mail and maintain their
books and records. Copies of their mail may be sent to
Individual A. Individual A, as an officer of Corporation,
will make decisions for Partnership. These decisions will
be effected by agents of the Partnerships outside of
Florida. All other operations of Corporation and the
Partnerships will be accomplished at each entity's office
outside Florida.

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

1.) Neither Partnership A or B nor Corporation is
commercially domiciled on Florida, and, therefore
neither Partnership A or B 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 interests in the Partnerships owned by
Individual A, Individual B and the trust are exempt
from Intangible Personal Property Tax.

Based upon the information provided, Corporation and the
Partnerships 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 Partnerships, 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 the Individuals' interest in the Partnerships 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 the 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