Which parts of a Florida mortgage refinancing were subject to documentary stamp tax and nonrecurring intangible tax when the loan was assigned and increased?

Plain-English summary

The refinancing was taxed only to the extent of the additional advance.

The current lender's assignment of the existing note and mortgage to the purchasing new lender was not subject to documentary stamp tax. No additional nonrecurring intangible tax was due on the assigned note because that tax had already been paid.

The renewal note was not subject to additional documentary stamp tax because it did not exceed the unpaid principal balance. The consolidated note and the modification and restatement of mortgage also produced no additional documentary stamp tax.

Documentary stamp tax and nonrecurring intangible tax were due on the amount of the additional advance. The intangible tax became payable when the modified and restated mortgage was recorded. Neither the renewal note nor the consolidated note drew additional nonrecurring intangible tax.

What this means for you

The Department distinguished existing, previously taxed debt from new principal. The result depended on the renewal not exceeding the outstanding balance and on the new advance being separately identified and taxed.

Common questions

Q: Was the assignment from the current lender to the new lender taxed? A: No. The new lender purchased the note and mortgage and became the holder, and the existing note's nonrecurring tax had already been paid.

Q: Was the renewal note taxed?
A: No additional documentary stamp tax was due because it did not exceed unpaid principal, and no additional nonrecurring intangible tax was due.

Q: What part of the transaction was taxed? A: The additional advance, for both documentary stamp tax and nonrecurring intangible tax.

Q: Did consolidating and restating the instruments create another tax? A: No additional tax was due on the consolidated note or the modified-and-restated mortgage beyond the tax on the additional advance.

Citations and references

• Fla. Stat. § 201.08 — documentary stamp tax on notes and mortgages
• Fla. Stat. § 199.145 — nonrecurring intangible tax
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95M-006

Original ruling text

Jul 25, 1995

Re: Technical Assistance Advisement No. 95(M)-006 Documentary Stamp Tax and Intangible Tax; Assignment of Note and Mortgage; Consolidated Note & Restated Mortgage XXX (Taxpayer)

XXX (Current Lender)
XXX (New Lender)

Dear:

This is in response to your recent request for a technical

assistance advisement.

Issue

Whether the assignment of an existing promissory note and mortgage to New Lender, and the execution of a consolidated note and restated mortgage in favor of New Lender is subject to documentary stamp tax under s. 201.08, F.S., or intangible tax

under s. 199.145, F.S.

Facts

The Taxpayer executed a promissory note and mortgage in favor of the Current Lender. Taxpayer paid the documentary stamp tax on the face value of the existing mortgage upon recording. Further, the nonrecurring intangible tax was paid at the time of recording. The New Lender has agreed (i) to purchase the existing note and mortgage from the Current Lender, (ii) to make an additional advance to Taxpayer under the terms of the existing mortgage, to increase the unpaid principal balance of the loan and (iii) to modify the interest rate and maturity date of the loan. The Taxpayer will execute a renewal note for the outstanding principal balance of the existing note. Taxpayer will also execute an additional advance note and pay the appropriate documentary stamp tax for this advance. A

consolidation note will be executed to consolidate the renewal

note and the additional advance note. The consolidation note is exempt from documentary stamp tax and nonrecurring intangible tax. Taxpayer will also execute a modification and restatement of mortgage that will modify and restate the existing mortgage for the purpose of confirming the identity of the New Lender, confirming that the mortgage secures the consolidated note, and confirming the terms of the existing mortgage to those standard

terms typically used by the New Lender in its mortgage loans.

Requested Rulings and Responses

Ruling Request: Documentary stamp tax will not be due on

the Current Lender's assignment of the existing note and

mortgage to the New Lender.
Response: The assignment of the mortgage by the Current Lender to the New Lender who has purchased the note and

mortgage and becomes the new holder is not subject to tax.

Ruling Request: Intangible personal property tax will not

be due upon the Current Lender's assignment of the existing

note and mortgage to the New Lender.
Response: No additional nonrecurring intangible tax is due on an assignment by the Current Lender of a note, to the

New Lender, upon which the tax was previously paid.

Ruling Request: Documentary stamp tax will be due on the

amount of the additional advance note upon recording of the modification and restatement of mortgage. No additional documentary stamp tax will be due with respect to the renewal note, consolidated note, or modification and

restatement of mortgage.

Response: Documentary stamp tax is due on the amount of the additional advance note. The renewal note is not subject

to tax since it is not renewed for more than the unpaid

principal balance. No additional stamp tax is due on the consolidated note or the modification and restatement of

mortgage.

Ruling Request: The nonrecurring intangible tax will not be

due upon the execution or delivery of the renewal note or consolidated note. Nonrecurring intangible tax is due based solely on the amount of the additional advance note, and payable upon the execution, delivery and recording of

the modification and restatement of mortgage.

Response: Nonrecurring intangible tax is due on the amount of the additional advance note, payable upon recording of the modified and restated mortgage. Neither the renewal note nor the consolidated note is subject to any additional

nonrecurring 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,
Nadine C. Posey
Senior Tax Specialist

Technical Assistance

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