Was Florida documentary stamp tax due when articles of merger were recorded to show an LLC's succession to Florida real estate without a deed?

Plain-English summary

No Florida documentary stamp tax was due when the articles of merger were recorded to show the surviving LLC's succession to the partnership's Florida real estate. The California general partnership planned to merge into a California limited liability company, and the property would pass by operation of the applicable merger statute without a deed.

Florida's rules treated a statutory-merger transfer to a surviving corporation, partnership, LLC, or other entity as nontaxable unless a deed was given. If the parties used a deed, the consideration would be presumed to equal the fair market value of the transferred real-property interest.

What this means for you

The ruling distinguished a transfer occurring automatically under a merger statute from a conveyance by deed. Recording merger evidence did not itself trigger tax on these facts, but adding a deed would change the analysis.

Common questions

Q: Was tax due on recording the articles of merger? A: No, because the property passed by operation of the merger statute and no deed was given.

Q: Did it matter that the property was in Florida? A: The ruling specifically addressed the partnership's Florida real property and still found no tax under the statutory-merger rule.

Q: What if the parties also gave a deed? A: The rules treated the deed as taxable and presumed consideration equal to the property's 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) and 12B-4.014(8) — statutory mergers
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96B4-001

Original ruling text

Jan 17, 1996

Re: Technical Assistance Advisement No. 96(B)4-001 Documentary Stamp Tax/Statutory Merger; Recordation of Articles of Merger Taxpayer: XXX (California General Partnership)

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., is due upon the recordation of the Articles of Merger demonstrating the surviving California limited liability company's succession to the Taxpayer's real property located in Florida.

Proposed Transaction

Taxpayer owns real property situated in the State of Florida. Taxpayer, a California general partnership, plans to merge into a California limited liability company. The Articles of Merger will be recorded in the public records in a Florida county. No deed will be given.

Requested Ruling

Under these circumstances, are documentary stamp taxes due upon the recording of the Articles of Merger demonstrating the surviving California limited liability company's succession to the Taxpayer's real property located in Florida?

Department's Position

Section 201.02 of the Florida Statutes 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, it is the current position of the Department that no documentary stamp tax is due in connection with the transfer of real property pursuant to a statutory merger if the real property is transferred by operation of an applicable merger statute 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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