Were five open-end loan forms used by a Florida lender subject to documentary stamp tax?

Plain-English summary

None of the five submitted open-end loan forms was subject to Florida documentary stamp tax as presented. The Department said a taxable written obligation under section 201.08 had to contain, within the document or referenced documents, three elements: a written promise to pay, a sum certain in money, and the borrower's signature.

The reviewed forms were a LoanLiner advance-request voucher and security agreement, a LoanLiner credit agreement and insurance certificate, a pre-approved auto-loan draft, an express security agreement, and a cash-disbursement draft. None contained all three elements, so the Department found them untaxed on the submitted facts.

What this means for you

The result turned on the actual language and signatures in these specific forms. A similar-looking loan document can be taxable if its own terms, or documents it brings into the analysis, supply all three required elements.

Common questions

Q: Were any of the five reviewed forms taxable? A: No, not as presented to the Department.

Q: What elements did the Department require? A: A written promise to pay, a sum certain in money, and the borrower's signature.

Q: Does this clear every open-end loan document? A: No. The ruling was limited to the five submitted forms and their contents.

Citations and references

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

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96B4-002

Original ruling text

Jan 23, 1996

Re: Technical Assistance Advisement No. 96(B)4-002 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.

Issue

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 Advance Request Voucher and Security
   Agreement (Form No. VFL065 6826LL);
2. Loanliner Credit Agreement and Insurance Certificate
   (Form No. BFL215 6826LL);
3. Pre-Approved Auto Loan Draft with instructions (No
   Form Number);
4. Express Security Agreement (No Form Number);
5. Cash Disbursement Draft (No Form Number).

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
$100 or fraction thereof of the indebtedness or obligation evidence thereby.

In order to be taxable 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 reference other documents containing these elements:

l. A written promise to pay;

2. A sum certain in money; and
3. The signature of the borrower.

Department's Position

None of the forms submitted for our review 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 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

BES/mh