Under the original, now-superseded ruling, did an out-of-state lender's unsigned, unrecorded unilateral loan-extension notice create Florida documentary stamp tax?

Plain-English summary

This ruling has been superseded by revised TAA 96B4-014R and should be treated as historical only. The original 1996 advisement concluded that a unilateral loan-extension notice executed outside Florida did not create documentary stamp tax when the Florida borrower did not sign or return it, the notice was not recorded, and no connected document was made, executed, delivered, transferred, signed, or recorded in Florida.

The original result also assumed that proper documentary stamp tax had been paid on the original documents or that a later renewal qualified under section 201.09. Merely mailing the lender's out-of-state notice to the Florida borrower did not establish the Florida nexus described by the Department.

The result changed if the borrower signed the notification or agreement to acknowledge the extension or modification and returned it to the lender. The original ruling said that act established Florida nexus and made the loan documents subject to documentary stamp tax.

What this means for you

Lenders and loan servicers

Do not use this original ruling as current authority. Its source expressly identifies a later revised ruling, TAA 96B4-014R.

Documentation teams

The historical analysis turned on where documents were executed, delivered, signed, or recorded and whether the borrower took an affirmative signature-and-return step.

Accountants and tax professionals

Confirm the revised ruling and current statute before advising on a maturity extension. The original source's superseded status is more important than its favorable historical conclusion.

Common questions

Q: Is TAA 96B4-014 still the controlling ruling? A: No. The official source says it was superseded by TAA 96B4-014R on April 7, 1997.

Q: What did the original ruling say about an unsigned notice mailed from outside Florida? A: It said the notice alone did not create tax when nothing connected with it created Florida nexus and it was not recorded.

Q: Did mailing the notice to a Florida borrower create nexus by itself? A: No under the original ruling's facts.

Q: What if the Florida borrower signed and returned the extension? A: The original ruling said that established nexus and made the loan documents taxable.

Q: Did prior payment on the original loan documents matter? A: Yes. The no-tax conclusion assumed proper tax had been paid on the originals or a later renewal was exempt under section 201.09.

Q: Should a lender rely on this page for a current extension? A: No. Review revised TAA 96B4-014R and current Florida law.

Citations and references

• Fla. Stat. § 201.08 — documentary stamp tax on written obligations and renewals
• Fla. Stat. § 201.09 — renewal exemption referenced in the original ruling
• TAA 96B4-014R — revised ruling identified by the official source as superseding this advisement
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96B4-014

Original ruling text

Status: Superseded by TAA 96(B)4-014R (Revised) issued April 7, 1997

Nov 13, 1996

Re: Technical Assistance Advisement No. 96(B)4-014 Documentary Stamp Tax: Notification of Extension of Loan Maturity Unilateral renewal notifications made out of state Section 201.08, F.S. XXX (Lender)

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. 201.08, F.S., is due upon documents which Lender intends to use to extend the term of loans and make other modifications to loan documents.

Facts

Loan documents may consist of one or more promissory notes, a loan agreement, a security agreement or mortgage (or similar document evidencing the security interest, if any, granted to Lender) and any other documents evidencing the loan and the borrower's relationship with Lender (collectively, the "loan documents"). A UCC-1 financing statement will be filed (in the case of secured loans) with the Secretary of State of Florida and all mortgages will be recorded.

Proper documentary stamp tax will have been paid on the promissory notes evidencing loans closed in Florida and will have been paid on the mortgages securing those loans which are mortgage loans. No documentary stamp tax will have been paid on non-mortgage loans closed outside of Florida.

Proposed Transaction

As the loans mature, Lender will extend the term of the

loan or negotiate other modifications to the loan documents. Lender proposes to unilaterally execute and send a "Notification of Extension of Loan Maturity" with mailing verification.

The borrower will not execute the Extension nor return these documents to Lender and no Extension or memorandum thereof will be recorded in the public records.

Requested Ruling

Will the unilateral execution by Lender of the Notification of Extension of Loan Maturity and subsequent mailing of the Notification to the borrower in Florida constitute a "renewal" and potentially subject the loan to tax pursuant to s. 201.08, F.S., if neither the Extension nor memorandum thereof will be recorded in the public records?

Department's Position

A document and renewals must be "made, executed, delivered, sold, transferred, or assigned" in Florida or signed or recorded in Florida to establish nexus for the imposition of documentary stamp taxes under s. 201.08, F.S. If no nexus is established with the State of Florida, the foreign document cannot be taxed by Florida.

Where proper documentary stamp taxes have been paid on the original documents, or subsequent renewals exempted under s. 201.09, F.S., the unilateral extension notifications (from outside the State with no nexus established to Florida) in and of themselves would not render the loans subject to tax under s. 201.08, F.S.

If a unilateral document is executed wherein the borrower is merely notified that the loan is extended or modified and no other document connected with this unilateral document is made, executed, delivered, sold, transferred, assigned, signed or recorded within the State of Florida, no documentary stamp tax is imposed.

However, if the Florida borrower signs the notification

letter or agreement acknowledging that borrower agrees with the modifications or extensions and returns that document to Lender, nexus would be established. Documentary stamp tax would apply to the loan documents.

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 treatment different from that 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,

M.E. Clemens, C.P.A.
Senior Tax Specialist
Tax Policy and Dispute Resolution
Office of General Counsel

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