Under Florida's 1996 intangible tax, was a trust taxable when all management and control stayed with an out-of-state trustee?

Plain-English summary

Florida found no intangible-tax liability for a trust whose trustee and management were outside Florida.

The trustee had no residence or business in Florida, and the trust document required management and control to remain with out-of-state trustees. The grantor could not invade the trust corpus and could revoke the trust only with the unanimous written consent of the acting trustees.

The Department explained that a trust acquired Florida taxable situs if its trustee was domiciled in Florida. Because that was not true here, the trust was not subject to the tax.

What this means for you

• Trustee domicile was the ruling's decisive situs fact.
• The trust document placed management and control outside Florida.
• The grantor's restricted access and revocation power supported the stated structure.

Common questions

Q: Was the trust subject to Florida intangible tax?
A: No.

Q: Why not?
A: Its trustee was outside Florida and held the trust's management and control.

Q: Could the grantor freely revoke the trust?
A: No. Revocation required unanimous written consent from the acting trustees.

Citations and references

• Fla. Stat. § 199.032 — annual intangible tax
• Fla. Stat. § 199.052(1), (5) — management and trust situs
• Fla. Stat. § 199.175 — Florida taxable situs
• Fla. Admin. Code r. 12C-2.006(3) — trust situs
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96C2-019

Original ruling text

Feb 29, 1996

Re: Technical Assistance Advisement No. 96(C)2-019
Intangible Tax - Trust
XXX (Grantor); XXX (Trustee); XXX (Trust)

Dear :

Your letter requesting a Technical Assistance Advisement
has been referred to this office for response. The specific
scenario for which advice has been requested is summarized
below.

Statement of Facts

On December 27, 1995, the Grantor established the Trust. A
resident of XXX, was named as Trustee. The Trustee has no
residence or business within the State of Florida. The Trust
provides that management and control of the Trust shall at all
times be vested in an out of state trustee(s). No provision is
made for the Grantor to invade the corpus of the Trust, nor can
the Grantor revoke the Trust, except with the unanimous written
consent of the then acting Trustee(s).

Provisions of the Law

Section 199.032, F.S., imposes an annual tax of 2 mills on
all intangible property that is owned, managed or controlled by
a person domiciled or having a taxable situs in Florida. (See
ss. 199.052 and 199.175, F.S.) Section 199.052(1), F.S., also
provides that management or control does not include any
ministerial function or processing activity. A trust will have
a taxable situs in Florida if the Trustee is domiciled in this
State. (See s. 199.052(5), F.S., and Rule 12C-2.006(3), F.A.C.

Conclusion

Based upon statutory provisions and the information
furnished in your letter, the Trust would not be subject to the

intangible tax in Florida.

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,

Celestine Grantham
Senior Tax Specialist
Tax Policy and Dispute Resolution
Office of General Counsel

CG/mh