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