Under Florida's 1996 intangible tax, were the grantor or sole out-of-state trustee liable for an irrevocable trust?

Plain-English summary

Florida found no 1996 intangible-tax liability for either the grantor or the trust's sole out-of-state trustee.

The trust was irrevocable. Its out-of-state trustee could distribute income and principal considered advisable for the grantor's well-being, while the grantor retained only a limited power of appointment. The trust also restricted who could serve as trustee and allowed investment professionals without giving them management or control of the intangible property.

The Department tied Florida trust situs to trustee domicile and concluded that neither the trustee nor the grantor was liable on the stated arrangement.

What this means for you

• The ruling treated the sole trustee's out-of-state domicile as central to trust situs.
• The grantor's appointment power was limited rather than general.
• Investment or custodial help did not replace the trustee's management and control under the stated terms.

Common questions

Q: Was the out-of-state trustee liable for Florida intangible tax? A: No.

Q: Was the grantor liable?
A: No.

Q: Was the trust revocable?
A: No.

Citations and references

• Fla. Stat. § 199.032 — annual intangible tax
• Fla. Stat. § 199.052(5) — trust situs and trustee filing duty
• Fla. Stat. § 199.175 — 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 96C2-039

Original ruling text

Apr 01, 1996

Re: Technical Assistance Advisement No: 96(C)2-039 Intangible Personal Property 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 the Facts

On XXX, the Grantor established an irrevocable trust (“the Trust"). The Grantor's XXX, who resides outside the state of Florida, was appointed as sole Trustee. The Trust provides

that:

1) The agreement and the Trust are irrevocable.

2) Trustee issues Grantor income, including principal deemed advisable for Grantor's well being.

3) Grantor retains a limited power of appointment.

4) Upon Grantor's death Trustee distributes remaining Trust to acting Trustee of Grantor's Revocable Trust or Personal Representative of the estate.

5) XXX months after actual receipt date of assets by the Trustee, the Trustee shall distribute particular assets to acting Trustee of the Revocable Trust.

6) Until death of Grantor, assets initially listed in Trust are to be retained.

7) Trustee can not reside in XXX.

8) Trustee may employ investment counsel, custodians and brokers in XXX, but such persons may never be granted management of control over the intangible property in

the Trust.

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.) 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 on the stated scenario, neither the Trustee nor the

Grantor would be liable for Florida Intangible Tax on the Trust.

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