Ezel / Tax Rulings / FL
FL TAA 96C2-059 Intangible Personal Property Tax 1996-05-22

Was an interest-bearing cash account held with a broker subject to Florida intangible personal property tax?

Short answer: No. Florida treated the described interest-bearing brokerage cash account like cash deposited with a bank because it was not organized as a mutual fund or money-market fund. The ruling warned that fund treatment could differ depending on whether a fund was organized as a corporation or business trust.

Apply this to your situation

This page answers the general question as of 1996. Ezel answers yours, under current Florida tax law, with citations.

Currency note: this ruling is from 1996
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Technical Assistance Advisement of the Florida Department of Revenue, issued to a requester under section 213.22, Florida Statutes, on the facts and circumstances described in the request. The advisement's standard closing states that it binds the Department only under those facts and circumstances and that later statutory or administrative-rule changes or judicial interpretations may produce a different result. Identifying details may be redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Florida tax professional about your specific facts.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Florida concluded that the interest-bearing cash account held with a broker was not subject to intangible personal property tax.

The Department verified that the account was simply interest-bearing cash rather than a mutual fund or money-market fund. It therefore treated the account like cash deposited with a bank.

The ruling distinguished actual funds. It said a mutual or money-market fund organized as a corporation would have been fully taxable as of January 1, while a fund organized as a business trust would have received an exemption for the portion of net asset value attributable to U.S. government debt obligations.

What this means for you

  • The account's legal and investment structure mattered more than the fact that a broker held it.
  • A cash balance was treated differently from an ownership interest in a mutual or money-market fund.
  • The ruling's fund discussion shows that entity form and portfolio composition could change the result.

Common questions

Q: Was the brokerage cash account taxable?
A: No.

Q: Why was it exempt?
A: It was an interest-bearing cash account, not a mutual or money-market fund, and the Department treated it like a bank cash deposit.

Q: Would every money-market fund have received the same result?
A: No. The ruling said the treatment depended on whether the fund was organized as a corporation or a business trust.

Citations and references

  • Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

Original ruling text

May 22, 1996

Re: Technical Assistance Advisement No. 96(C)2-059
Intangible Tax/ Cash Account Held With Broker

Dear :

This is in response to your request for a Technical
Assistance Advisement certifying that your Cash Account held
with your broker is exempt from Intangible Tax.

Your correspondence of March 5, 1996, provided a copy of
your XXX for the period January 1 through January 31, 1996. As
of January 1, 1996, the opening Cash Balance in your account was
$XX.

Through verification with XXX in the XXX Office, I was
informed that the XXX you hold is simply an interest bearing
account which is not subject to Intangible Tax, like cash on
deposit with a bank. The XXX is not organized as a Mutual or
Money Market Fund. However, if such account were a Mutual or
Money Market Fund, the tax consequences for Intangible Tax could
change considerably depending on whether the fund was organized
as a corporation or a business trust. If a Mutual or Money
Market Fund is organized as a corporation, the entire fund as of
January 1 of each year is subject to Intangible Tax. If the
fund is organized as a Business Trust, the portion of its net
asset value which is equal to the portion of the portfolio
containing U.S. government debt obligations is exempt from
Intangible 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,

Joy B. Eldred, C.P.A.
Tax Law Specialist
Tax Policy and Dispute
Resolution

JBE/mh

Get today's answer for your situation

You just read a 1996 ruling on this question. Ezel checks current Florida tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.