Did an out-of-state husband and his Florida-domiciled wife each have to file Florida intangible personal property tax returns for their separately held portfolios?

Subject

Filing Requirement and Taxable Situs

Plain-English summary

The Florida-domiciled wife had to file an annual intangible personal property tax return, while her out-of-state husband generally did not if the stated conditions were satisfied. The couple held separate portfolios, and the request said the wife had no authority over the husband's assets.

The wife had declared Florida homestead, spent most of her time in Florida, intended Florida to be her permanent domicile, and had already filed a 1996 return for her own assets. Because she was domiciled in Florida, all intangible property she owned, managed, or controlled had Florida taxable situs. Her return also had to include any property in her husband's portfolio that she actually managed or controlled.

The husband retained his domicile in another state even though he worked for a Florida business and expected to spend as much as 60-70% of his time in Florida during the remaining employment contract. His separately owned portfolio generally lacked Florida taxable situs if its assets were not derived from, did not arise from, and were not issued in connection with business transacted in Florida.

His no-filing result was conditional. He could still have a filing obligation if his portfolio contained Florida-business-situs property or if he managed or controlled intangible property owned by a Florida-domiciled person. His own portfolio also could become reportable if a Florida domiciliary, including his wife, actually managed or controlled it.

The Department expressly declined to decide whether either spouse legally owned an interest in the other's stated assets or who actually exercised management and control. It warned that management and control could exist regardless of written statements or agreements.

What this means for you

Under the statutes applied in this 1997 ruling, spouses could have different Florida intangible-tax filing obligations because domicile, ownership, business situs, and actual management or control were analyzed person by person.

Keeping assets in one spouse's name was not necessarily conclusive. The Department looked beyond stated ownership arrangements and left factual control unresolved.

Common questions

Q: Did spending most of the year in Florida automatically make the husband a Florida domiciliary? No. On the stated facts, the Department did not presently consider him domiciled in Florida despite substantial time and employment activity there.

Q: What made the wife's portfolio taxable in Florida? Her Florida domicile gave intangible property she owned, managed, or controlled taxable situs in the state.

Q: Could the wife owe tax on assets titled only to her husband? Yes, if she actually managed or controlled those assets. The Department did not determine whether she did.

Q: Could the husband avoid filing solely because he lived in another state? No. The ruling also required that his portfolio lack Florida business situs and that he not manage or control property owned by a Florida domiciliary.

Citations and references

• Fla. Stat. § 199.303(2) — legislative intent to tax all intangible property Florida could constitutionally tax
• Fla. Stat. § 199.032 — annual intangible personal property tax
• Fla. Stat. § 199.175(1)-(2) — taxable situs based on domicile or Florida business activity
• Fla. Stat. § 199.052(1) — annual return filing requirement for persons owning, managing, or controlling Florida-situs intangible property
• Fla. Admin. Code ch. 12-11; Fla. Stat. § 213.22 — Technical Assistance Advisement procedure and authority

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97C2-001

Original ruling text

May 08, 1997

Re: Technical Assistance Advisement No. 97(C)2-001
Intangible Tax; Filing Requirement and Taxable Situs;
ss. 199.052, 199.175, F.S.
XX (Party A)
XX (Party B)

Dear :

This is in response to your letter dated March 7, 1997,
requesting a Technical Assistance Advisement regarding the
applicability of Intangible Tax pursuant to ss. 199.052 and
199.175, F.S. This request is made pursuant to Chapter 12-11,
F.A.C., and is issued to you under the authority of s. 213.22,
F.S.

Statement of Facts

The following is the description of the transactions as
outlined in your letter:

Your clients, Party A and Party B, are husband and wife.
Party A has been domiciled in a state other than Florida
("State X") for his entire life. Prior to their marriage,
Party B was domiciled in Florida and subsequent to their
marriage, she moved out of Florida and became a legal
resident of State X. The couple lived in State X for a
number of years and in 1991 they purchased a condominium in
a city in Florida where they spent three to four weeks a
year. In 1994 they purchased a home in another city in
Florida and sold the condominium. During 1995, Party B
lived in both State X and Florida and commuted frequently
between both states. In October of 1995, Party B decided
to become a Florida resident and the house was transferred
to her name. On January 1, 1996, Party B declared Florida
homestead and became a Florida resident. Furthermore:

Party B spends the majority of her time in Florida and

intends Florida to be her permanent state of domicile. She
has a portfolio of assets, and has filed an intangible
personal property tax return for 1996 and has paid the
applicable tax on her assets. This return was not a joint
return and did not reflect the assets of Party A.

Party A has no intention of relinquishing his domicile in
State X. Party A is a corporate officer of several
businesses in State X, and is also an officer of one
business which has its commercial domicile in Florida. He
is in the third year of a five year employee contract with
the Florida entity.

Prior to 1995, Party A spent greater than 50% of his time
in State X and traveled into Florida to perform services
for the Florida entity. In 1995, an executive of the
Florida entity resigned and Party A was required to take on
additional responsibilities until a replacement was
identified. This resulted in his spending 40-50% of his
time in State X during 1995 and 1996. It is anticipated
that the time he spends in Florida may fluctuate up to 6070% until the end of his employment contract, at which time
it is expected to drop significantly.

Party A maintains a home in State X. In addition, he
maintains the following in State X: driver's license, voter
registration, car tags and club memberships. He files a
personal income tax return in State X as a resident/
domiciliary.

Party A owns a vacation home in a city in Florida, but
spends little to no time at this location.

Party A has a portfolio of assets. These assets are solely
in his name, and Party B has no authority to control,
manage or make any decisions related to these assets.

Requested Advisement

Based on the foregoing information, an advisement is
requested regarding the following issues:

1. Is Party A required to file a Florida Intangible
Personal Property Tax return?

2. Are the intangible assets of Party A's portfolio
   required to be reported on an annual intangible tax
   return?
3. Is Party B required to file a Florida Intangible
   Personal Property Tax return?
4. Are the intangible assets of Party B's portfolio
   required to be reported on an annual intangible tax
   return?

Response

Party A is married to Party B. The Department makes no
determination as a matter of law as to whether Party A has any
ownership interest in assets stated in the request for
advisement to be owned by Party B, nor whether Party B has any
ownership interest in assets stated in the request for
advisement to be owned by Party A.

Party A's portfolio refers to intangible personal property
owned by A. Party B's portfolio refers to intangible personal
property owned by B.

Section 199.303(2), Florida Statutes, declares the specific
legislative intent to tax all intangible personal property that
may constitutionally be taxed. Section 199.032, F.S., imposes
tax on all intangible personal property that has a taxable situs
in this state.

In response to Question Number 1, Party A is not presently
considered to be domiciled in Florida. Generally, his portfolio
has no taxable situs in Florida under Section 199.75(1), F.S.
To the extent that those assets were not derived from, did not
arise out of, and were not issued in connection with, business
transacted in this state, they have no taxable situs in Florida
under Section 199.175(2), F.S. Party B is domiciled in Florida.
Thus Party B's portfolio has taxable situs in Florida.

Section 199.052(1), F.S, requires every person, regardless

of domicile, who owns, manages, or controls intangible personal
property which has a taxable situs in this state, to file an
annual intangible tax return. Thus, if Party A's portfolio
contains no intangible personal property that was derived from,
arose out of, or was issued in connection with business
transacted in this state, and if Party A does not manage or
control any intangible personal property that is owned by a
person domiciled in Florida, Party A is not required to file a
Florida Intangible Personal Property Tax Return.

In response to Question Number 2, refer to the discussion
above. Party A's portfolio is not required to be reported on an
annual intangible tax return if it contains no intangible
personal property that was derived from, arose out of, or was
issued in connection with business transacted in this state, and
if no person domiciled in Florida, including Party B, has any
management or control of any assets in the portfolio.
Management and control of assets might be exercised without
regard to statements or agreements. Thus, no determination is
made in this advisement as to which persons in fact have or
exercise management and control of specific items of intangible
personal property.

In response to Question Number 3 and Question Number 4,
Party B has established residence in Florida. Party B is
domiciled in Florida. Thus all intangible personal property
that is owned, managed, or controlled by Party B has taxable
situs under Section 199.175(1), F.S, and is subject to the
annual intangible personal property tax imposed by Section
199.032, F.S. Party B is required to file annual intangible tax
returns. Party B is required to report and is liable for tax on
all intangible personal property in Party B's portfolio, and on
all other intangible personal property, including any in Party
A's portfolio, which Party B manages or controls. Again, no
determination is made in this advisement as to which persons in
fact have or exercise management and control of specific items
of intangible personal property.

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
Technical Assistance and Dispute Resolution
Office of General Counsel

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