Did Florida deed tax apply when Florida partnerships merged into non-Florida limited partnerships without deeds?

Plain-English summary

Florida documentary stamp tax did not apply when the mergers vested Florida property by operation of non-Florida law without deeds. The surviving entities were non-Florida limited partnerships.

The ruling assumed the merging entities held fee-simple record title and that the governing documents selected non-Florida law. Merger status alone was not enough; the governing law had to require no deed.

Common questions

Q: Were deeds required on the approved facts? No.

Q: Did record ownership matter? Yes. The Department assumed fee-simple record title.

Citations and references

• Fla. Stat. § 201.02(1) — deed documentary stamp tax
• Fla. Stat. §§ 620.201(2), 620.8905, 620.8906 — partnership mergers
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99B4-010

Original ruling text

SUMMARY

Question: Is the documentary stamp tax imposed on deeds by
s. 201.02, F.S., due upon the mergers of the Florida
general partnerships into a non-Florida limited
partnership, or upon the merger of another Florida limited
partnership into a non-Florida limited partnership, where,
in each case, the non-Florida entity is the entity that
survives the merger?

Answer - Based on Facts Below: The mergers of the Florida
general partnerships into a non-Florida limited
partnership, or upon the merger of another Florida limited
partnership into a non-Florida limited partnership, where,
in each case, the non-Florida entity is the entity that
survives the merger are not taxable for purposes of the
documentary stamp tax imposed by s. 201.01, F.S. if the
laws of the jurisdiction which govern the surviving
entities do not require deeds to transfer title to the real
property owned by the merged entities.

Jul 29, 1999

Re: Technical Assistance Advisement No. 99(B)4-010
Documentary Stamp Tax/Mergers of General Partnerships
ss. 201.02 and 620.8905, F.S.
XXX (GP I)
XXX (GP II)
XXX (LP)
XXX (Newco I)
XXX (Newco II)

Dear :

This is in response to your recent request for a Technical
Assistance Advisement in which you ask if the Florida
documentary stamp taxes imposed by s. 201.02, F.S., are due on a
deed upon the mergers of a Florida General Partnership into a

XXX Limited Partnership.

Proposed Transaction

GP I, GP II and LP own real property located in the State
of Florida. GP I and GP II, each a Florida General Partnership,
are to be merged into a XXX Limited Partnership (Newco I), with
Newco I being the surviving entity. LP, a Florida Limited
Partnership, is to be merged into another XXX Limited
Partnership (Newco II), with Newco II being the surviving
entity.

Requested Ruling

Is the documentary stamp tax imposed on deeds by s. 201.02,
F.S., due upon the mergers of the Florida general
partnerships into a XXX limited partnership, or upon the
merger of another Florida limited partnership into a XXX
limited partnership, where, in each case, the XXX entity is
the entity that survives the merger?

Discussion and Law

The tax levied by s. 201.02(1), F.S., is an excise tax on
deeds, instruments, or writings that transfer any interest in
real property. The tax is 70 cents for each $100 of
consideration. Consideration includes, but is not limited to,
money paid or to be paid, the discharge of an obligation, and
the amount of any mortgage, purchase money mortgage, or other
encumbrance. If the consideration is other than money, the
consideration is presumed to be equal to the fair market value
of the real property being transferred.

Sections 620.201(2), 620.8905 and 620.8906, F.S., which
permit the merger of Florida general partnerships and Florida
limited partnerships, do not specifically address which
jurisdiction's laws will govern the vesting of title in the
surviving entity when an out-of-state entity is involved in the
merger. Section 620.8905, F.S., states that pursuant to a plan
of merger, a partnership may be merged with one or more
partnerships or limited partnerships. According to s.

620.8906(1)(b), F.S., title to all real property owned by each
of the merged partnerships or limited partnerships must be
transferred by deed to the surviving entity.

Department's Position

Based on the foregoing authorities and the facts presented,
it is the current position of the Department that the mergers of
GP I and GP II with and into Newco I, and the merger of LP with
and into Newco II, are not taxable for purposes of the Florida
documentary stamp tax if the laws of the jurisdiction which
govern the surviving entities do not require deeds to transfer
title to the real property owned by the merged entities. That
is, this only applies if the real property of the merging
entities becomes the real property of the surviving entity, by
operation of the law of the jurisdiction which governs the
surviving entity, without any need to execute and deliver a
deed.

This conclusion is based on the assumption that the real
property at issue was owned in fee simple, as shown by record
title, by the named entities that are parties to the merger, and
that the documents of merger and the "partnership agreements" of
the to-be-formed limited partnerships state that they are to be
governed by law other than Florida law.

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, your request
and related backup documents are public records under Chapter
119, F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be

deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses
and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department
within 15 days of the date of this letter.

Sincerely,

Baldan E. Sulker
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Office of General Counsel

BES/ mh