Were a credit union's four open-end loan forms subject to Florida documentary stamp tax?

Plain-English summary

None of the four reviewed open-end credit forms was subject to Florida documentary stamp tax. No single document contained a signed, unconditional obligation to pay a sum certain, and the related forms did not expressly incorporate the necessary terms from one another.

The application contained no payment promise. The credit-plan form had a repayment promise but no dollar amount. The disbursement receipt stated amounts and payment terms but contained no promise to pay, and the security agreement also lacked a payment promise. Mere references among the forms were not enough under the ruling.

What this means for you

Documentary stamp tax turned on the executed writing itself and any document it expressly incorporated. A set of forms may collectively contain payment terms without any reviewed form becoming taxable if the statutory elements are not joined through express incorporation.

Common questions

Q: What elements were missing? A signed, unconditional written obligation to pay a sum certain in money.

Q: Could separate documents be read together automatically? No. The ruling required express incorporation, not a mere reference.

Q: Did the ruling decide the effect of the plan's addendum? No. The addendum was not submitted, so the advisement did not address it.

Citations and references

• Fla. Stat. § 201.08(1) — tax on written obligations to pay money
• Fla. Stat. § 201.08(6) — express incorporation of separate documents
• Fla. Admin. Code r. 12B-4.053(6) — signed unconditional obligation to pay a sum certain
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99B4-016

Original ruling text

SUMMARY

QUESTION: Are the submitted forms used by the Credit Union
subject to imposition of documentary stamp taxes?

ANSWER - Based on Facts Below: None of the documents
submitted contain an unconditional written obligation to
pay a sum certain in money, signed by the obligor, nor does
any of the accessing documentation expressly incorporate
terms of the other documents. Therefore, none of them is
subject to the documentary stamp tax under s. 201.08(1),
F.S.

Oct 28, 1999

Re: Technical Assistance Advisement No. 99(B)4-016
Documentary Stamp Tax; Taxation of Various Open-End Forms
under s. 201.08(6), F.S.,
Rule 12B-4.052(6)(b), F.A.C.
XXX (hereinafter Taxpayer)

Dear :

This is in answer to your request for a Technical
Assistance Advisement on the following question:

Are the submitted forms subject to imposition of
documentary stamp taxes:

1. LoanLiner Express Application (Form XX);

2. LoanLiner Credit Open-End Plan Signatures Plus (Form
   XX);

3. LoanLiner Open-End Disbursement Receipt Plus (Form
   XX); and

4. LoanLiner Security Agreement (Form XX)

Facts Presented by Taxpayer

LoanLiner Express Application contains Applicant
Information such as employment, income and loan amount
requested. By signing the application, Applicant promises that
everything he or she stated in the application is correct to the
best of his or her knowledge.

LoanLiner Open-End Plan Signatures Plus contains credit and
security agreement terms and how the plan works. In the
Repayment Clause, the borrower promises to repay all amounts
owed under the Plan, plus interest. By signing this form, the
borrower agrees to be bound by the terms of the agreement. The
form also provides information on Credit Insurance.

LoanLiner Open-End Disbursement Receipt Plus requires
information such as borrower's name and the security offered.
Repayment terms, such as interest rate, amount advanced and
payment amount, are also listed in this form. The borrower, by
signing this form and endorsing the proceeds check for the
advance, or by having the proceeds of the advance deposited into
his or her account or paid to a third party, agrees that the
property described in the form is security under the terms of
the Credit and Security Agreement.

The document named LoanLiner Security Agreement contains
such terms as the security for the loan, what the security
interest covers, ownership of the property, protecting the
security interest, use of the property, property insurance,
taxes and fees, and default provisions. The borrower signs the
agreement, agreeing to be bound by the promises in the security
agreement. Another method of accepting the terms of the
security agreement is for the loanliner account holder to
endorse the check advancing money under the plan. As additional
information provided by you with your fax of XX, 1999, there is
no language either printed or stamped on the back side of the
Taxpayer's checks that will be used with the loan documents
mailed to the Department of Revenue for review. The only
exception to this is when the loan advance is to pay off an
automobile loan at another financial institution with the

Taxpayer becoming the new lienholder.

Determination

Section 201.08(1), F.S., provides that, for a written
obligation to pay money that is made, executed, delivered, sold,
transferred, or assigned in the State of Florida and for each
renewal of the same, the tax is 35 cents on each $100 or
fraction thereof of the indebtedness or obligation evidenced
thereby.

Under Rule 12B-4.053(6), F.A.C., in order to be subject to
tax, the document must contain an unconditional written
obligation to pay a sum certain in money, signed by the obligor.
Section 201.08(6), F.S., provides that taxability of a document
shall not be determined by reference to any separate document
referenced or forming part of the same contract unless the
separate document is expressly incorporated into the document.

The LoanLiner Express Application is not taxable itself
and does not expressly refer to another document as part of the
writing.

The LoanLiner Credit Open-End Plan Signature Plus contains
a promise to pay in the Repayment Clause, but no dollar amount
is stated. It contains mere reference to the other documents,
other than an Addendum which it incorporates. The Addendum was
not submitted with your request, and it effect is not addressed
by this advisement.

The LoanLiner Open-End Disbursement Receipt Plus does not
contain a promise to pay and does not expressly refer to another
document as part of the writing.

The LoanLiner Security Agreement does not expressly refer
to another document as part of the writing and does not contain
a written promise to pay.

None of the documents submitted contain an unconditional
written obligation to pay a sum certain in money, signed by the
obligor, nor does any of the accessing documentation expressly

incorporate terms of the other documents. Therefore, none of
them is subject to the documentary stamp tax under s. 201.08(1),
F.S.

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.
Confidential information must be deleted before public
disclosure. In an effort to protect the 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