Was a mortgaged-property transfer between two direct-support organizations acting as agents for the same college subject to documentary stamp tax?

Subject

Direct Support Organizations

Plain-English summary

The real-property transfer between the two college direct-support organizations was not subject to documentary stamp tax. The foundation and housing organization each acted as an agent for the same college, so the property moved between agents on behalf of a common principal.

The property was subject to a mortgage, but the Department's determination rested on the established agency relationships.

What this means for you

Separate legal entities did not create a taxable conveyance when both were proven agents acting for the same principal under the cited rule.

Common questions

Q: Was the transfer taxable? No.

Q: What relationship controlled? Both organizations acted as agents for the college.

Q: Did the mortgage change the answer? Not under the stated facts.

Citations and references

• Fla. Stat. § 201.02(1) — documentary stamp tax on real-property transfers
• Fla. Admin. Code r. 12B-4.014(5) — agent-to-principal conveyances
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01B4-006

Original ruling text

SUMMARY

QUESTION: Is the transfer of real property from one direct
support organization acting as an agent for a college to
another direct support organization acting as an agent for
the college subject to the documentary stamp tax?

ANSWER - Based on Facts Below: Based on Facts Below: No.
Since Rule 12B-4.014(5), F.A.C., does not tax transfers
when an agent is acting on behalf of a principal, the
transfer from one direct support organization to another
would be exempt from the documentary stamp tax, as the
direct support organizations are both acting on behalf of a
common principal (the college).

Jun 29, 2001

Re: Technical Assistance Advisement No. 01B4-006
Documentary Stamp Tax
Direct Support Organizations
Section 201.02(1), F.S.
Rule 12B-4.014(5), F.A.C.
XXX (College)
XXX (Foundation)
XXX (Housing)

Dear :

This is in response to your request for a Technical
Assistance Advisement regarding the documentary stamp tax
implications of a transfer of real property involving direct
support organizations acting as agent for College.

FACTS PRESENTED BY TAXPAYER

The Foundation, a statutorily defined direct support
organization acting as an agent for the College, is transferring
property subject to a mortgage to Housing, also a statutory

direct support organization, also acting as an agent for the
college. Taxpayer is seeking a determination as to whether such
transfer is exempt from documentary stamp tax.

LAW AND DISCUSSION

Section 201.02(1), F.S., imposes the documentary stamp tax
on transfers of real property at the rate of $.35 per $100.00,
or fraction thereof, based on the consideration given. However,
certain conveyances are not subject to tax, including those
where an agent/principal relationship exists. As stated in Rule
12B-4.014(5), F.A.C., "A deed from an agent to his principal
conveying real estate purchased for and with funds of the
principal is not taxable."

In this case, the Foundation is acting as an agent for the
College. Housing is also acting in an agency capacity for the
College. Based on the cited Rule, transfers between such
entities would not be subject to tax.

DETERMINATION

Since both the Foundation and Housing are acting as agents
of the College, the transfer of real property from one agent
(Foundation) to another agent (Housing) is not subject to
documentary stamp 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. 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 from that
which is expressed in this response.

You are further advised that this response, your request
and related backup 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,

Joy B. Eldred, C.P.A.
Tax Law Specialist
Technical Assistance and Dispute Resolution
Office of the General Counsel

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