Did Florida documentary stamp tax apply to the bank's line-of-credit agreement and access methods?

Plain-English summary

The submitted bank forms were not subject to documentary stamp tax. Although the line-of-credit agreement was signed, it did not state an unconditional promise to pay a sum certain at execution. Standard checks contained no promise-to-pay language, while overdraft and ATM access involved no paper.

The Department also found that the agreement and access checks were not expressly incorporated into one another, so their separate terms could not be combined to create a taxable written obligation.

What this means for you

Florida examines the face of the document and any document it expressly incorporates. A credit limit or repayment framework does not by itself establish a taxable signed promise to pay a fixed sum.

Common questions

Q: Was the agreement unsigned? No. It was signed, but it lacked an unconditional promise to pay a sum certain at execution.

Q: Could the Department combine the agreement with the checks? No. The forms did not expressly incorporate one another.

Citations and references

• Fla. Stat. § 201.08(1) and (6) — written obligations and face-of-document review
• Fla. Admin. Code r. 12B-4.052(6) — signed promise to pay a sum certain
• Fla. Admin. Code r. 12B-4.054(4) — promises not fixed and absolute
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 02B4-010

Original ruling text

SUMMARY

QUESTION: Are any of the submitted bank forms subject to
the imposition of documentary stamp tax under s. 201.08,
F.S.?

ANSWER - Based on Facts Below: No. Since none of the bank
forms submitted with the request contain all three elements
required for the imposition of documentary stamp tax and
none of the forms are specifically incorporated within any
other of the forms, documentary stamp tax is not required.

Dec 06, 2002

Re: Technical Assistance Advisement No. 02B4-010
Documentary Stamp Tax - Taxation of Various Bank Forms
Section 201.08, F.S.
XXX (hereinafter the Bank)

Dear :

This is in response to your request for a Technical
Assistance Advisement in which you ask us about the Florida
documentary stamp tax consequences of the execution and delivery
of forms submitted with your letter. The facts for which advice
has been requested are presented below.

Facts Presented by Petitioner

The Bank anticipates doing business in Florida. Pursuant
to its banking business, it provides credit lines utilizing
Preferred Line Agreement (the "Agreement"). The Agreement lists
an amount for the Line of Credit and contains an agreement to
repay all obligations, including all finance and other charges
that apply. There is, however, no specific amount of debt
indicated on the face of the documents. The Bank line of credit
is accessed by standard checks, overdrawing the checking
account, to which the line of credit is tied by, ATM access, or

by a debit slip.

Requested Ruling by the Petitioner

You seek the Department's confirmation that no Florida
documentary stamp tax should be imposed on the Agreement.

Law and Discussion

Section 201.08(1), F.S., imposes a documentary stamp tax on
promissory notes and written obligations to pay money executed
or delivered in the State of Florida. The document must contain
an unconditional written obligation to pay a sum certain in
money, signed by the obligor. See Rule 12B-4.052(6), F.A.C.

Section 201.08(6), F.S., states that taxability of a
document "shall be determined solely from the face of the
document and any separate document expressly incorporated into
the document".

Under Rule 12B-4.054(4), F.A.C., a written promise to pay
money which is not fixed and absolute at the time of execution
is not subject to documentary stamp tax.

Conclusion

The Agreement is signed by the obligor but does not contain
an unconditional written promise to pay a sum certain at the
time of execution. The standard check does not have any promise
to pay language, and the overdraft and ATM access do not involve
any paper.

The Agreement or Access Checks are not expressly
incorporated into one or more of the other documents for
purposes of Florida documentary stamp tax law. Therefore, none
of documents are 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, 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 interpretation of the
statutes or rules upon which this advise 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
199, 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 & Dispute Resolution
Office of General Counsel

BES/mh