Was an irrevocable charitable remainder unitrust exempt from Florida's historical intangible personal property tax?

Plain-English summary

Florida exempted the charitable remainder unitrust from the historical intangible personal property tax for tax years beginning on or after January 1, 2001. The trust was irrevocable and paid recipients 5% of the net fair-market value of trust assets each year.

The Department distinguished the earlier period. Before January 1, 2001, the unitrust was taxable while its corpus was held by a nonexempt trustee. Rule 12C-2.002(1)(d), as quoted, changed the treatment for tax years beginning on or after that date.

What this means for you

This page documents historical Florida intangible-tax treatment, not a current general rule for trust taxation. The trust type, tax year, trustee status, governing instrument, and current statutes all require separate review.

Common questions

Q: Was the trust exempt before 2001?
A: No, according to the ruling, while the nonexempt trustee held the corpus.

Q: When did the exemption apply?
A: For tax years beginning on or after January 1, 2001.

Q: Did the ruling concern income tax?
A: No. It addressed Florida's historical intangible personal property tax.

Citations and references

• Fla. Stat. § 199.185(4) — historical charitable-trust exemption
• Fla. Admin. Code r. 12C-2.002(1)(d) — historical charitable-unitrust treatment
• Fla. Admin. Code r. 12C-2.003(10) — charitable-trust exemption
• IRC § 501(c)(3) — exempt organizations referenced in the quoted provisions
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 03C2-001

Original ruling text

SUMMARY

QUESTION: Does the Charitable Remainder Unitrust qualify
for exemption for intangible tax.

ANSWER - Based on Facts Below: Yes, subsequent to January
1, 2001, the Trust would be exempt from the tax.

Jul 28, 2003

Re: Technical Assistance Advisement No. 03C2-001
Intangible Tax; Charitable Remainder Trust
Section 199.185(4), F.S.
Rule(s) 12C-2.002(1) and 12C-2.003 (10) F.A.C.
XXX (hereinafter Trust)

Dear :

Your letter requesting a Technical Assistance Advisement
has been referred to this office for response. The specific
scenario for which advice has been requested is summarized
below.

Facts as Presented by Petitioner

The Trust is a Charitable Remainder Unitrust. The Trust
provides that it is irrevocable and that five percent (5%) of
the net fair market value of the assets of the Trust are paid
annually to the Recipients. As provided by the Trust, 5% per
annum of the trust value was removed.

Request for Advisement

You request a Technical Assistance Advisement stating that
the Trust meets the requirements for exemption from the
intangible tax.

Provisions of Law

Section 199.185(4) F.S., states:

Charitable trusts, 95 percent of the income of which is
paid to organizations exempt from federal income tax
pursuant to s. 501(c)3 of the Internal Revenue Code, shall
be exempt from the tax imposed in s. 199.032.

Rule 12C-2.003(10) F.A.C., states:

A charitable trust is exempt from tax. For the purpose of
this exemption, a charitable trust is a trust that is
paying 95 percent or more of its income to one or more
organizations exempt from federal income tax under Section
501(c)(3), IRC.

Rule 12C-2.002(1)(d), F.A.C, pertaining to unitrusts,
provides:

Charitable Unitrust - such trusts are taxable while trust
corpus is held by a nonexempt trustee. For tax years
beginning on or after January 1, 2001, charitable unitrusts
are exempt from tax.

Position of the Department

Prior to January 1, 2001, while the nonexempt Trustee held
the corpus or the body of this trust, the trust was subject to
tax. However, on or after January 1, 2001, the trustee would no
longer be liable for tax and the Trust would therefore be
exempt.

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,

Celestine Grantham
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Office of General Counsel

CG/mh