Under the 2004 documentary-stamp-tax rules, did the $2,450 cap for an unrecorded premium-finance agreement continue if the agreement was later filed or recorded in Florida?
Apply this to your situation
This page answers the general question as of 2004. Ezel answers yours, under current Florida tax law, with citations.
Plain-English summary
Florida concluded that the documentary stamp tax on the unrecorded premium-finance agreement was capped at $2,450 under the 2004 statute—but the cap did not survive a later Florida filing or recording. Recording triggered additional tax up to the full amount otherwise due.
The finance company lent businesses money for insurance premiums. Its repayment source included unearned premiums returned after policy cancellation. The insured gave an irrevocable power of attorney, but the finance company did not need to file or record anything in Florida to perfect its interest.
Why the unrecorded agreement received the cap
The Department classified the agreement as an unsecured written obligation to pay money when it was not filed or recorded in Florida. Section 201.08(1)(a) imposed tax at 35 cents per $100 or fraction of indebtedness but limited tax on that kind of unrecorded obligation to $2,450.
Later recording triggered the uncapped difference
Section 201.08(1)(b) required additional documentary stamp tax when an obligation previously taxed under the unrecorded-document rule was later filed or recorded in Florida. The taxpayer received credit for the amount already paid but owed the excess above the former cap up to the total tax due.
The Department also stated that an overpayment refund relating to a premium-finance agreement could be requested on Form DR-26.
What this means for you
Premium-finance companies and lenders
Document status matters. A cap that applies while an obligation remains outside Florida's public records may cease to limit tax if the document is later recorded.
Loan-document and legal teams
Coordinate later enforcement or recording decisions with documentary-stamp-tax review. Filing the same instrument can change the amount due.
Accountants and tax professionals
Treat the $2,450 figure as the ruling's 2004 amount, not an unsourced statement of the current cap. Confirm present law before calculating tax or a refund.
Common questions
Q: What was the maximum tax on the unrecorded agreement in this TAA?
A: $2,450 under the 2004 statute.
Q: Why was the agreement treated as unsecured?
A: No document had to be filed or recorded in Florida to perfect the interest in unearned premiums.
Q: What happened if the agreement was later recorded?
A: Additional tax became due above the amount already paid, up to the full tax otherwise imposed.
Q: Did the ruling mention refunds?
A: Yes. It referred to Form DR-26 for an overpayment-refund request.
Citations and references
- Fla. Stat. § 201.08(1)(a) — tax and 2004 cap for unfiled or unrecorded written obligations
- Fla. Stat. § 201.08(1)(b) — additional tax after later filing or recording
- Fla. Stat. § 213.22 — Technical Assistance Advisements
Source
- Landing page: Florida Tax Law Library
- Advisement: TAA 04B4-003
Original ruling text
SUMMARY
QUESTION: Will any additional documentary stamp tax above
the maximum cap be due if the document is subsequently
filed or recorded in Florida?
ANSWER - Based on Facts Below: If a premium financing
agreement or other evidence of indebtedness is subsequently
filed or recorded in Florida on which only the maximum cap
of $2,450.00 documentary stamp tax has been paid,
additional tax is required up to the total amount of tax
due that exceeds the cap of $2,450.00.
Feb 20, 2004
Re: Technical Assistance Advisement No. 04B4-003
Documentary Stamp Tax; Tax Limitation on Unsecured
Obligations
Section 201.08(1), F.S.
XXX (Premium Financing Company)
Dear :
This is in response to your request for a technical
assistance advisement, asking for an opinion on whether the cap
on documentary stamp taxes in s. 201.08(1)(a), F.S., applies to
insurance premium finance agreements.
FACTS AS PRESENTED BY PETITIONER
Premium Financing Company lends money to companies to
finance their business insurance premiums. The collateral for
the loan is the unearned insurance premiums of the policy that
was financed. Upon cancellation of that policy, Premium
Financing Company is to receive the unearned premiums, if any,
in full or partial repayment of the loan. A lien is created by
the Irrevocable Power of Attorney given by the insured at the
time the insured executes the Premium Finance Agreement.
The Premium Financing Company is not required to file
anything to perfect that interest. That is, nothing needs to be
filed or recorded in Florida to perfect the interest of a
premium finance corporation in the unearned premiums.
REQUESTED RULING
You request a Technical Assistance Advisement determining
that no documentary stamp tax above the maximum cap of $2,450 is
due as a result of the issuance of an unrecorded Premium Finance
Agreement.
DISCUSSION AND LAW
The Premium Finance Agreement is classified as an unsecured
written obligation to pay money when not secured by a document
filed or recorded in the Florida public records. Under s.
201.08(1)(a), F.S., written obligations to pay money
representing documents which are not filed or recorded in
Florida are subject to documentary stamp tax in the amount of 35
cents on each $100 or fraction thereof of the indebtedness or
obligation evidenced thereby. The tax on the obligation
described, if the document is not filed or recorded in Florida,
may not exceed $2,450.00.
Under s. 201.08(1)(b), F.S., if the document is
subsequently filed or recorded in Florida to evidence an
indebtedness or obligation upon which tax was paid under s.
201.08(1)(a), F.S., additional documentary stamp tax that
exceeds the tax previously paid on the document under s.
201.08(1)(a), F.S., must be paid on the document.
DEPARTMENTS POSITION
The documentary stamp tax on a premium finance agreement as
presented is subject to a maximum cap of $2,450 if the document
is not filed or recorded in Florida.
If the document is subsequently filed or recorded in
Florida, additional documentary stamp tax is required up to the
total amount of tax due that exceeds the cap of $2,450.
A refund due in regard to overpayment of documentary stamp
tax related to a premium finance agreement may be requested by
filing form DR-26, Application for Refund.
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 this letter.
Sincerely,
M.E. Clemens, C.P.A.
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Office of General Counsel
MEC/mh
Get today's answer for your situation
You just read a 2004 ruling on this question. Ezel checks current Florida tax law and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the authority it relies on.