Did pre- and post-judgment interest awarded with specific performance enter the documentary-stamp-tax consideration for a Florida deed?

Plain-English summary

A buyer defaulted on a Florida real-property sales contract. A court ordered specific performance and awarded the seller pre- and post-judgment interest as compensation for the period when the seller could not use the sales proceeds.

The Department concluded that the judgment interest was not consideration for the property interest conveyed. It compensated for unavailable funds rather than purchasing the real estate.

Assuming no other consideration and complete supporting documentation, documentary stamp tax on the deed was measured by the agreed contract sales price alone.

What this means for you

Not every amount paid in connection with a compelled closing becomes deed consideration. The payment's legal and economic purpose matters.

Common questions

Was the deed taxable? Yes.

What was the tax base? The agreed contract sales price.

Was judgment interest included? No, because it compensated the seller for the unavailability of the sales funds.

Citations and references

• Fla. Stat. § 201.02(1)(a), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 12B4-003

Original ruling text

Executive Director
Lisa Vickers

TAX: Documentary stamp tax
TAA NUMBER: 12B4-003
ISSUE: Consideration for transfer of property
STATUTE CITE(S) 201.02(1)(a), F.S.
QUESTION: Does consideration for property transferred include pre and post judgment interest awarded
by a judgment for specific performance of a sales contract or the contracted sales price.
ANSWER: The documentary stamp tax is due on the deed that transfers the property pursuant to the
contract based on the consideration given equal to the agreed upon contract sales price.
April 6, 2012
XXX
XXX
XXX
Re:

Technical Assistance Advisement 12B4-003
Documentary Stamp Tax – Consideration for Deed
Section 201.02(1)(a), F.S.
XXX (Taxpayer)

Dear XXX:
This is in response to your letter dated XXX, requesting a determination whether documentary stamp tax
is due on pre and post judgment interest awarded to a seller where the buyer defaulted under a sales
contract or whether the tax is due only on the contract sales price. This response constitutes a Technical
Assistance Advisement under Chapter 12-11, Florida Administrative Code (F.A.C.), and is issued to you
under the authority of Section 213.22, Florida Statutes (F.S.).
FACTS PRESENTED BY PRACTIONER
On XXX, Taxpayer entered into a contract to sell Florida real property to XXX (Purchaser). The agreed
upon purchase price per the contract was $XXX. On XXX, Purchaser asked to terminate the contract due
to weakened residential market conditions. Taxpayer declined to terminate the contract and filed an action
against Purchaser, seeking specific performance of the contract. On XXX, the XXX Court ruled in favor
of Taxpayer, ordering Purchaser to specifically perform in accordance with the contract. The court also
ruled that Taxpayer was to receive compensation for the unavailability of the sales funds in the form of
pre and post judgment interest.
Child Support Enforcement – Ann Coffin, Director z General Tax Administration – Jim Evers, Director
Property Tax Oversight – James McAdams, Director z Information Services – Tony Powell, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement 12B4-003
Page 2

REQUESTED RULING
You request that the Department of Revenue rule whether the consideration for the property transferred
includes pre and post judgment interest awarded by a judgment for specific performance of a sales
contract, or whether consideration is limited to the contracted sales price.
LAW AND DISCUSSION
Section 201.02(1)(a), F.S., imposes documentary stamp tax on “deeds, instruments, or writings whereby
any lands, tenements, or other real property, or any interest therein, shall be granted, assigned, transferred,
or otherwise conveyed to, or vested in, the purchaser or any other person by his or her direction”. The tax
rate is 70 cents on each $100 of the consideration or portion thereof, for the property interest transferred.
“For purposes of this section, consideration includes, but is not limited to, the money paid or agreed to be
paid; the discharge of an obligation; and the amount of any mortgage, purchase money mortgage lien, or
other encumbrance, whether or not the underlying indebtedness is assumed”. Where property other than
money is exchanged for interests in real property, there is the presumption that the consideration is equal
to the fair market value of the real property interest being transferred.
DEPARTMENT’S POSITION
A deed that transfers an interest in Florida real property is taxable under s. 201.02(1)(a), F.S., based on the
consideration for the property transferred. The inclusion of compensation for the unavailability of sales
funds by a judgment ordering specific performance of a contract is not consideration for the property
interest transferred. Absent any other consideration, and so long as all facts were presented and all
relevant documentation were provided, the documentary stamp tax is due on the deed that transfers the
property pursuant to the contract based on the consideration given equal to the agreed upon contract sales
price of $XXX.
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,

Technical Assistance Advisement 12B4-003
Page 3

Henry Small
Senior Tax Specialist
Technical Assistance and Dispute Resolution
HJS/tlf
Record ID: 118283