Were an auto loan note, loan check, and modification rider subject to Florida documentary stamp tax when read separately?

Plain-English summary

The Florida Department of Revenue concluded that the submitted auto loan note, loan check, and modification rider were not subject to documentary stamp tax on their faces, as long as no other document expressly incorporated them.

A taxable written obligation needed a promise to pay, a sum certain in money, and the borrower's signature within the document or documents expressly incorporated into it. The note lacked the borrower's signature, the check lacked a sum certain, and the rider lacked an unconditional promise and the borrower's signature.

Mere reference to another document was not express incorporation. The result changed if the note, check, lien, or other security document was filed or recorded in Florida; the ruling says documentary stamp tax could then apply.

What this means for you

Auto lenders

Review the face of each instrument and its incorporation language. Do not assume related papers will automatically be read together.

Loan-document teams

Track filing and recording separately from execution. A document nontaxable while unrecorded may become taxable when used as a recorded security instrument.

Accountants and tax professionals

Check for all three obligation elements and for explicit incorporation wording. A cross-reference alone was insufficient here.

Common questions

Q: Did the note contain the borrower's signature?
A: No.

Q: Did the check state a sum certain?
A: No.

Q: Could filing or recording trigger tax?
A: Yes.

Citations and references

• Fla. Stat. §§ 201.08(1)(a), (b), (6), and 213.22
• Fla. Admin. Code rr. 12B-4.052(6)(b), 12B-4.053(1), and 12B-4.054(29)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 16B4-001

Original ruling text

Executive Director
Leon M. Biegalski

QUESTION: IS DOCUMENTARY STAMP TAX DUE ON A PARTICULAR AUTO
EXPRESS LOAN AGREEMENT, SECURITY AGREEMENT, AND TRUTH-IN-LENDING
STATEMENT (AUTO EXPRESS LOAN NOTE), AN AUTO EXPRESS LOAN CHECK, AND
A LOAN MODIFICATION RIDER?
ANSWER: THE AUTO EXPRESS LOAN NOTE CONTAINS THE AMOUNT FINANCED
AND A PROMISE TO PAY; HOWEVER, IT DOES NOT CONTAIN THE SIGNATURE OF
THE BORROWER. ADDITIONALLY, THE NOTE DOES NOT EXPRESSLY
INCORPORATE ANY OTHER DOCUMENT. THE CHECK CONTAINS A PROMISE TO
PAY AND REQUIRES THE SIGNATURE OF A BORROWER; HOWEVER, IT DOES NOT
CONTAIN A SUM CERTAIN IN MONEY. THOUGH THE CHECK MAKES REFERENCE TO
THE NOTE, IT DOES NOT EXPRESSLY INCORPORATE THE NOTE OR ANY OTHER
DOCUMENT. THE RIDER CONTAINS THE AMOUNT FINANCED; HOWEVER, IT DOES
NOT CONTAIN AN UNCONDITIONAL PROMISE TO PAY A SUM CERTAIN IN MONEY
OR THE SIGNATURE OF THE BORROWER. ADDITIONALLY, THE RIDER DOES NOT
EXPRESSLY INCORPORATE ANY OTHER DOCUMENT. THEREFORE, THE
DOCUMENTS ARE NOT SUBJECT TO DOCUMENTARY STAMP TAX. HOWEVER, TAX
APPLIES IF ANY OF THE DOCUMENTS ARE FILED OR RECORDED IN FLORIDA.
August 8, 2016
Re:

Technical Assistance Advisement No. 16B4-001
Documentary Stamp Tax - Auto Express Loan Agreement, Security Agreement, and
Truth-In-Lending Statement (Auto Express Loan Note), an Auto Express Loan Check
and a Loan Modification Rider.
Section 201.08(1)(a), (b), Florida Statutes (F.S.)
Rules 12B-4.052(6)(b), 12B-4.053(1), 12B-4.054(29), Florida Administrative Code
(F.A.C.)
XXXX (Requestor)

Dear XXXX:
This is in response to your request dated XXXX, for a Technical Assistance Advisement (TAA)
pursuant to s. 213.22, F.S., and Rule 12-11, F.A.C., concerning the application of documentary
stamp tax on documents provided by the Requestor to XXXX operating in Florida. An
examination of your letter has established that you have complied with the statutory and
regulatory requirements for issuance of a TAA. Therefore, the Department is hereby granting
your request for a TAA.

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

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

Technical Assistance Advisement
Page 2

FACTS AS PRESENTED BY PRACTITIONER
You provided for review an Auto Express Loan Note consisting of: Auto Express Loan
Agreement, Security Agreement, and Truth-In-Lending Statement (Note), an Auto Express Loan
Check (Check), and a Loan Modification Rider (Rider), typically provided by the Requestor to
XXXX located in Florida. You asserted that while the Note contains a sum certain of money and
a promise to pay, it does not contain the consumer’s signature. You asserted that the Check
contains a promise to pay money and the consumer’s signature, but it does not contain a sum
certain in money. You further asserted that the Rider contains a sum certain of money but it does
not contain a promise to pay or the consumer’s signature. You stated that none of the documents
“expressly incorporates” any of the other documents.
REQUESTED RULING
You requested the Department determine if documentary stamp tax is due on the Note, Check, and
Rider provided for review.
LAW AND DISCUSSION
Section 201.08(1)(a), F.S., imposes documentary stamp tax on written obligations to pay money,
and each renewal thereof, made, executed, delivered, sold, transferred, or assigned in Florida.
The tax rate is $.35 for each $100 or fraction thereof of the indebtedness or obligation evidenced
thereby. Section 201.08(6), F.S., states the taxability of a document is to be determined solely
from the face of the document and any separate document expressly incorporated into the
document.
Rule 12B-4.052(6)(b), F.A.C., dealing with documentary stamp tax, provides that the taxability
of a written obligation to pay money is determined from the form and face of the document.
Whether a document is taxable is determined by reference to that document and any other
document or documents expressly incorporated therein. Express incorporation occurs when
words in a document provide that another document or documents are incorporated therein.
Some examples of express incorporation include:
•
•
•
•
•
•
•
•

[document] is incorporated herein;
[document] the terms of which are incorporated herein;
[document] is made a part hereof;
[document] is a part of [this document];
The agreement consists of [this document] and [separate document] the same as if it were
fully set forth
herein;
[document] shall become a part of [document]; and
[document] and [document] constitute a single document.

Rule 12B-4.053(1), F.A.C., provides that the tax is on the “Promise to Pay” and each renewal
thereof, and to be a “note or other obligation” it must be signed by the maker or obligor.

Technical Assistance Advisement
Page 3

To be taxable under s. 201.08(1)(a), F.S., a written obligation to pay money must have the
following three elements within the four corners of the document or must expressly incorporate
other documents such that, when the documents are read together, it contains these elements:

1. A written promise to pay;
2. A sum certain in money; and
3. The signature of the borrower.
   Section 201.08(1)(b), F.S., provides that for mortgages, trust deeds, security agreements, or other
   evidences of indebtedness filed or recorded in this state, and for each renewal of the same, the
   documentary stamp tax shall be $.35 on each $100 or fraction thereof of the indebtedness or
   obligation evidenced thereby.
   Rule 12B-4.054(29), F.A.C., provides that the filing or recording in Florida of a UCC Financing
   Statement is not taxable under Section 201.08(1), F.S., unless the note, security agreement or
   other obligatory document is also filed or recorded. However, a notation relative to stamp tax is
   required on the UCC Financing Statement whether tax is due or not. The notation shall state that
   proper stamp taxes under Chapter 201, F.S., have been placed on the promissory instruments and
   will be placed on any additional promissory instrument, or that tax is not required.
   DEPARTMENT’S POSITION
   The documents submitted for review are not subject to documentary stamp tax (so long as there
   are no other documents that expressly incorporate any of the documents reviewed) for the
   following reasons:
   1) The Note contains the amount financed and a promise to pay; however, it does not
   contain the signature of the borrower. Additionally, the Note does not expressly
   incorporate any other document.
   2) The Check contains a promise to pay and requires the signature of a borrower;
   however, it does not contain a sum certain in money. Though the Check makes
   reference to the Note, it does not expressly incorporate the Note or any other
   document.
   3) The Rider contains the amount financed; however, it does not contain an
   unconditional promise to pay a sum certain in money or the signature of the borrower.
   Additionally, the Rider does not expressly incorporate any other document.
   Since the Check provides for a security interest in property, documentary stamp tax imposed
   under s. 201.08(1)(b), F.S., would be due if the Check is filed or recorded in Florida.
   Documentary stamp tax is due on the Note if it is filed or recorded in Florida since it grants a
   security interest in property.
   Additionally, please note that the tax imposed under s. 201.08(1)(b), F.S., may be due if any lien
   or other document evidencing a security interest is filed or recorded in Florida.

Technical Assistance Advisement
Page 4

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 documents are public records
under Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s.
213.22, F.S. Your name, address, and any other details, which might lead to identification of the
taxpayer, must be deleted before disclosure. In an effort to protect the confidentiality of such
information, we request you provide the undersigned with an edited copy of your request for
Technical Assistance Advisement, backup material and response within fifteen days of the date
of this advisement.
Sincerely,

Juanita Slagle
Juanita Slagle
Tax Law Specialist
Technical Assistance & Dispute Resolution
JMS
Record ID: 211122