Were redacted trade documents subject to Florida documentary stamp tax merely because they were executed in Florida?

Plain-English summary

Florida found that the reviewed trade documents were not taxable written obligations to pay money and did not become taxable merely because they were executed in Florida.

Within their four corners, the documents did not contain all three required elements: an unconditional written promise to pay, a sum certain, and the borrower's signature. The conclusion assumed that the trade documents were not expressly incorporated with other documents that supplied those elements.

The Department cautioned that documentary stamp tax could still arise from collateral-security arrangements or a mortgage, security agreement, or other evidence of indebtedness filed or recorded in Florida. Other redacted documents mentioned in the request were outside the ruling's scope.

What this means for you

Businesses executing financing-related documents

Florida execution alone does not make every document taxable. The document's terms and any documents it expressly incorporates control the written-obligation analysis.

Lenders and recording teams

Separately analyze collateral assignments and filed or recorded security documents; those events can create tax even when the reviewed trade document itself is not taxable.

Common questions

Were the trade documents taxable obligations? No.

Did signing them in Florida make them taxable? No, by itself.

What could change the result? Express incorporation of a signed, unconditional sum-certain promise, use as collateral for a new loan, or filing or recording a security document in Florida.

Citations and references

• Fla. Stat. Sec. 201.08(1)(a)
• Fla. Stat. Sec. 201.08(1)(b)
• Fla. Stat. Sec. 201.08(6)
• Fla. Admin. Code R. 12B-4.052(6)(b)
• Fla. Admin. Code R. 12B-4.053(1)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 20B4-002

Original ruling text

QUESTION: Are certain trade documents obligations to pay money?
ANSWER: The trade documents are not obligations to pay money and are not subject to
documentary stamp tax. Documentary stamp tax would be due if other documents are
expressly incorporated into or with any of the documents executed or signed in Florida, such
that, when the expressly incorporated documents are read together, contain an unconditional
written promise to pay; a sum certain in money; and the signature of the borrower.
QUESTION: Is documentary stamp due on certain trade documents solely because the
documents are executed in Florida.
ANSWER: Documentary stamp tax would not be due on the trade documents solely because
they are executed in Florida. so long as the trade documents are not given as collateral security
for a loan, and so long as there is no express incorporation of any of the trade documents
executed or signed in Florida with any other documents, such that, when the expressly
incorporated documents are read together, contain an unconditional written promise to pay; a
sum certain in money; and the signature of the borrower.
July 31, 2020
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
Re:

Technical Assistance Advisement No. 20B4-002
Documentary Stamp Tax
Sections 201.08, Florida Statutes (F.S.)
XXXXX (“Taxpayer”)

Dear XXXXX:
This is in response to your request dated April 27, 2020, for a Technical Assistance Advisement
(TAA) pursuant to s. 213.22, F.S., and Rule Chapter 12-11, Florida Administrative Code (F.A.C.),
concerning the application of Florida’s documentary stamp tax, as imposed under sections
201.02(8), F.S., on certain documents that may be executed in Florida. An examination of your

Technical Assistance Advisement
Page 2

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.
FACTS AS PRESENTED BY PRACTITIONER
The following documents were presented for examination.: XXXXX (the documents referred to
in clause (i) through clause (vii) hereinabove, the “Trade Documents”), XXXXX
The Taxpayer’s business involves XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.
You stated that XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.
REQUESTED RULINGS
Issue 1
You requested that the Department confirm that the Trade Documents are not written
obligations to pay money.
Issue 2
You requested that the Department confirm whether executing the Trade Documents in Florida
would, in and of itself, subject XXXXX to Florida documentary stamp tax.
LAW AND DISCUSSION
Section 201.08(1)(a), F.S., provides that for promissory notes, nonnegotiable notes, written
obligations to pay money, or assignments of salaries, wages, or other compensation made,
executed, delivered, sold, transferred, or assigned in the state, and for each renewal of the
same, the tax shall be 35 cents on each $100 or fraction thereof of the indebtedness or
obligation evidenced thereby. The tax on any document described in this paragraph may not
exceed $2,450. Under section 201.08(6), F.S., 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;

Technical Assistance Advisement
Page 3

• [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 due under s. 201.08(1)(a), F.S., is on the
“Promise to Pay” and each renewal thereof, and to be taxable the “note or other obligation”
must be signed by the maker or obligor.
In order 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, contain these
elements:

1. An unconditional written promise to pay;
2. A sum certain in money; and
3. The signature of the borrower.
   Rule 12B-4.053(27), F.A.C., provides that an assignment of a mortgage by a lender (mortgagee
   or owner of the asset) to a new lender who has purchased the note and mortgage and becomes
   the holder of the note and mortgage is not taxable. (State v. Sweat, 113 Fla. 797, 152 So. 432
   (1934)). However, where the assignment of a mortgage is given as collateral security for a new
   loan, the assignment is taxable.
   DEPARTMENT’S POSITION
   This TAA is predicated on the understanding that in no case the documents presented for
   review are expressly incorporated one with another and that any other documents expressly
   incorporated therein, when considered together, do not provide for a change of the debt
   obligors or debt obligations in any form. The transactions contemplate XXXXX or other
   transactions between or among lenders without any change of obligors or to the obligations.
   Documentary stamp tax applies to written obligations to pay money, and each renewal thereof,
   made, executed, delivered, sold, transferred, or assigned in Florida. Additionally, documentary
   stamp tax is due on mortgages, trust deeds, security agreements, or other evidences of
   indebtedness filed or recorded in this state, and each renewal of the same.

Technical Assistance Advisement
Page 4

Issue 1
The Trade Documents do not contain the three elements noted on page 3 of this TAA and are
not obligations to pay money. Therefore, documentary stamp tax would not be due on the
Trade Documents. Documentary stamp tax would be due if other documents are expressly
incorporated into or with any of the Trade Documents executed or signed in Florida, such that,
when the expressly incorporated documents are read together, contain the three elements
noted on page 3 of this TAA.
This ruling addresses only the taxability of the Trade Documents and the Department notes that
Documentary stamp tax may be required on the XXXXX under s. 201.08(1)(a) and (b), F.S., if the
XXXXX meets the statutory requirements of taxability.
Since the XXXXX provides for a security interest, the documentary stamp tax imposed under s.
201.08(1)(b), F.S., would be due if either the XXXX are filed or recorded in Florida. The tax
would be due on the amount secured thereby, even if that amount is conditional.
Since the XXXXX discuss circumstances in which there may be a pledge of collateral, the
documentary stamp tax imposed under s. 201.08(1)(b), F.S., would be due if a mortgage,
security agreement, or other evidence of indebtedness is filed or recorded in this state to
secure the payment of an obligation. The tax would be due on the amount secured thereby,
even if that amount is conditional.
Issue 2
The Trade Documents were found not to be obligations to pay money. Documentary stamp tax
would not be due on the XXXXX in Florida solely because of the execution, delivery and
performance of any of the Trade Documents (regardless of where such Trade Documents was
executed), so long as XXXXX are not given as collateral security for a loan, and so long as there
is no express incorporation of any of the Trade Documents executed or signed in Florida with
any other documents, such that, when read together contain the three elements addressed in
this TAA.
This TAA does not address the taxability of the XXXXX.
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.

Technical Assistance Advisement
Page 5

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,

Henry Small

Henry Small
Tax Law Specialist
Technical Assistance and Dispute Resolution
Record ID: 367514