Was Florida documentary stamp tax due when one Delaware limited partnership merged into another and Florida property vested by law?

Plain-English summary

Florida found no documentary stamp tax due because Delaware merger law vested the Florida real estate in the surviving limited partnership by operation of law without a deed.

Both entities were Delaware limited partnerships. One owned a single Florida parcel and would merge into the other, which survived. The cited Delaware statute transferred title automatically.

Florida's rules treated a statutory merger transfer to a surviving entity as nontaxable unless a deed was given. Because the transaction required no deed, the Department found no taxable instrument.

What this means for you

The result depended on the legal effect of the governing merger statute, not merely the transaction's label. Confirm automatic vesting and whether any separate deed will be used.

Common questions

Q: Did the property remain in Florida? Yes.

Q: Did the foreign status of the partnerships alone create the exemption? No. Automatic vesting without a deed was the key fact.

Q: What if a deed were given? The cited Florida rules would change the analysis.

Citations and references

• Fla. Stat. § 201.02(1) — tax on instruments conveying Florida real property
• Fla. Admin. Code rr. 12B-4.013(31) and 12B-4.014(8) — statutory merger transfers
• Del. Code Ann. tit. 6, § 17-211 (1998) — cited Delaware merger provision
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99B4-020

Original ruling text

SUMMARY

QUESTION: Will Florida real property transferred as a
result of a merger of Delaware Limited Partnership with
another Delaware Limited Partnership be subject to
documentary stamp tax?

ANSWER - Based on Facts Below: Providing that the merger
complies with Delaware law, which requires no deed to be
given when real property is conveyed, the transaction would
be exempt from documentary stamp tax.

Dec 23, 1999

Re: Technical Assistance Advisement No. 99(B)4-020
Documentary Stamp Tax on Merger of Two Foreign Limited
Partnerships pursuant to Foreign Statute
Section 201.02(1), F.S.; Rules 12B-4.013(31) and 12B4.014(8), F.A.C.
XXX (Delaware Limited Partnership)
XXX (Limited Partnership)

Dear :

This is in response to your recent request for a Technical
Assistance Advisement in which you request an advisement as to
whether documentary stamp tax will be due on the transfers of
Florida real property by operation of law incident to the merger
of two foreign limited partnerships pursuant to a foreign
statute.

Facts Presented by the Petitioner

The Limited Partnership was formed under the laws of the
State of Delaware. The Delaware Limited Partnership also was
formed under the laws of Delaware. The Limited Partnership owns
a single parcel of property in XXX County, Florida. Delaware
Limited Partnership proposes to merge with the Limited

Partnership, pursuant to the laws of the State of Delaware.
After the merger, the Delaware Limited Partnership will be the
surviving entity. Under Delaware law, all real estate owned by
the Limited Partnership will be vested in the surviving entity,
Delaware Limited Partnership, by operation of law, without the
necessity of recording a deed. As a result, no deed will be
recorded in the State of Florida transferring the Limited
Partnership's real property to the Delaware Limited Partnership.

Requested Ruling

Provided that the Limited Partnership's merger with the
Delaware Limited Partnership complies with Delaware law, no
documentary stamp tax will be due in connection with the
transfer of the Florida real property pursuant to the statutory
merger when the real property is transferred by operation of the
Delaware limited partnership merger statute.

Discussion and Law

Section 201.02(1), F.S., imposes a tax at the rate of 70
cents on each $100 of consideration on instruments conveying an
interest in real property.

Rules 12B-4.013(31) and 12B-4.014(8), F.A.C., each provide
that the transfer of real property to a surviving corporation,
partnership, limited liability company or other business entity
resulting from the operation of an applicable statute governing
the merger or consolidation of such business entities is not
taxable unless a deed is given, in which case the consideration
is presumed to be equal to the fair market value of the real
property interest being transferred.

The Delaware Revised Uniform Limited Partnership Act
provides that all rights, title and interests to all real estate
that is owned by the merging limited partnership is
automatically vested in the surviving or resulting limited
partnership. The statute does not require the filing of any
deed by the parties. Del. Code Ann. tit. 6, sec. 17-211 (1998)

Determination

Florida law requires the payment of documentary stamp tax
on instruments conveying real property. However, if the transfer
occurs by operation of another state's laws, the response set
forth in the following paragraph is applicable in this instant
case.

Provided that the Limited Partnership's merger with the
Delaware Limited Partnership complies with Delaware law, no
documentary stamp tax will be due in connection with the
transfer of the Florida real property pursuant to a statutory
merger when the real property is transferred by operation of the
Delaware limited partnership merger statute

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,

Joy B. Eldred, C.P.A.
Tax Law Specialist

Technical Assistance and Dispute Resolution
Office of the General Counsel

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