Did trusts administered by a Florida-headquartered bank through out-of-state trustee offices have a Florida taxable situs for intangible tax?

Plain-English summary

Florida found that the trusts administered through the bank's out-of-state agency offices did not have a Florida taxable situs, even though the federal savings bank itself was headquartered in Florida.

The out-of-state offices were named as trustees, originated and managed the trusts outside Florida, kept files and internal records showing their out-of-state status, and used trust instruments governed by the law of the state where each office was located. Books and records were maintained at those offices or at an affiliated service corporation outside Florida.

Common questions

Did the bank's Florida headquarters create trust situs by itself? No, under the facts described.

Which facts supported out-of-state situs? The named trustee offices, origin, day-to-day management, governing law, and location of books and records were all outside Florida.

Would different administration or recordkeeping change the result? The TAA did not decide other arrangements; its conclusion depended on the stated facts.

Citations and references

• Fla. Stat. §§ 199.052 and 199.175
• Fla. Admin. Code r. 12C-2.006(3)
• Fla. Stat. § 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99C2-002

Original ruling text

SUMMARY

Based upon the information and documents submitted that
specify that Bank Corp.'s out-of-state Agency Offices are
named as trustees, it is the opinion of this office that
the trusts administered and managed by those out-of-state
Agency Offices do not have a Florida taxable situs. This
conclusion is based upon the following: the naming of the
out-of-state Agency offices as trustees; the trust will
originate from the Agency Offices location outside the
state; all trust files and internal reports and memoranda
will reflect the out-of-state origin and status of the
trusts established at the Agency Offices; and the trust
instruments will continue to be governed by the laws of the
state in which the respective Agency offices will be
located. In addition, the books and records pertaining to
the trusts will be maintained either at the out-of-sate
Agency Offices or at Bank Corp.'s services affiliate
corporation located outside of Florida. Therefore, under
the circumstances described, the trusts are not subject to
the intangible tax.

Jan 06, 1999

RE: Technical Assistance Advisement No. 99(C)2-002
Intangible Tax; Trust Situs
Section 199.052, F.S.
XXX ("Bank Corp.")

Dear :

This is in response to your recent request for a Technical
Assistance Advisement in which you ask if the Florida intangible
tax is applicable to certain trusts which have been established
at Agency Offices of Bank Corp.

FACTS PRESENTED BY TAXPAYER

Bank Corp. is a federal savings bank organized under
Federal law and domiciled (headquartered) in Florida. Pursuant
to applicable provisions of the Home Owners Loan Act, 12 U.S.C.,
1461, et seq., and the regulations of the Office of Thrift
Supervision (the "OTS"), Bank Corp. has authority to exercise
trust powers and to provide various fiduciary services
(including investment advisory and investment management
services) to its customers. The trust powers and the fiduciary
services are collectively referred to herein as the "Trust
Business". Bank Corp.'s parent company (a non-Florida
corporation) wishes to merge certain of its state-chartered
trust company subsidiaries located in various states other than
Florida with and into Bank Corp. for the purposes of
consolidating the administration of Trust Business provided
through such offices. Upon the consummation of such
transactions, Bank Corp. would assume the existing business of
the trust companies, and the offices of the trust companies
would become trust "Agency Offices" of Bank Corp. Subject to
prior approval of the OTS, Bank Corp. would be authorized to
conduct the same Trust Business at the Agency Offices as may be
conducted under state law by state-chartered banks or trust
companies located in the same states as the Agency Offices.
Although the Agency Offices would be similar to branch offices
in that they would not be established as separate legal
entities, they would be limited to the conduct of Trust
Business, as the separate trust companies are presently limited,
and they would not have the ability to accept non-fiduciary
deposits or transact other banking business without being
converted to branches with the prior approval of the OTS.

As a result of the proposed merger transactions, the Trust
Business formerly carried on by the out-of-state trust company
affiliates of Bank Corp. will be carried on by Bank Corp.
through the Agency Offices. Additionally, it is anticipated
that the Agency Offices will continue to originate new out-ofstate Trust Business in essentially the same manner as at
present. In this connection, the solicitation of new Trust
Business by the Agency Offices will occur outside of Florida,
the settlors of all new trusts established by the Agency Offices
will be residents of states other than Florida, and the trust
instruments will be governed by the laws of states other than

Florida. Trusts generated through the Agency Offices will be
managed, on a day-to-day basis, by the relationship managers
(and other personnel) located out-of-state in the Agency Offices
in accordance with policies and procedures developed by the
Trust and Investment Committee of Bank Corp., and approved by
the Board of Directors of Bank Corp.

The Trust and Investment Committee is comprised of
employees of Bank Corp. and its affiliate, a non-Florida
commercial bank. A majority of the members of the Trust and
Investment Committee currently are and will continue to be
employed and reside outside of Florida.

The Trust and Investment Committee is responsible for
developing an implementing policy with respect to:

1. The acceptance of new fiduciary appointments;

2. The closing of accounts;

3. Discretionary distributions of principal and income;

4. Determination of investment policies; and

5. Review of accounts to determine compliance with
   investment and other policies.

Investment decisions (such as the purchases and sales of
assets inside trust accounts) will be made by relationship
managers and personnel located in the out-of-state Agency
Offices in accordance with policies and procedures developed by
the Trust and Investment Committee and approved by the Board of
Directors.

Administrative services relating to Bank Corp.'s Trust
Business will be provided from Bank Corp.'s bank services
affiliate corporation located outside of Florida. These
services will include the following:

1. Data input and processing;

2. General bookkeeping functions;

3. Generation of reports;

4. Collection and processing of fees;

5. Processing of securities trades; and

6. Funds transfer services.

Staff at Bank Corp.'s main office in Florida will be
responsible for establishing procedures regarding the delivery
of the administrative services and for monitoring the delivery
of such services.

All trusts managed from Bank Corp.'s Agency Offices,
whether acquired from the out-of-state trust affiliates pursuant
to the proposed merger transactions or developed as new business
by the Agency Offices, will have their origin outside of
Florida. Pursuant to Bank Corp.'s operating policies and
procedures, all trust files and internal reports and memoranda
will reflect the out-of-state origin and status of the trusts
established at the Agency Offices, and trust instruments will
continue to be governed by the laws of the states in which the
respective Agency Office will be located. The books and records
pertaining to the Trust Business will be maintained either at
the Agency Offices or at Bank Corp.'s bank services affiliate
corporation located outside of Florida.

REQUESTED RULING

Your request poses the question whether the trusts
established at the Agency Offices as described herein have no
Florida tax situs, and therefore are not subject to the Florida
intangible tax.

PROVISIONS OF LAW

Section 199.052, F.S., requires that every person that
owns, manages, or controls intangible personal property having a
taxable situs in Florida file an intangible personal property

tax return. Under s. 199.175, F.S., intangible personal property
has a taxable situs when it is owned, managed, or controlled by
a person having their residence or principal place of business
in this state. Rule 12C-2.006(3), F.A.C., provides that the
taxable situs of a trust shall be in Florida if either (a) the
trustee's usual place of business where the books and records
pertaining to the trust are kept is in Florida, or (b) if the
trustee has no principal place of business, then taxable situs
is determined by reference to the residence of the trustee.

DETERMINATION

Based upon the information and documents submitted that
specify that Bank Corp.'s out-of-state Agency Offices are named
as trustees, it is the opinion of this office that the trusts
administered and managed by those out-of-state Agency Offices do
not have a Florida taxable situs. This conclusion is based upon
the following: the naming of the out-of-state Agency offices as
trustees; the trust will originate from the Agency Offices
location outside the state; all trust files and internal reports
and memoranda will reflect the out-of-state origin and status of
the trusts established at the Agency Offices; and the trust
instruments will continue to be governed by the laws of the
state in which the respective Agency offices will be located.
In addition, the books and records pertaining to the trusts will
be maintained either at the out-of-sate Agency Offices or at
Bank Corp.'s services affiliate corporation located outside of
Florida. Therefore, under the circumstances described, the
trusts are not subject to the intangible tax.

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 and your request
are public records under Chapter 119, F.S. Your name, address,
and any other details which might lead to identification of the
taxpayer must be deleted by the Department before disclosure.
In an effort to protect the confidentiality of such information,
we request you notify the undersigned in writing within 15 days
of any deletions you wish made to the request or the response.

Sincerely,

Joy B. Eldred, C.P.A.
Tax Law Specialist
Technical Assistance and Dispute Resolution
Office of the General Counsel

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