Current through Reg. 50, No. 187; September 24, 2024
(1)
(a) Notes and Written Obligations to Pay
Money: The amount upon which the tax is measured, when the documents provide
for a discount of unearned interest or finance charges in exchange for early
payment, is the amount financed or principal indebtedness. The payment of
interest or finance charges is a contingent obligation and is not taxable
(Department of Revenue v. North Port Bank, 354 So. 2d 463 (Fla. 1st DCA 1978)).
Miscellaneous charges, such as credit life insurance, which are included in the
amount financed or principal indebtedness are not contingent obligations at the
time the note is executed and are taxable.
(b) Mortgages and Other Evidences of
Indebtedness: The tax required to be paid on mortgages and other evidences of
indebtedness filed or recorded in this state is calculated on the indebtedness
or obligation secured by the mortgage, regardless of whether the indebtedness
is contingent.
(2) Retail
Installment Contract: "Retail installment contract" or "contract" means an
instrument or instruments reflecting one or more retail installment
transactions entered into in this state pursuant to which goods or services may
be paid for in installments. It does not include a revolving account or an
instrument reflecting a sale pursuant thereto.
(3) Revolving Charge Accounts: "Revolving
account" or "account" means an instrument or instruments prescribing the terms
of retail installment transactions which may be made thereafter from time to
time pursuant thereto, under which the buyer's total unpaid balance thereunder,
whenever incurred, is payable in installments over a period of time and under
the terms of which a finance charge is to be computed in relation to the
buyer's balance from time to time.
(4) Instruments Deemed Retail Installment
Contract: An instrument which is in fact a retail installment contract is
taxable under Section
201.08(1),
F.S., even though the instrument may be designated a revolving charge
account.
(5) Taxable Documents: As
used in these regulations, "taxable documents" includes promissory notes,
nonnegotiable notes, written obligations to pay money, assignment of salaries,
wages, or other compensation, mortgages, trust deeds, security agreements, and
other evidences of indebtedness filed or recorded in the state, and for each
renewal of the same, unless such renewal would be exempt under Section
201.09, F.S.
(6) Written Obligation or Promise to Pay
Money:
(a) The tax levied by Section
201.08(1),
F.S., is an excise tax on the promise to pay and the terms and certainty of
payment are not material (Plymouth Citrus Growers Ass'n v. Lee, 157 Fla. 893,
27 So. 2d 415 (1946)). Where a grantee accepts a deed containing the assumption
of a mortgage, said assumption constitutes a promise to pay and is taxable
(Alabama-Florida Company v. Mays, 111 Fla. 100, 149 So. 61 (1933); 1961 Op.
Att'y. Gen. Fla. 061-8 (January 23, 1961)). If the holder of a contract can
recover a judgment by proving the contract and non-payment, the contract
constitutes a promise to pay and is taxable. (Maas Brothers, Inc. v. Dickinson,
195 So. 2d 193 (Fla. 1967))
(b)
Taxability of a written obligation to pay money is determined from the form and
face of the document.
1. Whether a document
is taxable is determined by reference to that document and any other document
or documents expressly incorporated therein.
2. A document does not expressly incorporate
another document by implication or by mere reference and description of the
other document.
3. Express
incorporation occurs when words in a document under examination provide that
another document or documents are incorporated into the document under
examination.
4. Following are
examples of terminology whereby a document is expressly incorporated into the
document under examination.
a. [document] is
incorporated herein;
b. [document]
the terms of which are incorporated herein;
c. [document] is made a part
hereof;
d. [document] is a part of
[this document];
e. The agreement
consists of [this document] and [separate document] the same as if it were
fully set forth herein;
f.
[document] shall become a part of [document];
g. [document] and [document] constitute a
single document.
5.
Following are examples of terms in a document under examination that do not
expressly incorporate another document, unless the document under examination
otherwise contains language that meets the criteria of subparagraphs (b)3. or
(b)4. above.
a. In the attachment
hereto;
b. Is subject to;
c. Is subject to the terms of;
d. Pursuant to;
e. Pursuant to the terms of;
f. As set forth in;
g. Reference is made to;
h. Governed by.
6. An integration clause or a default remedy
clause, does not, by itself, expressly incorporate another document, unless the
clause contains language that meet the criteria of subparagraph
12B-4.052(6)(b)
3. or 4., F.A.C., above.
(7) Instruments Deemed Mortgages: "All
conveyances, obligations conditioned or defeasible, bills of sale or other
instruments or writing conveying or selling property, either real or personal,
for the purpose or with the intention of securing the payment of money. . .
shall be deemed and held mortgages. . . ." (Section
697.01, F.S.) (See 1955 Op.
Att'y. Gen. Fla. 055-287 (Oct. 31, 1955)).
(9) Interest: Where borrower promises to pay
both the amount financed and interest during the term of the note, the
borrower's only absolute obligation or indebtedness at the time he signs such
note is for the amount financed and not for unearned interest. (Department of
Revenue v. North Port Bank, 354 So. 2d 463 (Fla. 1st DCA 1978))
(10) Open-end and Future Advance Mortgages:
Tax is due on the mortgage when filed or recorded in the state based upon the
maximum indebtedness secured, exclusive of any amount that may be covered in a
future advance clause. Regardless of whether the indebtedness secured by the
mortgage is contingent, the mortgage is subject to tax based upon the maximum
amount of the indebtedness secured. Each future advance made under a future
advance clause is taxable when such future advance is made. The mortgage shall
not be enforceable in any court in this state, as to the future advance, until
the tax due on each advance has been paid.
(11) Adjustable Rate Mortgages: Tax is due at
the time of recordation or execution on an adjustable rate mortgage based upon
the principal amount of the note it secures, which may include accruing
interest added to the principal if the increased amount is a stated or
computable amount at the time of recordation or execution. A renewal of an
adjustable rate note or mortgage is taxable only on the amount the principal is
increased if all other requirements of Section
201.09(3),
F.S., are met.
(12) Renewals: Each
renewal, as defined in Section
201.08(5),
F.S., of a written obligation to pay money, or of a mortgage or other security
agreement, is taxable, unless it satisfies the requirements of Section
201.09(1), F.S.
(a) Except as provided in paragraph (f), a
written agreement, such as a loan agreement, that alters or modifies the
contract or obligation of an original promissory note, mortgage, trust deed,
security agreement, or other evidence of indebtedness, by adding one or more
obligors, increasing the principal balance, changing the interest rate,
changing the maturity date, changing the payment terms, or assuming the terms
of the original contract or obligation, is a renewal of the original note,
mortgage, trust deed, security agreement, or other evidence of indebtedness. A
renewal that does not add obligor(s) and merely changes the interest rate, the
maturity date, or the payment terms is not subject to tax, provided tax was
paid on the original document and the original document is attached to the
renewal.
(b) A renewal of a term
obligation is subject to tax on the amount of the increase of the unpaid
principal balance, with a maximum tax due of $2, 450 on the aggregate of the
original obligation and all renewals thereof that satisfy the requirements of
Section 201.09(1), F.S.
A term loan with periodic disbursements, such as a construction loan, may be
renewed for the undisbursed amount, together with the unpaid balance of the
amount that was previously disbursed, without payment of additional tax.
Cross Reference - paragraph (e) of this
subsection.
(c) A renewal of
a revolving obligation is subject to tax on the amount of the increase over the
original face amount of the original obligation with a maximum tax due of $2,
450 on the aggregate of the original obligation and all renewals thereof that
satisfy the requirements of Section
201.09(1), F.S.
Cross Reference - paragraph (e) of this
subsection.
(d) Under
paragraphs (b) and (c), a separate side note is not required. The principal
balance or original face amount can be indicated by a notation on the renewal
document, by reference to the document being renewed, or by other proof
retained by the borrower(s) or lender.
(e) The maximum tax due on an original
obligation and all renewals thereof that satisfy the requirements of Section
201.09(1),
F.S., is $2, 450. An obligation upon which the maximum tax due of $2, 450 was
paid may be renewed, so long as the requirements of Section
201.09(1),
F.S., are met, without additional tax assessed. The $2, 450 tax limitation does
not apply to a mortgage, security agreement, or other lien filed or recorded in
Florida.
1. Example: The proper amount of tax
of $2, 450 was paid on a term obligation of $1, 000, 000, that was executed in
Florida on July 1, 2002, and was not secured by a mortgage, security agreement,
or other lien filed or recorded in Florida. On August 1, 2002, the obligation
was renewed, meeting the requirements of Section
201.09(1),
F.S., and providing for a $500, 000 increase of the unpaid principal balance.
No additional tax was due on the renewal, since the maximum aggregate tax of
$2450 was paid on the original obligation. Each renewal thereafter is not
subject to additional tax, so long as each renewal meets the requirements of
Section 201.09(1),
F.S.
2. Example: The proper amount
of tax of $1, 750 was paid on a revolving obligation of $500, 000, that was
executed in Florida on July 1, 2002, and was not secured by a mortgage,
security agreement, or other lien filed or recorded in Florida. On August 1,
2002, the obligation was renewed, meeting the requirements of Section
201.09(1),
F.S., and providing for a $500, 000 increase above the original face amount of
the original obligation. Additional tax of $700 was due on the renewal,
bringing the total tax paid on the original obligation and all renewals thereof
to the maximum aggregate amount of $2, 450. Each renewal thereafter is not
subject to additional tax, so long as each renewal meets the requirements of
Section 201.09(1),
F.S.
3. Example: The proper amount
of tax of $1750 was paid on a revolving obligation of $500, 000, that was
executed in Florida on July 1, 2002, and was not secured by a mortgage or other
lien filed or recorded in Florida. On August 1, 2002, the obligation was
renewed, meeting the requirements of Section
201.09(1),
F.S., and providing for a $100, 000 increase above the original face amount of
the original obligation. Additional tax of $350 was due on the renewal,
bringing the aggregate tax paid on the original obligation and this renewal to
$2, 100. Additional tax of $350 will be due on any renewal or renewals
thereafter, where the amount of the increase or increases equals or exceeds
$100, 000 (the amount of the increase or increases required to bring the
aggregate tax to $2, 450).
4.
Example: The proper amount of tax of $2, 450 was paid on a term obligation of
$700, 000, that was executed in Florida on July 1, 2002, and was secured by a
mortgage recorded in Florida. On August 1, 2002, the obligation was renewed,
meeting the requirements of Section
201.09(1),
F.S., and providing for a $500, 000 increase of the unpaid principal balance.
The mortgage was spread to secure the renewal. Additional tax of $1, 750 was
due on the mortgage spreader, since there is no limit on the amount of tax due
on a mortgage.
(f)
Notwithstanding paragraphs (a), (b) and (c), above:
1. A renewal note that adds one or more
obligors is subject to tax on the full amount of the obligation. The maximum
tax due on a renewal that adds one or more obligors is $2, 450.
2. An assumption of an existing obligation is
subject to tax on the full amount of the note assumed. The maximum tax due on
an assumption of an existing obligation is $2, 450.
3. A renewal note is subject to tax on the
full amount of the obligation, with a maximum tax due of $2, 450, if the proper
tax was not paid on the instrument being renewed.
a. A renewal of a promissory note is subject
to tax on the full amount of the obligation, with a maximum tax due of $2, 450,
if the note being renewed is not attached with cancelled stamps or an
appropriate notation showing full payment of tax imposed by law.
b. A renewal mortgage or other security
document shall state the official book and page number of the original mortgage
or other security document being renewed which evidences prior payment in full
of stamp tax due, or shall have attached to it for recording the original note
or a copy thereof with evidence of proper stamp tax paid. Unless this evidence
is present, the renewal mortgage is subject to tax on the full amount of the
obligation.
4. If the
original note and mortgage is satisfied, an instrument that might otherwise
appear to be a renewal of the original note and mortgage is taxable on the full
amount of the obligation. (In this case, the instrument represents a new
obligation.)
(g) A
written agreement that does not modify the terms of the indebtedness evidenced
by a promissory note, mortgage, trust deed, security agreement, or other
evidence of indebtedness in a way described in paragraph (a) is not a renewal.
Examples of modifications to documents that are not renewals include those
given or recorded to:
1. Correct
errors;
2. Modify covenants,
conditions, or terms unrelated to the debt;
3. Sever a lien into separate
liens;
4. Provide additional or
substitute security for the indebtedness;
5. Consolidate indebtedness or
collateral;
6. Add, change, or
delete guarantors;
7. Substitute a
new mortgagee or payee; or
8.
Change only the interest rate, made as the result of the discontinuation of an
index to which the original interest rate is referenced.
(h) When a promissory note references terms
(interest rate, payments terms, or maturity date) contained in a loan agreement
and neither document expressly incorporates the other, a modification or
amendment of such terms contained in the loan agreement is not treated as a
renewal of the promissory note. However, if the modifying document amends the
promissory note itself in a way described in the definition of a renewal in
paragraph (a), then the modifying document is a renewal.
(13) Line of Credit Mortgages: The tax
required on a mortgage recorded to secure a revolving line of credit is
calculated on the maximum amount of the secured line of credit, as determined
from the face of the recorded mortgage or from the credit documents
incorporated therein by reference, regardless of whether the obligation to
repay may be contingent upon the advancement of sums under the line of credit.
(Barnett Bank v. Department of Revenue, 571 So. 2d 527 (Fla. 3d DCA 1990);
Department of Revenue v. Lincoln Pointe Associates, 544 So. 2d 291 (Fla. 1st
DCA 1989))
Rulemaking Authority
201.11(1),
213.06(1) FS.
Law Implemented 201.08,
201.09
FS.
New 8-18-73, Formerly 12A-4.52, Amended 8-8-78, 3-12-79,
2-3-80, 3-30-81, 8-29-84, Formerly 12B-4.52, Amended 12-5-89, 2-13-91,
10-18-94, 12-30-97, 7-28-98, 1-4-01, 5-4-03,
5-23-22.
