STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST AUGUSTINE FEDERAL SAVINGS ) AND LOAN ASSOCIATION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-974

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Michael R.N. McDonnell, Hearing Officer for the Division of Administrative Hearings, at 10:00 am., on August 12, 1977, in the Conference Room at the Offices of Upchurch & Upchurch, St. Augustine, Florida.

Hamilton D. Upchurch, Esquire, appeared as counsel for the Petitioner, and Daniel C. Brown, Esquire, appeared as counsel for the Respondent.

The issue to be decided is whether an Assumption Agreement and Release of Seller entered into by Petitioner is subject to a documentary stamp tax under Ch. 201, Florida Statutes, as a "written obligation to pay money."

FINDINGS OF FACT

1. On December 27, 1976, Petitioner entered into an Assumption Agreement and Release of Seller, a copy of which is appended to this recommended order as Exhibit "A". The agreement contains, in writing, the obligation of Flagler Hospital, Inc., to pay Petitioner the sum of $238,464,52. The document is not a renewal of an existing obligation.

   
   

2. On April 25, 1977, Respondent gave Petitioner notice that a penalty and interest under Section 201.08, Florida Statutes, had been assessed against it in the amount of $729.42 because the agreement constituted a note or written obligation to pay money. The agreement was executed in the State of Florida.

   No documentary stamp taxes have been paid regarding the agreement. The mathematical computation of the tax, penalty and interest is correct.

   
   

3. The agreement represents the assumption of an existing debt between Petitioner and Inter-Medic Health Centers, Inc., by Flagler Hospital, Inc. The original debt is evidenced by a note and mortgage dated February 11, 1976. Documentary stamp taxes in the amount of $360.00 were paid as to the original note. No additional indebtedness was created by the agreement, but the agreement releases the original obligor, Inter-Medic Health Centers, Inc., from liability.

   CONCLUSIONS OF LAW

   
   

4. The Assumption Agreement and Release of Seller constitutes a written obligation to pay money and as such, is subject to taxation by the provisions of Section 201.08, Florida Statutes. The agreement does not continue the identical contractual obligations of the original promissory note and hence is not exempt by the provisions of Section 201.09, Florida Statutes.

   
   

5. Rule 12A-4.53(19), F.A.C., which provides that a mortgage assumption is subject to the documentary stamp tax where the original maker of a note and mortgage is released from his obligation operates to subject the agreement in the instant case to the documentary stamp tax.

   
   

6. Petitioner, as a party to the taxable transaction between itself and Flagler Hospital, Inc., is liable for the assessed documentary tax.

Based on these findings of facts and conclusions of law, it is RECOMMENDED that the assessment be upheld.

DONE and ENTERED this 13th day of September, 1977, in Tallahassee, Florida.

MICHAEL R.N. McDONNELL

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Daniel C. Brown, Esquire Department of Legal Affairs The Capitol

Tallahassee, Florida 32304

Hamilton D. Upchurch, Esquire Post Office Box 170

St. Augustine, Florida 32084

Docket for Case No: 77-000974

Orders for Case No: 77-000974