STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT W. CRAWFORD, )

)

Petitioner, )

)

vs. ) CASE NO. 78-184

) STATE OF FLORIDA, DEPARTMENT ) OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Ft. Lauderdale, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on June 9, 1978. By agreement of the parties, entry of a recommended order was withheld, pending disposition of Rainey v. State Department of Revenue, 353 So.2d 207 (Fla. 1st DCA 1977); cert den. sub. non.

State Department of Revenue v. Rainey, 365 So.2d 715 (Fla. 1978) and State Department of Revenue v. Miami National Bank, No. 53,136 (Fla., June 7, 1979).

APPEARANCES

For Petitioner: Robert W. Crawford, Esquire

in propria persona

1215 East Broward Boulevard Fort Lauderdale, Florida 33301

For Respondent: Edwin J. Stacker, Jr., Esquire

Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32301

By notice of proposed assessment dated July 18, 1977, respondent alleged that petitioner was liable for eighty-three and eighty-five hundredths dollars ($83.85), together with interest and penalty, on account of the recordation on February 8, 1977, of a mortgage modification agreement in the official records of Broward County.

FINDINGS OF FACT

1. On July 17, 1975, petitioner and his wife executed a mortgage encumbering certain real property in Broward County and a promissory note in the principal amount of fifty-seven thousand five hundred dollars ($57,500.00) in favor of William J. and Carol M. Galione. Respondent's exhibit No. 1. This instrument was recorded the same day in the official records of Broward County. At that time, petitioner paid documentary stamp tax in the amount of eighty-six and one quarter dollars ($86.25); and intangible tax in the amount of one hundred fifteen dollars ($115.00). Petitioner's exhibit No. 1.

2. On February 1, 1977, petitioner and his wife entered into a mortgage modification agreement by which the same real property was encumbered as security for indebtedness to the Galiones in the principal amount of ninety- thousand dollars ($90,000.00). Joint exhibit No. 1. By the same instrument, the monthly payments petitioner and his wife had originally undertaken to pay the Galiones were increased and a new maturity date for the balance was established. On February 8, 1977, this instrument was recorded in the official records of Broward County. In connection with this recordation, petitioner paid documentary stamp tax in the amount of fifty-one and fifteen hundredths dollars ($51.15) and intangible tax in the amount of sixty-eight and thirteen hundredths dollars ($68.13).

   
   

   CONCLUSIONS OF LAW

   
   

3. Florida levies a documentary stamp tax on written obligations to pay money, like the mortgage modification agreement petitioner and his wife executed in the present case, at the rate of "15 cents on each $100 or fraction thereof. Section 201.08, Florida Statutes (1977). The documentary stamp tax on the ninety thousand dollar ($90,000.00) instrument petitioner and his wife executed amounts, therefore, to one hundred thirty-five dollars ($135.00), of which petitioner paid only fifty-one and fifteen hundredths dollars ($51.15), leaving a balance due of eighty-three and eighty-five hundredths dollars ($83.85).

   
   

4. Petitioner contends that the modification agreement should be viewed, however, as two distinct things: the renewal of the original indebtedness and the creation of additional indebtedness. With respect to the renewal portion, petitioner argues, Section 201.09, Florida Statutes (1977), operates to exempt the modification agreement from documentary stamp tax. Writing for a six man majority, Mr. Justice Sundberg recently rejected this interpretation of Section 201.09, Florida Statutes (1977):

It is clear from a reading of these enactments that the legislature intended only to exempt renewal notes which do not enlarge the original indebtedness.

Respondents' attempted construction of the scope of the exemption afforded by section

201.09 ignores the plain language of that section as well as section 201.08(1). By its express terms section 201.08(1), Florida Statutes (1975), imposes a documentary

stamp tax "[on promissory notes . . . and for each renewal of the same . . ." This straightforward and unambiguous declaration of the objects of documentary stamp taxation adopted in 1931 was followed in

1937 by equally clear language now appearing in section 201.09, Florida Statutes (1975), which provided exemption for a renewal promissory note which "only extends or continues the identical contractual obligations of the original promissory

note . . . and without enlargement in any way of said original contract and obligation . . ." (Emphasis supplied.) The present renewal note in the amount of

$15,000 increased the original $10,000

note by $5,000. Consequently, the renewal portion of the note does not fall within the exemption provided by section 201.09, Florida Statutes (1975). State Department of Revenue v. Miami National Bank, No.

53,136 at p. 3. (Fla., June 7, 1979)

(Footnotes omitted)

The mortgage modification agreement executed by petitioner and his wife is fully subject to taxation under Section 201.08, Florida Statutes (1977).

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That respondent's proposed assessment against petitioner be made final. DONE and ENTERED this 3rd day of July, 1979, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Edwin J. Stacker, Jr., Esquire Assistant Attorney General

The Capitol, Room LL04 Tallahassee, Florida 32301

Robert W. Crawford, Esquire 1215 East Broward Boulevard Fort Lauderdale, Florida 33301

Docket for Case No: 78-000184

Orders for Case No: 78-000184