The Issue Whether the Petitioner is liable for documentary stamp taxes and interest to the Respondent totaling $80,405.54, plus additional interest accruing from the date of the assessment, as reflected in the Notice of Proposed Assessment dated January 24, 2011.
Recommendation Based on the foregoing, Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order finding that Jorge Ramos does not owe documentary stamp taxes on the October 18, 2007, Warranty Deed and withdrawing the assessment in the amount of $80,405.54, plus interest at $11.89 per day from January 25, 2011. DONE AND ENTERED this 1st day of June, 2012, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of June 2012.
Findings Of Fact On October 29, 1973, R. Bartow Rainey and J. Howard Nichols leased an unimproved parcel of land located in Tallahassee, Florida, from William Welsh Boyd and Patricia Boyd McLain. The term of the lease was for a period of 30 years at an annual base rental and a percentage of annual gross income derived from the property. Article 10.03 provided in part: "All buildings, alterations, rebuildings, replacements, changes, additions, improvements, equipment and appurtenances on or in the premises at the commencement of the term, and which may be erected, installed or affixed on the premises during the term, shall be deemed to be and immediately become part of the realty . . ." Article 15 contemplated the securing of a mortgage on the lease-hold interest by the tenants which would be a first lien upon both the fee and leasehold estates by virtue of the landlord joining therein up to $2,500,000.00 on a loan having a term not in excess of 30 years, and further providing that the mortgage loan must be one where the proceeds were to be used to construct improvements mentioned in the lease. The aforesaid lease was recorded in the public records of Leon County, Florida, on November 14, 1973 (Exhibit 3). The lessees of the property executed a promissory note on November 13, 1973, payable to the Commonwealth Corporation, Tallahassee, Florida, in the principal sum of$1,800,000.00, secured by a mortgage of their leasehold interest of the same date which also was duly recorded in the public records of Leon County. The lessees thereafter improved the property constructing apartment buildings consisting of 200 to 500 units (Exhibit 4, Counsel for Petitioners). By an amendment to the aforementioned note and mortgage, dated May 22, 1975, Schumacher Mortgage Company, Inc., a Delaware Corporation, succeeded to the rights of Commonwealth Corporation as mortgagee, and the principal sum of the mortgage was increased to $1,850,000,00 (Exhibit 4). The lease then was assigned to Petitioners on July 1, 1975, subject to the terms and conditions of the lease which the assignees assumed and agreed to discharge, and they also mortgaged the leasehold estate as security for a promissory note, dated July 1, 1975, in the principal amount of $458,000.00. The mortgage was entered into on June 3, 1975, with R. Bartow Rainey and J. Howard Nichols as mortgagees. Also on July 1, 1975, Rainey and Nichols as "grantor" executed a warranty deed to Petitioners purporting to convey in fee simple the improvements located on the real property in question subject to the existing first mortgage of November 13, 1973 (Exhibit 2, 7, 8). By Notice of Proposed Assessment, dated October 14, 1975, Respondent seeks to collect from Petitioners documentary stamp tax under Section 201.02(1), Florida Statutes, in the amount of $5,549.70 and a penalty in a like amount for a total of $11,099.40. The tax liability was levied against the aforesaid assignment of lease and warranty deed, based upon consideration of $550,000.00 cash and for the assignment, and $1,850.000.00 under the amendment to the note and mortgage, for a total taxable consideration of $2,400,000.00. The base tax was $7,200.00, less tax previously paid in the amount of $1,650.30, leaving a sum of $5,549.70 as tax due, plus a penalty in a like amount. The parties stipulated that the computation of the tax and the amount of delinquency as assessed are correct assuming that the tax and penalty are due and owing.
Recommendation That Petitioners be held liable for an assessment of $11,099.40 for delinquent documentary stamp taxes and penalty under Chapter 201, Florida Statutes. DONE and ORDERED this 17th day of May, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Edgar M. Moore, Esquire Smith and Moore, P.A. P. O. Box 1169 Tallahassee, Florida 32302 Patrician S. Turner, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
Findings Of Fact The individual taxpayers purchased a motel giving not secured by a mortgage on the motel as a portion of the consideration paid to the grantors. The individual taxpayers subsequently conveyed an undivided one-half interest in the motel to 6804 East, Inc., a corporation wholly owned by the individual taxpayers. Although no consideration was recited in the conveyance, the corporation assumed responsibility for 50 percent of the mortgage indebtedness which was stipulated to have been $96,250. Subsequently, 6804 East, Inc. transferred the property to 6804 Motel, Inc., another corporation wholly owned by the individual taxpayers. Again, no consideration was recited in the conveyance; however, 6804 Motel, Inc. assumed responsibility from 6804 East, Inc. for 50 percent of the indebtedness on the property. The Department of Revenue asserts that documentary stamp taxes are due on both of the transfers pursuant to Section 201.02, Florida Statutes, there having been only nominal documentary stamp taxes placed on the documents. The individual taxpayers and 6804 Motel, Inc., controvert the assessment of taxes on the basis that there was no consideration because the individual taxpayers were never relieved of any responsibility for the debt because they fully owned the two corporations and because they had such an equity investment in the purchase that they could not stand aside and see the corporations default. 6804 Motel, Inc. also questions the assessment of the taxes against it as the grantee in the transfer from 6804 East, Inc. In support of their arguments, the taxpayers introduced evidence that the individual taxpayers intended, prior to purchase, to convey an interest in the motel to 6804 East, Inc., and that after the transfer to 6804 Motel, Inc., the individual taxpayers paid all deficit operating expenses for the motel.
Recommendation Based upon the foregoing findings of fact and conclusions of law the Hearing Officer recommends that the petition of the taxpayers in this case is denied and that the documentary stamp taxes, as proposed in assessments M-65 and M-66, together with a 25 percent penalty and 1 percent interest per month on the unpaid tax be assessed. DONE AND ORDERED this 3rd day of August, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of August, 1978. COPIES FURNISHED: Ralph Monroe 7211 North Dale Mabry Tampa, Florida 33614 Maxie Broome, Jr., Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304
The Issue Whether Documentary Stamp Taxes pursuant to Section 201.08(1), Florida Statutes, are due on that part of a written obligation to pay money which purports to renew, extend, restate, modify and consolidate the borrower's pre- existing debt to the same lender, where another part of the written obligation to pay money makes a new or additional loan to the borrower.
Findings Of Fact On October 1, 1981, a "Consolidated and Restated Revolving Loan Agreement" ("Agreement") was executed by Flagship National Bank of Miami ("Bank" or the "lender"), Petitioner (or the borrower), and Alberto Vadia and Rosario Vadia (the guarantors). The Documentary Stamp Tax consequences of this Agreement (and the obligation to pay money which it evidences) are what is at issue here. By this Agreement, the Bank extended a loan, which Petitioner promised to repay, in the principal amount of $1,900,000.00, of which $818,624.69 remained outstanding under previous loans which the Bank had extended to Petitioner under 1971, 1975, and 1978 loan agreements. The balance of the loan -$1,081,375.31 - was a new or additional loan. The Agreement, in pertinent part, provides: Bank, Borrower and Guarantors desire to enter into this Consolidated and Restated Revolving Loan Agreement and the various documents and instruments incorporated herein by reference to increase the maximum principal amount of the loan to One Million Nine Hundred Thousand Dollars ($1,900,000) and extend the term thereof, secured and guaranteed in the same manner as the prior loans and to consolidate into one document the 1971 Agreement, the 1975 Agreement and the 1978 Agreement. This Consolidated and Restated Revolving Loan Agreement and the documents and instruments incorporated herein by reference constitute a complete restatement, modification, amendment and consolidation of the prior agreements to reflect the parties present intentions and agreements regarding such existing debt and the readvance of a previously amortized portion thereof back to Borrower, and not a novation or substitution of a new debt or obligation for an existing debt or obligation. * * * Such advances as Bank shall elect to make pursuant to the credit facility herein agreed to (and all unpaid sums remaining from the 1971, 1975 and 1978 Agreements which indebtedness shall be represented and renewed by such Note) shall be evidenced by a Consolidated Master Revolving Credit Note in the form attached hereto as Exhibit "C," pursuant to which Borrower promises to pay Bank the sums set forth therein together with interest thereon in accordance with the repayment schedule set forth therein, all as more fully set forth therein, the provisions of which Note are incorporated herein by reference. (e.s.) Documentary Stamp Tax in the amount of $1,622.10 has been paid on that portion of the Agreement representing a new loan or advance. (This represents tax at a rate of $.15 per hundred dollars on $1,081,375.31.) Documentary Stamp Tax has not been paid on that portion of the Agreement which restated, renewed, modified, and consolidated the existing debt or outstanding loan balance of $818,624.69 from the previous 1971, 1975 and 1978 loan agreements. The Department claims Petitioner is obligated to pay Documentary Stamp Taxes in the amount of $1,227.90 (at the rate of $.15 per $100 of amount loaned), plus penalty and interest, on the amount of the outstanding loan balance of $818,624.69 from the 1971, 1975 and 1978 agreements. Petitioner claims that the Documentary Stamp Tax does not apply to the outstanding loan balances carried forward from the three prior agreements or notes. (Petitioner, however, no longer maintains that it is entitled to a refund of Documentary Stamp and Intangible Tax previously paid, as alleged in its initial request for hearing.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department enter a final order assessing Documentary Stamp Tax in the amount of $1,227.90, plus penalties and interest authorized by statute. DONE and ENTERED this 14th day of March, 1986, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1986. COPIES FURNISHED: Francis Marion Pohlig, Esquire 2121 Ponce de Leon Boulevard Suite 240 Coral Gables, Florida 33134 Linda S. P. Lettera, Esquire Department of Legal Affairs Tax Section, Capitol Building Tallahassee, Florida 32301 =================================================================
Findings Of Fact The facts in this case are derived from the exhibits submitted into evidence at the hearing and the testimony of petitioner H.R. Thornton, Jr. The pertinent documents show that a portion of a lot located in the toxin of St. Cloud, Florida, owned by Garold D. Doak, Sr. and Susan E. Doak, his wife, was mortgaged by the Doaks to Peachtree Mortgage Corporation on December 28, 1972, in the amount of $16,850.00. On January 4, 1973, Peachtree Mortgage Corporation assigned the Mortgage to the Hamilton Federal Savings and Loan association of Brooklyn, New York. On February 6, 1976, a lis pendens was filed against the property by the assignee of the mortgage in the Circuit Court of the Ninth Judicial Circuit of Osceola County, Florida, incident to an action to foreclose the mortgage. On March 15, 1976, the Doaks executed quitclaim deeds on the property to Stephene J. Houseman. On April 6, 1976, a final judgement of foreclosure was entered in the Circuit Court of the Ninth Judicial Circuit in favor of Hamilton Federal Savings and Loan Association of Brooklyn, New York. (Exhibit 1-6) On April 27, 1976, Houseman executed a quitclaim deed on the property to petitioners. On April 30, 1976, the Thorntons conveyed their interest in the property by warranty deed to Jaiies Francis Wiczorek and Shirley Lillian Wiczorek, his wife. The deed recited that it was subject to the outstanding mortgage to Hamilton Federal Savings and Loan Association with a principal balance of sec. 16,224.52 which the grantees agreed to assume and pay. The deed further recited a consideration of $4,000.00 and documentary stamp tax in an appropriate amount was paid based on a consideration which included the cash payment and the mortgage amount. On July 30, 1976, the mortgage in question was satisfied. (Exhibits 8-10) Only minimal documentary stamp tax of thirty cents was paid on the quitclaim deed from Houseman to petitioners. Respondent issued a notice of proposed assessment of additional documentary stamp tax in the amount of $48.60, surtax in the amount of $17.60, penalties in like amounts, and interest thereon, for a total of $158.51, on March 21, 1977. The proposed assessment was based on consideration stated to be the existing mortgage on the property in the amount of $16,224.52. On April 29, 1977, petitioners filed their petition for an administrative hearing, challenging the proposed assessment on the grounds that there was no evidence to show the taxable consideration as found by respondent. By an amended and revised notice of proposed assessment, dated April 29, 1977, the amount for documentary surtax, penalty and interest thereon was deleted leaving only the sums relating to documentary stamp tax, penalty, and interest in the amount of $102.30. (Exhibit 8) Petitioner H.R. Thornton, Jr. took the quitclaim deed in question to cancel a $100.00 debt owed him by Houseman. He had no intent to make the mortgage payments or payments or pay any other consideration for the transfer. (Testimony of Thornton)
Recommendation That petitioners be held liable for payment of documentary stamp tax, penalty and interest under Chapter 201, Florida Statutes, as modified herein with respect to the penalty. Done and Entered this 29th day of August, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Daniel C. Brown, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 H. R. Thornton, Jr., Esquire Post Office Box 345 St. Cloud, Florida 32769
Recommendation Based on the foregoing findings of fact and conclusions of law the Hearing Officer recommends that the office of the Comptroller and the Department of Revenue honor the claims for refund of the documentary stamp taxes in the amount of $1,027.50 and the surtax stamp taxes in the amount of $376.75, refunding these amounts to the Petitioner. DONE AND ORDERED this 12th day of September, 1978 in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Maxie Broome Assist Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 G. Kristin Delano, Esquire Post Office Box 180 St. Petersburg, Florida 33731
Findings Of Fact Prior to the bankruptcy of Recreation Corporation of America (RCA), Drexel Properties (Drexel), predecessor in interest to Petitioner Sheridan Ventures, Inc., engaged in negotiations with RCA and Fidelco Growth Investors (Fidelco) for the purchase of some eighty-three acres of land owned by RCA that was located in Hollywood and Dania, Florida. Fidelco held a mortgage on the property in the amount of $2,400,000.00. On January 20, 1976, a bankruptcy judge in the United States District Court for the Southern District of Florida issued an amended order in Case No. 75-16-BK-JE-H, authorizing the trustee in bankruptcy of the estate of RCA, bankrupt, to accept the offer of Drexel to purchase the trustee's equity in the real property of the bankrupt for the sum of $15,000.00, subject to the first lien of Fidelco, taxes, interest, certain costs, and two subordinate liens in the amounts of $5,939.92 and $2,691.50. On January 28, 1976, the trustee executed a Bankruptcy Trustee's Deed conveying the property in question to Petitioner, subject to the Fidelco lien and taxes. Petitioner recorded the aforesaid deed in Broward County on February 27, 1976, and state documentary tax stamps in the amount of $45.00 were paid. (Testimony of Mehallis, Exhibits 1-2, Exhibit D to Petition) Respondent issued a proposed notice of assessment of documentary stamp tax, penalty, and interest in the total amount of $14,807.52 on September 7, 1976, based on a taxable consideration of $2,415,000.00. This sum represented the $15,000.00 cash paid by Petitioner and the $2,400,000.00 existing mortgage on the property. In this assessment, Petitioner was credited with the $45.00 previously paid for documentary tax stamps. An informal conference was held on September 21, 1976, after which a revised assessment in an increased amount was withdrawn when both parties agreed that the subordinate liens had been satisfied out of the $15,000.00 cash given for the deed. Subsequently, Respondent issued Revised Assessment No. 2, dated September 22, 1976, reflecting a sum due of $7,653.30 payable for documentary stamp tax, a like sum as a penalty, and interest for six months and five days in the amount of $471.83, for a total of $15,778.43. It was stipulated by the parties at the hearing that this amount is correctly computed and is the proper amount payable if the Petitioner is deemed liable therefor. (Exhibits A, C, E to Petition, Exhibit 3) At the time Petitioner purchased the trustee's interest in the property, it had no intention of paying Fidelco's full lien because the amount of that mortgage exceeded the fair market value of the land. It intended to use the trustee's deed as a negotiating tool to get a better arrangement with Fidelco. Consequently, it made no payments on the mortgage and, on April 7, 1976, Fidelco filed foreclosure proceedings in the Broward County Circuit Court. Petitioner interposed set-off and a counter claim in an amount exceeding $500,000.00 based on funds it had previously advanced to RCA under a prior contract. (Testimony of Mehallis) A real estate appraisal of the property established its fair market value to be $1,120,000.00 as of January, 1976. (Testimony of Lukacs)
Recommendation That Petitioner be held liable for the proposed assessment of documentary stamp tax, penalty, and interest under Chapter 201, Florida Statutes, in the amount of $15,778.43. DONE and ENTERED this 28th day of April 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 Brian C. Deuschle, Esquire Spear, Deuschle and Curran, P.A. 5554 North Federal Highway Ft. Lauderdale, Florida 33308
Findings Of Fact On January 15, 1975, Gerardo Benesch, Jitka Benesch, H. Albert Grotte, Regina Grotte, Milorad Dordevic, Catalina Dordevic, Milodrag Savovic and Marina Savovic executed an agreement associating themselves in a general partnership, Andean Investment Company. The stated purpose of the partnership was to engage in the business of real estate development, selling, renting, and dealing generally in real estate of all kinds. It was recited in the agreement that, by forming the partnership, the parties wished to reduce their prior expense of managing separate properties through separate managerial agreements. To this end, they transferred certain real estate by quit-claim deed to the partnership, and these properties represented its capital. The agreement provided in Article IV that the net profits or net losses of the partnership would be distributed or chargeable, as the case might be, to each of the partners in percentage proportions based on the amount of their investment in the partnership. The property consisted of warehouses located in Deerfield Beach and Fort Lauderdale, Florida, from which rentals were derived (Petition and Exhibits thereto). All of the properties were encumbered by mortgages of varying amounts and all but two of the quit-claim deeds transferred title subject to the mortgage thereon. Two deeds provided specifically that the partnership assumed the existing mortgage. Although Petitioner's counsel states that this was not intended and was a "scrivener's error", Petitioner partnership has, in fact, made the mortgage payments on all of the properties since their transfer under the aforesaid deeds (Composite Exhibit 1, Stipulation). Petitioner paid only minimal documentary stamp tax on the deeds. Respondent thereafter issued four proposed Notices of Assessment of Documentary Stamp Tax, Surtax, and Penalty against the Petitioner on January 6, 1976, in the total amount of $3,797.00. The tax was computed under Rule 12A-4.13(10)(c), F.A.C., based on transfers of realty (Composite Exhibit 2, Testimony of Dahlem). At the hearing, Petitioner disputed the manner in which Respondent had computed the documentary stamp tax in that each assessment dealt with a husband and wife who held individual percentage interests in the net worth of the partnership. Respondent's computation did not take into consideration the double interest in each assessment. The parties therefore agreed that a recomputation would be made by Respondent and submitted as a late-filed exhibit. This was done and the new computation reflects a total tax liability, including surtax and penalty, in the total amount of $4,053.40 (Composite Exhibit 3).
Recommendation That Petitioner's request for relief from tax liability be denied, and that Petitioner's liability for documentary stamp tax, surtax, and penalties in the total amount of $4,053.40 be sustained. DONE and ORDERED this 26th day of May, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 Allan F. Meyer, Esquire Suite 1500 Post Office Box 14310 Ft. Lauderdale, Florida 33302 Zayle A. Bernstein, Esquire Post Office Box 14310 Fort Lauderdale, Florida 33302
Findings Of Fact The facts in this case are undisputed. On April l6, 1976, petitioner Arthur J. Coyle and his wife Katie Coyle, became the sole shareholders of Sara- Wolf, Inc., a Florida Corporation, whose assets consisted of an apartment building in Miami Beach, Florida. Thereafter, the Coyles decided to transfer the corporate assets to themselves as individuals. They were advised by their attorney that, in view of the 1975 decision of the First District Court of Appeal in Florida Department of Revenue v. DeMaria, 321 So 2d 101 (Fla. 1st DCA 1975) in a similar factual situation, no state documentary stamp tax would be due on the transaction. Therefore, relying upon that judicial decision, petitioner and his wife proceeded to execute a quit claim deed of the corporate real estate to themselves on May 13, 1976, and file the same in the public records of Dade County, Florida, on May 18, 1976, with payment of only nominal documentary stamp tax. The decision of the District Court of Appeal had been stayed by the Supreme Court on December 8, 1975. Subsequent to the decision of the Supreme Court in the DeMaria case on October 14, 1976, which quashed the lower court's decision, respondent issued a notice of proposed assessment of documentary stamp tax in the amount of $526.50 based on a taxable consideration of $175,500, less 30 cents tax paid, for a total tax due of $526.20 plus a like amount as a penalty, and $42.00 in interest, for a total asserted liability of $1,094.40. (Testimony of petitioner, Exhibits 1-3)
Recommendation That the proposed assessment of $1,094.40 against petitioner Arthur J. Coyle and Katie Coyle is valid and should be enforced. DONE and ENTERED this 31st day of May, 1977 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Robert A. Glassman, Esquire 903 Biscayne Building 19 West Flagler Street Miami, Florida 33130 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
