Findings Of Fact This case comes on for consideration based upon the request of the Petitioner, Fanpac Corporation, for a formal administrative hearing on the question of the propriety of the December 8, 1976 assessment, A-54, of the Respondent, State of Florida, Department of Revenue. The claimed assessment pertains to an assignment of lease, recorded at Book 4182, Page 562, Public Records, Duval County, Florida. The assessment states that documentary stamp tax is owed in the amount of $5,404.50, together with accrued interest and a penalty in the amount of the claimed documentary stamp tax. The assessment also states that documentary surtax is owed in the amount of $370.15, together with accrued interest and a penalty in the amount of the claimed documentary surtax. In furtherance of the consideration of the case, the parties have submitted a factual stipulation to be examined by the undersigned in arriving at the terms of the recommended order. Quoting from the stipulation it states:
Recommendation It is recommended that the compromise agreement entered into by the parties, that the Petitioner pay documentary stamp tax and documentary surtax and interest on those amounts in the aggregate of $6,519.06 be accepted. It is further recommended that penalties in the amount of 25 percent of $5,404.50, documentary stamp tax, together with a penalty in the amount of 25 percent of $370.15 documentary surtax, be imposed. DONE AND ENTERED this 7th day of November, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Paul M. Harden, Esquire Smith, Davenport, Peek and Bloom 2601 Gulf Life Tower Jacksonville, Florida 32207 Daniel C. Brown, Esquire Assistant Attorney General Department of Revenue The Capitol Tallahassee, Florida 32304 John D. Moriarty, Esquire Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32304 ================================================================= AGENCY FINAL ORDER =================================================================
Findings Of Fact In time sequence, the following transactions took place: a. Petitioner, Myron Friedman, executed a contract with Willow Industries, Inc., a New York corporation, on August 14, 1973, for the purchase of properties located in Manatee County, Florida. Conquistador Estates, Inc., a Florida corporation, for profit, was incorporated under the laws of the State of Florida on September 25, 1973. Petitioner, Myron Friedman, borrowed $650,000 from Franklin National Bank of Long Island, New York, on October 29, 1973. Mr. Friedman executed a personal note to the Florida National Bank on October 29, 1973. Myron Friedman made a loan to Conquistador Estates, Inc. in the amount of $400,000 to purchase the Manatee County property on October 30, 1973. Conquistador Estates, Inc. purchased the properties described in the contract from Willow Industries, Inc. to Myron Friedman on October 30, 1973. Conquistador Estates, Inc. executed a mortgage to Myron Friedman in the amount of $400,000 on October 30, 1973, in exchange for the herein before mentioned loan of $400,000 on October 29, 1973. Myron Friedman assigned the herein before mentioned mortgage to Franklin National Bank as security for the personal loan of $650,000 on October 30, 1973. Conquistador Estates, Inc. deeded the properties acquired by it from Willow Industries, Inc. to Myron Friedman on May 28, 1974. Additional facts: The notes and the mortgage herein described are still in existence. Conquistador Estates, Inc. is still a viable corporation although it owns no property and Myron Friedman is the sole stockholder. There were no payments made to Petitioner, Myron Friedman, as required by the terms of the promissory note of Conquistador Estates, Inc. to Myron Friedman. In an Audit of documents recorded in the office of the Circuit Clerk in and for Manatee County, Florida, Respondent, Department of Revenue, determined that insufficient documentary stamps and documentary surtax stamps were affixed to the warranty deed dated May 28, 1974, between Conquistador Estates, Inc. and Petitioner, Myron Friedman, an individual. Subsequent to the audit, the Respondent issued a "Proposed Notice of Assessment of Tax and Penalty Under Chapter 201, Florida Statutes, documentary surtax in the amount of $439.45, pursuant to Section 201.021, Florida Statutes, and penalties in the amount of $1,639.14 pursuant to Section 201.17, Florida Statutes. Attached to the said notice was "Schedule A," an explanation of the basis for the demand for additional documentary stamp tax and documentary surtax. It explained that the warranty deed to Petitioner, Myron Friedman, individually, from Conquistador Estates, Inc., satisfied the existing mortgage and which rendered the mortgage unenforceable as to the original mortgagor, Conquistador Estates, Inc., and cited Department of Administration Rule 12A-4.13(2) Florida Administrative Code. "Defaulting Mortgagor: Where a mortgagor, in full or partial satisfaction of the mortgage indebtedness, conveys the mortgaged premises to the mortgagee, documentary stamp taxes are due on the transaction." Petitioner, Myron Friedman, contends: That Conquistador Estates, Inc. was just a nominee used for the purpose of securing a mortgage loan; That he is the sole owner of the corporation; That there was no conveyance in full or partial satisfaction of the mortgage since he is the sole owner of the corporation, and he is the grantee and that, therefore, no documentary stamp tax or surtax or penalty is due; That the mortgage itself is assigned and is still in existence. The Respondent contends: That the clear wording of statute, Section 201.02(1), F.S., controls the transaction which was a conveyance by warranty deed; That because the corporation, Conquistador Estates, Inc. has no assets and made no payments to Petitioner, the conveyance by warranty deed was in full satisfaction of the mortgage indebtedness and canceled the written obligation of the corporation to pay $400,000, the unpaid portion of the obligation secured by the mortgage. The Respondent further contends that the partial indebtness of the corporation itself to Petitioner was canceled.
Recommendation Assess the documentary stamp and the documentary surtax against Petitioner, Myron Friedman. Do not assess penalties for failure to pay tax required, inasmuch as it is apparent that the taxes which were paid were paid in good faith and that the taxes which were due and owing were not paid because of a misunderstanding of the requirements of Chapter 201, F.S. DONE and ORDERED this 28th day of May, 1976. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 1976. COPIES FURNISHED: Robert H. Carr, Esquire Post Office Box 3798 Sarasota, Florida 33578 Patricia Turner, Esquire Department of Legal Affairs The Capitol Tallahassee, Florida 32304
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
Findings Of Fact Prior to the hearing the parties jointly moved to consolidate the two (2) above styled cases and stated the stipulation would cover both 76-2197, D.O.A.H., and 77-604, D.O.A.H. The former involved six (6) deeds and the latter three (3) deeds. The following facts were stipulated to by the parties: The Respondent, Department of Revenue, imposed a documentary stamp tax upon six (6) deeds which transferred the title to properties from individual persons to Petitioner Corry. The transfer came about as a result of the following: In each of the six (6) transfers under question, Petitioner Corry sold property to certain individuals. The Petitioner gave to the individuals a deed and took back a purchase money mortgage. The purchasers made essentially no payments on the mortgage to Petitioner Corry and ultimately the purchasers deeded the property back to the Petitioner. The deeds were recorded in the courthouse records. In one of the deeds there is a specific statement that the deed is executed in lieu of foreclosure and that the purchaser is released from all liability. There is no such specific statement in the other deeds. By a Proposed Notice of Assessment dated August 3, 1976, the Respondent, Department of Revenue, sought to impose a documentary stamp tax upon the six (6) deeds. The consideration upon which the tax is based in cases like the instant case is usually the amount of mortgage debt forgiven but in the instant case no such information was provided and the tax was based on the assessed values of the property. Petitioner Corry is contesting the legal liability of Petitioner for the assessment and is not contesting the legal liability of Petitioner for the assessment and is not contesting the mathematical computation of the amount allegedly due. It is Petitioner's contention that the six (6) deeds are not subject to documentary stamp taxation inasmuch as the Petitioner paid nothing for the deeds and were signed by the mortgagors at the request of the Petitioner to clear title of the equitable owner. It is the Respondent Department of Revenue's contention that the six (6) deeds are subject to documentary stamp taxation since they are deeds in lieu of foreclosure or are deeds given when debts are rendered unenforceable. At the time the six (6) deeds were recorded on December 22, 1975, in Taylor County, the Deputy Clerk asked Petitioner how much he paid for the six (6) deeds in question and when he responded that he paid nothing for the deeds the Deputy Clerk advised him that he owed no documentary stamp tax or surtax thereon. Relying on the Deputy Clerk's advice, the deeds were recorded and no taxes were paid, only the recording fees. The Hearing Officer further finds: The deeds in question were secured for the purpose of clearing title to the equitable owner. The Petitioner paid nothing to the mortgagor for the deeds. The stipulation controls both cases No. 76-2197 and 77-604.
Recommendation Hold the assessments as valid assessment. DONE and ORDERED this 6th day of July, 1977, in Tallahassee, Florida. COPIES FURNISHED: Caroline C. Mueller, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 William W. Corry, Esquire Post Office Box 527 Tallahassee, Florida 32302 DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of July, 1977.
The Issue The Department hereby adopts and incorporates by reference the Statement of the Issue set forth in the Recommended Order.
Recommendation Based on the foregoing, it is recommended that the Department enter a final order dismissing the subject notice of assessment and jeopardy findings. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 10th day of January 1991. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of January, 1991.
Findings Of Fact During the period covered by the tax audit, Petitioner published and distributed free of charge two Jacksonville area editions of a weekly magazine entitled TV Facts. This magazine contains substantial advertising which provides all revenues. In addition to the advertising, television schedules and feature stories are included to interest the general public in the publication. Petitioner obtained a second class postal permit for the magazine, but has never used the mails for distribution. During the period at issue, the magazine was prepared in a three step process. The rough layout without television schedules was prepared by Petitioner and forwarded to Composition Compound, Inc., a Miami company. This company obtained the television schedules and prepared the final layout. Composition Compound then photographed this layout and sent the negatives to Sun 'N' Fun Printing, a Clearwater company. Sun 'N' Fun then printed the magazine and delivered it to Petitioner. Petitioner paid Composition Compound for all services provided by that company and Sun 'N' Fun. Thus, there was no direct business relationship between Petitioner and Sun 'N' Fun. Petitioner believed it qualified for the newspaper exemption and was neither charged nor paid any sales taxes until it learned through Respondent's audit of Composition Compound that such taxes were due. Respondent seeks to assess Petitioner sales taxes in the amount of $5,830.56 with penalty of $1,457.64 plus 12 percent interest to the date of payment for the audit period December 1, 1977, through November 30, 1980. Petitioner does not contest these computations, but believes the tax due, if any, should be reduced by the amounts it paid to Composition Compound to cover the sales tax billed by Sun 'N' Fun. Petitioner submitted Sun 'N' Fun invoice (Exhibit 7) to demonstrate that Composition Compound was billed for about $2,700.00 in sales taxes by Sun 'N' Fun for printing Petitioner's magazine between December 29, 1978, and December 29, 1979. Composition Compound separately computed its costs and profits which it billed to Petitioner (Exhibit 6). However, there was no separate brochure of the sales tax shown on the Composition Compound invoices, nor was any additional tax charged on the value added by that company.
Recommendation From the foregoing, it is RECOMMENDED: That Respondent enter a final order holding Petitioner liable for $5,830.56 in taxes assessed on December 11, 1980, and for interest computed at the rate of 1 percent per month thereafter until said tax is paid to Respondent. DONE AND ENTERED this 9th day of November, 1981, in Tallahassee, Florida. R. T. CARPENTER, 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 9th day of November, 1981.
Findings Of Fact By Deposit Receipt dated June 12, 1975 (Exhibit 1) Kenneth H. Maxwell and Janet A. Maxwell contracted to purchase a lot for $7,000 from D & D Builders of Ft. Lauderdale, Inc. (D & D) with house to be built thereon for $29,900 in accordance with described plan. $3,690 was paid as earnest money deposit on this contract. It was intended that Maxwell would obtain a construction loan from the lending institution and before making the loan the lender required the value and plan number of the house to be included on the deposit receipt contract. The property was deeded to the Maxwells by Warranty Deed dated July 14, 1975 (Exhibit 2) and documentary stamp taxes in the amount of $21 was attached thereto. This is the correct amount for a $7,000 consideration for such a transfer. On July 15, 1975 a mortgage deed was executed by the Maxwells to the First Federal Savings and Loan Association of Highlands County to secure a loan in the amount of $33,200 and intangible taxes were paid thereon. At the time D & D and the Maxwells entered into their contract it was intended that Maxwell, who taught construction at a local junior college, would build his own house. When Maxwell attempted to get a building permit the county would not issue one because he was not a licensed contractor. He then arranged for D & D to pull the permit and for the bank to make the draws payable to D & D who would disburse the funds to the subcontractors, suppliers, and Maxwell. On July 15, 1975 the lender disbursed a check to D & D for $3,310 which, when added to the $3,690 initially paid by the Maxwells, completed the $7,000 payment for the lot to the seller D & D. Thereafter Maxwell constructed his house. D & D made the draws and disbursed the funds to suppliers, subcontractors, and to Maxwell. Exhibit 5 shows 8 checks were made payable to Maxwell totaling some $4,400. D & D did not supervise construction, received no compensations for its services, and acted only as a conduit for the construction loan.
Findings Of Fact By warranty deed dated July 29, 1974 Marco Cove, Inc. conveyed certain property to the Barnett Bank of Naples, Florida as Trustee. At the time of these conveyances the properties were subject to a first mortgage dated September 14, 1971 in an original principal amount of $1,400,000 to AMI Investments, Inc. mortgagee and a second mortgage dated August 24, 1973 in the amount of $130,278 to Joseph R. Lynch, Inc. By quitclaim deed dated November 5, 1974 (Exhibit 8) Donald P. Landis conveyed his interest in Apartment Number C-3 in the condominium here involved to the Barnett Bank of Naples, Trustee. It appears that at the time of the conveyances here involved Marco Cove, Inc. was delinquent on both mortgages, owed materialmen's liens on the property, had sold some of the units to innocent purchasers without giving clear title, and had not placed in escrow the sums so received from these purchasers. Barnett Bank accepted title as trustee, so the various rights of the parties could be resolved without foreclosure proceedings. Although Petitioner contested that Barnett Bank was Trustee for AMI Investments, Inc., Exhibit 10, which was admitted into evidence without objection, clearly shows the bank understood they were trustees for AMI Investments, Inc. and accepted the deeds here involved. At the time of the conveyances the balance owned on the first mortgage was $63,356.16 and on the second mortgage $130,278. Respondent's third Notice of Proposed Assessment (Exhibit 3) assesses documentary stamp taxes and penalties in the amount of $59.25 on each of the three condominium units conveyed to the Trustee and documentary stamp tax and penalty in the amount of $547.88 on the conveyance of the entire condominium for a total tax and penalty of $725.63. No surtax is claimed. The conveyances to the Trustee did not extinguish the mortgages and the Trustee took title to the properties subject to these mortgages. Petitioner has subsequently sold its rights as first mortgagee to a third party for some $66,000.
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 On or about January 31, 1974, the Petitioner purchased a certain tract of property from Rio Branco Corporation. As a part of the purchase price, the Petitioner executed a secured promissory note, and a purchase money mortgage. A copy of the mortgage and the promissory note were received in evidence as Joint Exhibit 1. Although the promissory note is in the form of a direct obligation for the Petitioner to pay the face amount of the note to Rio Branco Corporation, its obligations were limited. The note provides in Paragraph 12 as follows: "Mortgagor, (Petitioner] assumes no corporate liability for the payment of the debt evidenced by this note and mortgage. Mortgagee [Rio Branco Corporation] waives any corporate liability and agrees to look solely to the property securing such debt for payment thereof." Petitioner apparently defaulted on the mortgage and the promissory note, and a foreclosure suit was initiated by Rio Branco Corporation. Petitioner was named as the defendant in this suit which was filed in Sarasota County, and given case number CA-75-1107. Prior to the completion of the foreclosure action, Petitioner executed a quitclaim deed conveying its interest in the subject property back to Rio Branco Corporation. The quitclaim deed was executed in lieu of foreclosure. A copy of the quitclaim deed was received in evidence as Joint Exhibit 2. The Petitioner stipulated that, it executed Joint Exhibit 2 in order to prevent any deficiency from being entered following a judicial sale in connection with the foreclosure proceeding. Despite the stipulation it is apparent that Rio Branco Corporation could not have enforced any such deficiency against the Petitioner due to the above quoted provision of the promissory note. The quitclaim deed was apparently recorded by a representative of Rio Branco Corporation. Through a proposed notice of assessment dated September 9, 1976, the Respondent is seeking to impose documentary stamp taxes, documentary surtaxes, penalties and interest in the total amount of $745.13 upon Petitioner. It is not clear whether the Respondent is also seeking to impose the same taxes upon the grantee of the quitclaim deed, Rio Branco Corporation. Respondent contends that the Petitioner is liable for the documentary stamp taxes on the quitclaim deed, and that the amount of consideration for the deed is the amount of mortgage debt extinguished as a result of execution of the deed. Petitioner contends that as the grantor of the instrument, it has no responsibility for paying documentary stamp taxes, and that further no consideration was given for the deed as a matter of law since no debt which the Petitioner could have been forced to pay was extinguished.
