Findings Of Fact The stipulated facts are as follow: The Petitioners are purchasers of subleasehold interests in Ocean Club III, a condominium in Indian River County, Florida. All of the Petitioners purchased their subleasehold interests from Dye and Reeves Development Company in 1973, except the Petitioner Helen Bane, who purchased her subleasehold interest from the Petitioner Richard Long in 1974. The duration of the subleases was approximately 98 years, and they were paid for with present consideration consisting of cash and mortgages. The document included as Exhibit "A", entitled Unit Sublease, represents the conveyance by which each of the Petitioners acquired his or her subleasehold. No documentary stamp taxes or surtaxes were paid on these conveyances. Prior to closing with the Petitioners, the attorney for the Dye and Reeves Development Company requested William Stanley, Chief of the Documentary Stamp Tax Bureau, Department of Revenue, to give an opinion on whether the Unit Sublease, Exhibit "A", requires documentary stamp taxes and surtaxes. Stanley, in a letter dated July 3, 1973, stated his opinion to be that no documentary stamp taxes and surtaxes were due. A copy of this letter is attached as Exhibit "B." On November 13, 1974, the Attorney General released an official opinion, AGO 074-350, which reversed the position earlier taken by Stanley regarding taxability of conveyances of subleasehold interests. The Department of Revenue has adopted this ruling as its own. Based upon the letter from Stanley, the Dye and Reeves Development Company assured the Petitioners that no documentary stamp taxes or surtaxes would be required on the Unit Sublease. The Petitioners had knowledge of the letter or its contents at the time they closed the transaction, but at the time of closing nevertheless requested an Indemnification Agreement, Exhibit "C" herein, in which Dye and Reeves agreed to bear the cost of documentary stamp taxes due upon the Sublease. Exhibits "A," "B," and "C" represent all the relevant documents in this litigation. The Department of Revenue has issued Proposed Notices of Assessment against the Petitioners based upon an alleged documentary stamp tax and surtax liability under the Unit Sublease. The Department of Revenue has not assessed any penalties against the Petitioners. The Petitioners are unable to recover the sums alleged to be due as to taxes and surtaxes from the Dye and Reeves Development Company because the Company has no assets. Petitioners are also barred by limitations from recovering the money from the estate of Mr. Dye, who is deceased. The Petitioners and the Department of Revenue's Tax Examiner have held an informal conference, in which the two parties were unable to resolve their differences concerning the aforementioned assessment. If the Petitioners are found to be liable for documentary stamp taxes and surtaxes, the following amounts represent the proper computation of their liability: NAME TAX SURTAX TOTAL EDWARD K. HALSEY 106.50 10.45 116.95 HELEN C. BANE 117.60 43.45 161.05 W.B. WHITAKER, et ux. 165.00 16.50 181.50 JAMES N. SKINNER 115.50 11.55 127.05 MARY GLENNAN 98.40 36.30 134.70 JOHN F. McFEATTERS, et ux. 127.50 46.75 174.25 ALLEN TOUZALIN 121.50 14.85 136.35 RICHARD LONG, et ux. 117.60 11.00 128.60 HOWARD BAIN, et ux. 103.50 7.70 111.20 JOHN MYLES DEWAR, et ux. 126.00 46.20 172.20 JOHN S. STEPHENS, et ux. 99.00 7.70 106.70 PHYLLIS T. HERMAN 103.50 10.45 113.95 CHARLES W. CHRISS, et ux. 96.00 7.15 103.15 KATHRYN LOCKWOOD, et ux. 97.50 35.75 133.25 KATHRYN LOCOD, et ux. 163.50 59.95 233.45 KATHRYN LOCKWOOD, et ux. 100.50 36.85 137.35 The sums stated above do not include any interest which may have accrued on the alleged liability. Pursuant to stipulation of the parties, the testimony of Howard W. Bain, a Petitioner, was offered on behalf of all of the Petitioners in this case. He testified that he purchased a unit at Ocean Club III from Dye and Reeves Development Company in early June, 1973. Prior to the closing of that purchase, he was advised by his attorney that the latter expected to be provided by the developer's attorney a letter from the Department of Revenue that would state documentary stamps were not payable on the purchase of the condominium unit. Bain would not have closed the purchase if he had had to pay documentary stamp taxes on the transaction. It was his understanding that if any taxes did become due and payable they would be paid by the developer incident to the indemnification agreement. He was unaware at the time that Dye and Reeves Development Company might go out of business in the future. (Testimony of Bain).
Recommendation That Petitioners L.L. Lockwood and Kathryn H. Lockwood, his wife; Howard H. Bain and Mary C. Bain, his wife; Richard H. Long and J. Ann Long, his wife; Edward K. Halsey; Mary Glennan; W.B. Whitaker; Allen Touzalin; and John F. McFeatters and Emily J. McFeatters, his wife, be relieved from any liability from documentary stamp tax or surtax under Chapter 201, F.S. That Petitioners Helen C. Bane, James M. Skinner, John Myles Dewar, et ux., John S. Stephens, et ux., Phillis T. Herman, and Charles W. Chriss, et ux., be held liable for the payment of documentary stamp tax, surtax, and interest thereon, pursuant to Chapter 201, Florida Statutes, in the amounts set forth in the foregoing Findings of Fact. DONE and ORDERED this 9th day of December, in Tallahassee, Florida. THOMAS C. OLDHAM 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 9th day of December, 1976.
The Issue Whether petitioner is liable for documentary stamp surtax, penalty and interest, pursuant to Proposed Notice of Assessment, dated November 17, 1976. The parties stipulated to the relevant facts set forth in the petition. They also stipulated that the amounts of the proposed assessment are properly computed and due, if petitioner is determined to be liable therefor.
Findings Of Fact Petitioner is a Netherland Antilles Corporation, duly authorized to do business in the State of Florida. On April 9, 1974, petitioner executed a mortgage deed to Seville Management, a partnership, whereby it encumbered its long-term lease on certain real property located in Miami Beach, Florida, in the amount of $2,500,000. The lease contained an option to purchase the land in the amount of $1,500,000, which was later increased to $1,550,000. Paragraph 33 of the deed provided that petitioner would be obligated to consummate the exercise of the option to purchase on or before June 1, 1976, and that failure to do so would constitute a default of the mortgage on the leasehold interest. (Testimony of Cassel, Petition) In June 1976, Petitioner obtained fee simple title to the property in question through the exercise of the option to purchase for the sum of $1,550,000, by warranty deed dated June 27, 1976, from the trustees of Central States, Southeast and Southwest Areas Pension Fund as grantor. The deed provided that the lease was thereby "extinguished, canceled and terminated, the Grantee herein being owner of the interest of the Lessor and the Lessee in such lease. Petitioner recorded the warranty deed on July 6, 1976, and affixed the state documentary stamps on a consideration of $1,550,000. However it only affixed the nominal sum of 55 cents for documentary surtax, At the time of the conveyance, the mortgage balance on the property exceeded the purchase price of $1,550,000. (Testimony of Cassel, Petition) Subsequently, respondent assessed documentary surtax in the amount of $1704.45 and a penalty in a like amount, plus interest in the amount of $74.31 against petitioner with respect to the transaction based on a consideration of $1,550,000. On November 4, 1976, an informal conference was held with the respondent and thereafter by letter of November 17, 1976, respondent issued a Notice of Proposed Assessment in the total amount of $3,483.21 for delinquent documentary surtax, penalty and interest. (Petition, Exhibit 1)
Recommendation That the proposed assessment against petitioner in the amount of $3483.21 for documentary surtax, penalty, and interest under Section 201.021, F.S., be upheld and assessed. DONE and ENTERED this day of April, 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: Edwin J. Stacker, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304 Craig B. Sherman, Esquire Broad and Cassel Barnett Bank Building 1108 Kane Concourse Bay Harbor Islands, Florida 33154
The Issue Whether American National can litigate its entitlement to a documentary stamp tax refund pursuant to Section 120.57, Florida Statutes (1987)? If so, whether American National is entitled to a refund of some or all of the $5,475 it paid in recording the first modification and consolidation of notes, mortgages and assignment of leases and rents executed by American National and General Electric Credit Corporation (GECC) on July 11, 1986?
Findings Of Fact Real estate in Escambia County which petitioner American National now holds as trustee (the property) once belonged to U.S.I.F. Pensacola Corporation (USIFP). On September 1, 1969, USIFP gave Town and Country Plaza, Inc. (T & P) a note for $1,500,000 and executed a mortgage on the property in favor of T & P as security for payment of the note. A separate $300,000 note was promptly repaid. On July 5, 1973, U.S.I.F Wynnewood Corporation (USIFW), USIFP's successor in title, gave U.S.I.F. Oklahoma Corporation (USIFO) a note for $625,000, and executed a mortgage on the property in favor of USIFO as security for payment of its note. On July 8, 1982, shortly after Trust No. 0008 acquired the property, Jacksonville National Bank, as trustee, gave First National Bank of Chicago (FNBC) two notes, each secured by a separate mortgage. One note was for $767,481.98, and the other was for $2,000,000. These two notes, along with the two notes originally given to T & P and USIFO, which were both subsequently assigned to FNBC, were the subject of the July 8, 1982, consolidation, modification and extension agreement. Documentary stamp tax owing on account of these notes (the consolidated notes) was eventually paid in its entirety. All four mortgages with which the property was encumbered when petitioner American National succeeded Jacksonville National as trustee were duly recorded, intangible tax having been fully paid upon recordation. In January of 1984, FNBC assigned the consolidated notes and the mortgages securing their payment to VPCO Properties, Inc., which itself assigned them later the same month to VPPI TCH, Inc. In July of 1986, GECC, the present holder of the consolidated notes acquired the notes and became the mortagee on the mortgages securing their payment. As of July 11, 1982, when American National, as trustee of Trust No. 0008, borrowed an additional $1,150,000 from GECC, the outstanding principal balance on the consolidated notes aggregated $3,650,000. On that date, GECC and American National, as trustee, executed the so- called first modification and consolidation of notes, mortgages and assignment of leases and rents, Petitioner's Exhibit No. 1, which recited the parties' understandings both with respect to the new borrowing and with regard to the existing indebtedness the consolidated notes reflected. In addition to signing Petitioner's Exhibit No. 1, American National, as trustee, also executed and delivered to GECC a promissory note in the amount of $1,500,000. This note, which was not offered in evidence, has never been recorded, nor have documentary stamps ever been affixed to it. At GECC's insistence, American National paid a documentary stamp tax of $7,920 at the time Petitioner's Exhibit No. 1 was recorded in Pensacola. Of this sum, $5,475 was paid on account of the indebtedness the consolidated notes evidenced; $1,725 was paid on account of the new borrowing; and $720 was paid because of the provisions in Petitioner's Exhibit No. 1, contemplating an increase in the principal amount of indebtedness. Under the agreement certain interest payments can be deferred, not to exceed $480,000, any such deferments being added to principal. The agreement provides: Notwithstanding the foregoing, so long as Borrower is making all payments on this Note when due, without giving effect to grace periods or requirements of notice, if any, and is otherwise not in default, taking into account, applicable grace periods, if any, under the Mortgage and other Security Documents Borrower shall be entitled to defer payment, in any month, of interest in excess of interest computed at the "Applicable Base Percentage Rate" (hereinafter defined) so long as the total interest deferred under this paragraph ("Deferred Interest"), including any and all Deferred Interest which has been added to the principal balance hereof, as hereinafter provided, does not exceed the lesser of ten percent (10 percent) of the outstanding principal balance hereof, excluding any and all Deferred Interest which has been added to the principal balance hereof, or $480,000. Such Deferred Interest, including any and all Deferred Interest which has been added to the principal balance hereof, shall be due and payable when and to the extent that, in any subsequent month, the Contract Index Rate is less than the "Applicable Base Percentage Rate", with the balance of such Deferred Interest being payable as provided below or on the maturity hereof, whether by lapse of time, prepayment or acceleration. The "Applicable Base Percentage Rate" shall mean the following per annum rates of interest, computed as aforesaid, for the periods indicated: Applicable Base Period Percentage Rate Date of This Note June 30, 1987 10.0 percent July 1, 1987-June 30, 1988 10.5 percent July 1, 1988-June 30, 1989 11.0 percent July 1, 1989-June 30, 1990 11.5 percent July 1, 1990-Maturity Date (hereinafter defined) 12.0 percent Unless previously paid by Borrower, the outstanding balance of Deferred Interest not previously added to principal in accordance herewith, if any, shall be added to the principal balance hereof on the first day of each calendar quarter beginning with October 1, 1986, and shall accrue interest thereafter at the Contract Index Rate provided for principal, which interest shall be payable in the same manner as is applicable to interest on the original principal balance hereof. Notwithstanding the foregoing, Borrower may pay Deferred Interest at any time without penalty. Of the documentary stamp tax American National paid, $720 was on account of future advances that Petitioner's Exhibit No. 1 was designed to secure, in the event GECC made them.
Findings Of Fact Respondent married Barbara Hannon on October 31, 1970. On November 5, 1975, Barbara G. Reilly, as she was sometimes known during her marriage to respondent, executed a petition for dissolution of marriage and other relief in which she alleged that she "wishe[d] to resume her former surname of HANNON." On January 14, 1976, the marriage between respondent and Barbara Hannon was dissolved. Petitioner's exhibit No. 4. Effective October 1, 1973 through October 4, 1975, inclusive, respondent was registered as a real estate salesman in the employ of King's Point Realty, Inc. From October 5, 1975, to March 31, 1977, respondent was registered as a real estate broker at the same office. By deed dated May 1, 1975, Harry and Evelyn Litwin conveyed "CONDOMINIUM PARCEL NO. 508, KINGS POINT BRITTANY K" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 14. This deed reflects payment of documentary stamp tax in the amount of $49.50 and of documentary surtax in the amount of $1.65. By deed dated June 20, 1975, "BARBARA HANNON, a single woman" conveyed the same parcel to Robert and Meredith Nisenbaum. This deed reflects payment of documentary stamp tax in the amount of $52.50 and of documentary surtax in the amount of $19.25. Petitioner's exhibit No. 14. By deed dated September 29, 1975, Dorothy I. Fox, an un-remarried widow, conveyed "CONDOMINIUM PARCEL NO. 702, KINGS POINT SAXONY `O'" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 15. This deed reflects payment of documentary stamp tax in the amount of $34.50 and of documentary surtax in the amount of $2.20. By deed dated November 6, 1975, "BARBARA HANNON, a single woman," conveyed the same parcel to B & M Realty Trust II. This deed reflects payment of documentary stamp tax in the amount of $45.00 and of documentary surtax in the amount of $6.05. Petitioner's exhibit No. 15. By deed dated October 31, 1975, Myron and Sonia Spergel conveyed "Condominium Parcel No. 237 of FLANDERS `E'" to "BARBARA HANNON." Petitioner's exhibit No. 16. This deed reflects payment of documentary stamp tax in the amount of $45.60 and of documentary surtax in the amount of $17.05. By deed dated March 12, 1976, "BARBARA HANNON" conveyed the same parcel to Harry and Evelyn Tuckman. Petitioner's exhibit No. 8. This deed reflects payment of documentary stamp tax in the amount of $57.00 and of documentary surtax in the amount of $4.40. Mr. and Mrs. Tuckman, who still lived in the condominium at the time of the hearing, dealt with respondent when they acquired the property. In conversations with respondent, a price was agreed upon. The Tuckmans did not know who the seller was at the time they agreed to buy. By deed dated June 10, 1976, Ida Ellman, a widow, conveyed "Condominium Parcel No. 202 of Valencia `I' CONDOMINIUM" to "BARBARA HANNON, a single woman." Petitioner's exhibit No. 17. This deed reflects payment of documentary stamp tax in the amount of $57.00 and of documentary surtax in the amount of $8.25. On this deed, the grantee's post office address is stated as "P.O. Box 994, Delray Beach, Fl. 33444." According to post office records, respondent George F. Reilly rented Post Office Box 994 at the Delray Beach Post Office from on or about November 4, 1975, until on or about June 21, 1977. By deed dated August 4, 1976, "BARBARA HANNON, a single woman" conveyed the same property to Natale and June V. Lisi. Petitioner's exhibit No. 9. This deed reflects payment of documentary stamp tax in the amount of $69.00 and of documentary surtax in the amount of $25.30. Respondent represented the seller when Mr. and Mrs. Lisi purchased the condominium. Respondent never disclosed to Mr. and Mrs. Lisi that he and Barbara Hannon had been married. By deed dated September 30, 1976, Sidney and Jean Kessler and Charles and Sandra Bondar conveyed "Parcel No. 159 of TUSCANY `C' Condominium" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 5. The grantee's address appears on this deed as "P.O. Box 994, Delray Beach, Florida 33444." This deed reflects payment of documentary stamp tax in the amount of $67.50 and of documentary surtax in the amount of $7.70. Respondent asked John W. Hooker, Jr., to handle the transaction from the Kesslers and Bondars to Barbara Hannon. Mr. Hooker received a cashier's check drawn on the Barnett Bank of West Delray Beach in the amount of $6,305.37, petitioner's exhibit No. 6, and closed the transaction by mail. He never met Barbara Hannon and only learned afterwards that she and respondent had been married. Respondent never disclosed to the Kesslers or to the Bondars that he had been married to Barbara Hannon; and he later admitted this to Floyd M. Stevens, an investigator in petitioner's employ. The money used to purchase the cashier's check given to Mr. Hooker, petitioner's exhibit No. 6, came from respondent's savings account at the Barnett Bank of West Delray Beach. Petitioner's exhibit No. 19. By deed dated December 16, 1976, "BARBARA HANNON, A SINGLE WOMAN" conveyed "Parcel No. 169, of TUSCANY `C' CONDOMINIUM" to John L. Schmieder and James A. Schmieder. Petitioner's exhibit No. 10. In anticipation of the conveyance, John Schnieder had placed a deposit with respondent in the form of a money order in the amount of $1,000, payable to "GEORGE REILLY-KING'S POINT REALTY." Petitioner's exhibit No. 21. The seller's closing statement prepared on December 15, 1976, contains the item: "Brokerage Commission Kings Point Realty . . . [$]1,000.00." Petitioner's exhibit No. 11. According to the same closing statement, the balance due seller amounted to $9,200.64. Id. On December 16, 1976, respondent deposited $10,200.64 (1,000.00 + 9,200.64) to his savings account at the Barnett Bank of best Delray Beach. Petitioner's exhibits Nos. 20, 21 and 22. According to the Bank's records, respondent's mailing address was "P.O. Box 994, Delray Beach, Fla. 33444." Respondent never mentioned to the Schmieders that he and Barbara Hannon were in any way related. Respondent deposited the money order he had received from the Schmieders to his own savings account on December 16, 1976; and never earlier deposited the money order to any escrow account. On October 14, 1976, The Keyes Company mailed a check drawn in favor of Kings Point Realty, Inc. (Kings Point) in the amount of $500, to the offices of Kings Point in Delray Beach. This check never reached Kings Point's supervisor of accounts payable and was not processed through Kings Point's ordinary banking channels, although it was paid.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's registration as a real estate broker. DONE and ENTERED this 19th 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 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1979 COPIES FURNISHED: Kenneth M. Meer, Esquire Post Office Box 1900 Orlando, Florida 32802 George F. Reilly 8671 Sunset Strip Sunrise, Florida 33322 George F. Reilly Post Office Box 4525 Old San Juan Station Puerto Rico 00905
The Issue The issue here concerns the propriety of the Respondent, State of Florida, Department of Revenue's assessment of tax under authority of Sections 201.01 and .08, Florida Statutes, in the amount of $11,557.20 and penalty of $577.86 against the Petitioner, Landmark Bank of Brevard. The specific nature of the assessment is one pertaining to items identified as detachable "Promissory Notes" which are attached to documents entitled "Trust Receipts."
Findings Of Fact The facts in this case reveal that the Petitioner Landmark Bank of Brevard, hereafter referred to as the "Bank," made loans to several motor vehicle dealers in Brevard County. The borrowers were Carl Schmidt Motors, Inc.; Bennie C. Chapman, who does business as Chapman Auto Sales; and Harley Davidson of Melbourne, Inc. The arrangements for the loans were on the basis that the dealers would apply with the Bank to receive moneys which would be used to "floor plan" automobiles and motorcycles being sold through their retail outlets. The applications were processed through the loan committee and when the loans were approved a Promissory Note was signed by the appropriate persons acting in behalf of the dealers. (Copies of the notes executed were attached to the Petition for Formal Hearing and acknowledged to be correct through the answer filed in behalf of the Respondent and the notes as attached to the Petition are being provided with this Recommended Order together with those exhibits offered in behalf of the parties.) The notes allow for the single disbursement of a stated amount of money, with the repayment of principal and payment of interest being due by one payment for which demand is made within a period as short as several months or as long as one year depending on the note conditions. Collateral is provided, according to the terms of the notes, either by the lease and rental autos listed on separate documents entitled "Trust Receipts," which Trust Receipts are held by the Bank or otherwise described as such motor vehicles as were then owned by the dealers at the time the execution of the note or as would thereafter be acquired. These notes, meaning the initial Promissory Notes, had Documentary Stamps placed and canceled in the monthly journal of the Bank at the time of the execution of the Promissory Notes, in an effort by the Petitioner to comply with Section 201.08, Florida Statutes. The amount of Documentary Stamps utilized was in keeping with the face amount of the loan proceeds reflected on the Promissory Notes. Therefore, when the Promissory Notes are examined an impression is created that a single disbursement of loan proceeds has been made for which Documentary Stamp tax has been collected. In reality, the arrangement between the dealers and the Petitioner was to the effect that the full amount of the loan proceeds would not be assigned to the account of the dealers upon execution of the note. What would happen, is that the dealers would be allowed to make "draws" against the loan proceeds on the basis of surrendering the title of a used motor vehicle which they had acquired or having the manufacturer of a new motor vehicle submit the Manufacturer's Certificate of Origin to the Bank. In turn, moneys were advanced to the dealer equal to the value of the used unit or commensurate with the amount reflected on the Manufacturer's Certificate of Origin if a new unit. These titles and Manufacturer's Certificates of Origin were held as collateral and the dealers would take possession of the actual vehicles to be placed in the dealer's inventory until a retail purchase had been made. The vehicles for which the Petitioner had received title or the Manufacturer's Certificate of Origin were then listed on documents called "Trust Receipts." The "Trust Receipts" would show the vehicle description, make, serial number and price as described in the Manufacturer's Certificate of Origin or title. These descriptions were placed on individual "Trust Receipts" based upon the date the evidence of ownership was submitted from the dealer of the Bank. That is to say, if four Manufacturers' Certificates of Origin or titles were submitted to the Bank at one time, then four of the vehicles would be listed on a single "Trust Receipt" as opposed to listing the four new units on a "Trust Receipt" that already had a unit or units listed from another visit by the dealer. Examples of the various "Trust Receipt" documents may be found in the Respondent's Composite Exhibit 3 admitted into evidence which contains copies of the "Trust Receipt" examples. The "Trust Receipt" documents had attached to them an item entitled "Promissory Note," which item could be detached from the body of the "Trust Receipt." Some examples in the Respondent's Composite Exhibit 3 have the "Promissory Note" affixed, reflecting a date and money amount equal to the amount arrived at by totaling the value related to the various units shown in the "Trust Receipt." These examples also list the borrower's name and are signed by Margy Driggers, the Assistant Cashier of the Petitioner. Some are signed by Margy Driggers, with the initials "P.O.A." placed in front of or after her title as Assistant Cashier. One other example is the same as above but without the initials "P.O.A." There is also an example signed by Bennie C. Chapman, one of the dealers who borrowed money. The Chapman example reflects the amount of value shown in the "Trust Receipt," to which the "Promissory Note" is attached and it has a date, but does not reflect the amount of interest to be paid if this is indeed a Promissory Note. There was another category of "Trust Receipt" and attached "Promissory Note" reflecting motor vehicles for which money had been loaned and this was a type in which no entries had been made on the "Promissory Note"; however, an example of this type was not provided through the Respondent's Exhibit 3. Both parties acknowledged that the initials "P.O.A." stand for power of attorney. They disagree on the question whether a power of attorney had been granted to the Petitioner to act in behalf of the subject dealers. The Petitioner through its witnesses claim that the designation "P.O.A." is simply an extension of a long standing policy of the Bank which predates the current Assistant Cashier and has no meaning. Therefore, no power of attorney has ever been granted from the dealers to the Bank to execute promissory notes on behalf of the dealers. The Respondent through its auditor, whose investigation led to the assessment in dispute, claims that Margy Driggers, the Assistant Cashier, told him that "P.O.A." means power of attorney and that she had the ability to sign for Carl Schmidt. (Carl Schmidt Motors, Inc.) None of the dealers were presented in the course of the hearing to state their position on the granting of power of attorney to the Petitioner for purposes of executing the item known as "Promissory Note" attached to the various "Trust Receipts," and there are no written documents which would demonstrate the granting of a power of attorney to the Bank. Moreover, nothing in the original Promissory Notes executed by the dealers leads to the conclusion that the item known as "Promissory Note" attached to the "Trust Receipt" may be executed by a Bank official through power of attorney for the dealer. Consequently, no power of attorney has been shown to be granted from the dealers to Margy Driggers or any other employee of the Petitioner, on the subject of executing "Promissory Notes" attached to the "Trust Receipts." When the items were filled out, copies of the "Trust Receipts" and attached "Promissory Notes" were forwarded to the several dealers. When a dealer sold one of the automobiles for which the Petitioner held the title or Manufacturer's Certificate of Origin as security, then the dealer paid an amount equal to that amount reflected in the "Trust Receipt" document and an entry was made in the date paid column of that document which showed that amount of debt had been satisfied by the dealer. During the operative period of the initial Promissory Note, meaning that period between the time of the execution of the note and the time the note was due as reflected on the face of the note, the dealer could borrow an amount not to exceed the face amount of the loan proceeds and if some portion of that amount was retired, then an additional amount could be borrowed, which effectively meant that in the active life of the loan as shown by the initial Promissory Note more money could be borrowed during the life of the note than the amount reflected on the face of the Promissory Note. For example, hypothetically the Promissory Note could entitle the dealer to borrow $19,959.00 on May 10, 1976, to be repaid by May 10, 1977. That dealer could then borrow $19,959.00 between those dates and pay back that amount of money with interest and borrow an additional $5,000.00 to be paid back before the expiration date of the loan and in actuality would have borrowed $24,959.00, ostensibly under the terms and conditions of the initial note. These additional amounts of loan proceeds cannot be seen by examining the initial Promissory Notes; they can only be discovered by adding the individual amounts reflected in the "Trust Receipts" and comparing the total to what is shown by adding the loan amounts depicted in the initial Promissory Notes. This is in fact what was done by the auditor in conducting the audit and it is the differential between the amounts shown in the "Trust Receipt" aggregate as contrasted to the initial Promissory Note aggregate for which the Respondent claims Documentary Stamp tax is owed. The Respondent would have the Documentary Stamp tax applied to some combination of the so-called "Promissory Notes" attached to the "Trust Receipts" equal to an amount representing the differential spoken to before. The Respondent did not establish which "Trust Receipts" with attached "Promissory Notes" would be subject to the assessment of Documentary Stamp tax. Through this process, the Respondent in its Revised Notice of Assessment is claiming tax of $11,557.20 and a penalty of $557.86. (A copy of this notice may be found as Respondent's Exhibit 4 admitted into evidence.)
Recommendation It is RECOMMENDED that the proposed assessment for Documentary Stamp tax and penalty made by the Department of Revenue, State of Florida, against the Petitioner, Landmark Bank of Brevard, a banking corporation organized and existing under the laws of the State of Florida, formerly Landmark Bank of Melbourne, N.A., be DISALLOWED. 1/ DONE AND ENTERED this 9th day of April 1980 in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of April 1980.
Findings Of Fact The Petitioner inherited the property which is the subject of this matter from his uncle who died on June 30, 1971. Petitioner sought to sell the property, and on February 7, 1972 a Mr. Skinner made an offer to purchase the property for $412,000. Petitioner rejected the offer. On July 23, 1973, Petitioner entered into a contract to sell the property for $915,000 to Virgil Norris and Mavis Y. Norris. The contract called for a $50,000 deposit or binder, $200,000 cash to be delivered at the time of closing, and a $665,000 purchase money mortgage. Just prior to closing the Norrises informed Petitioner that they did not have the $200,000. Petitioner assisted the Norrises in arranging a $200,000 mortgage to the Barnett Bank. Petitioner subordinated his own mortgage to the mortgage with Barnett Bank. On February 7, 1974, the Norris transaction was consummated. Joint Exhibits 1-3 were executed and recorded. The Norrises were unable to make payments on either mortgage. On January 13, 1975, the Petitioner initiated foreclosure proceedings. In lieu of foreclosure the Norrises executed a quitclaim deed to the Petitioner. The quitclaim deed and an accompanying agreement were received in evidence as Joint Exhibit 4 and 5. When the quitclaim deed was executed the Norrises had made no payments on their purchase money mortgage to the Petitioner, and had paid only interest on the purchase money mortgage to the Barnett Bank. The Norrises' mortgage to the Petitioner was satisfied through the execution of the quitclaim deed. The face amount of the mortgage, and the amount of the mortgage debt extinguished by the quitclaim deed was $665,000. Petitioner also agreed to assume the mortgage to the Barnett Bank. The face amount of that mortgage was $200,000 and the amount of debt that was extinguished through the quitclaim deed transaction was $200,000. The total amount of debt extinguished through the quitclaim deed was $865,000. When the quitclaim deed from the Norrises to the Petitioner was executed the actual market value of the subject property was $450,000. Documentary stamp tax and documentary surtax stamps were affixed to the quitclaim deed based upon the consideration for the deed being the actual market value of the property. Petitioner contends that the consideration for the quitclaim deed which was taken in lieu of a foreclosure action was the actual market value of the property. Respondent contends that the consideration for the quitclaim deed was the amount of mortgage debt extinguished as a result of execution of the deed.
Findings Of Fact Petitioner is in the land development business. Petitioner sold residential lots to various purchasers and contracted through a sister corporation to construct homes on the lots. At the time the lots were conveyed no improvements had been made. Petitioner placed documentary tax stamps and documentary surtax stamps upon the deeds reflecting the consideration for the deeds as the price of the lots. Respondent contends that stamps should have been placed on the deeds reflecting the consideration as the price of the lots plus improvements. Accordingly Respondent is proposing to assess additional stamp taxes, surtaxes, penalties and interest upon the Petitioner in the total amount of $13,002.10. The pleadings, answers to interrogatories and responses to requests for admissions establish that unless Rule 12A-4.13(22), Florida Administrative Code is invalid, Petitioner is liable for the taxes Respondent proposes to assess. The transactions which form the basis of the proposed assessment are package deals within the meaning of the Rule.
Findings Of Fact Upon consideration of the stipulation of the parties and documents attached thereto, the following relevant facts are found: On or about October 9, 1979, Dade County, a political subdivision of the State of Florida acting for the use and benefit of its Department of Housing and Urban Development, a public housing authority ("PHA"), entered into a Contract for Project Dade 8-10 ("Contract") with Irbye Giddens, Inc. and Cohen- Ager, Inc., a joint venture, for the construction of Project Dade 8-10, a/k/a Singer Plaza, a housing development for the physically handicapped. The Contract was granted to Cohen-Ager, Inc. and Irbye Giddens, Inc. pursuant to competitive negotiations based on a document titled Dade 8-10 Request for Proposals. Cohen-Ager, Inc. and Irbye Giddens Inc. were selected on the basis of their bid submission as modified by the agreement of the parties due to delay in commencing construction. As indicated by the original bid submission of Cohen-Ager, Inc. and Irbye Giddens, Inc. the original price of the project was $2,576,000; but at the request of Cohen-Ager Inc. and Irbye Giddens, Inc., the contract price was eventually raised to the amount found in Part II of the Contract, $2,970,000. On or about October 10, 1979, Dade County deeded the subject undeveloped property to Cohen-Ager Inc. and Irbye Giddens Inc., the joint venture, by "Quit-Claim County Deed Subject to Possibility of Reverter," ("Quit- Claim Deed"). The Quit-Claim Deed, which incorporated by reference the Contract described in paragraph "1," provided for automatic reverter to Dade County of all of the right, title, and interest of Cohen-Ager, Inc., in the property upon, among things, the termination, rescission or complete performance of the Contract. Cohen-Ager, Inc., and Irbye Giddens, Inc. having obtained title to the property by virtue of the Quit-Claim Deed, rightfully used the property as collateral to obtain financing to cover the cost of construction of project 8- 10. Cohen-Ager, Inc., and Irbye Giddens, Inc., were legally obligated under the Contract and the Quit-Claim Deed to complete construction of project 8-10 and to reconvey clear title to Dade County when the project was completed. Cohen-Ager, Inc., and Irbye Giddens, Inc., fully performed under the terms of the Contract and Quit-Claim Deed, and reconveyed the property to Dade County by Warranty Deed dated February 12, 1981, and recorded March 12, 1981 ("Warranty Deed"). The Warranty Deed is the instrument on which the State of Florida Department of Revenue seeks to impose the documentary stamp tax at issue here. The Warranty Deed was one step in a multi-step transaction used to finance the development and construction of project 8-10. Under this method of financing development of its property, Dade County transfers title to undeveloped property and "repurchases" developed property. Pursuant to the terms of the Contract, Dade County transferred title to the undeveloped property site to Cohen-Ager, Inc. and prohibited the transfer of the contract or property except (1) to an entity to which the contract is assigned with the written prior approval of the PHA and (2) to a mortgagee for the purpose of obtaining financing of the completion of the property. Dade County paid for the development of project 8-10 with the proceeds of Special Housing Revenue Bonds issued for that project pursuant to Chapters 159 and 166, Florida Statutes, Dade County Ordinance No. 79-49, and Dade County Board of County Commissioners' Resolutions R-1270-79 and R-1423-79. The Special Housing Revenue Bonds were issued under a Trust Indenture. When the property was reconveyed to Dade County by the Warranty Deed, Dade County paid to Cohen-Ager, Inc., and Irbye Giddens, Inc. the contract price, $2,970,000, from the proceeds of the bonds. The Department of Revenue seeks to impose the documentary stamp tax on the total amount of the contract price as the consideration for the Warranty Deed. The documentary stamp tax on $2,970,000 is $11,880.00, or $.40 per $100 of consideration. Article VII, paragraph (c), of the contract of Sale, attached to and made a part of the Contract, specifies in part that the Contractor (herein Cohen-Ager, Inc.) "shall pay all documentary stamps and taxes applicable to" the coveyance of the property to Dade County by warranty deed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that the Department of Revenue enter a Final Order assessing Cohen-Ager, Inc., for the documentary stamp tax due on the Warranty Deed to Dade County in the amount of $11,880.00, plus penalties and interest. DONE and ORDERED this 16th day of January, 1986, in Tallahassee, Florida. DIANE K. KIESLING 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 16th day of January, 1986. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 84-1425 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by Petitioner and Intervenor Adopted in Finding of Fact Adopted in Finding of Fact 2. Adopted in substance in Finding of Fact 3 as regards the first two sentences of the proposed finding of fact. The last three sentences of the proposed finding of fact are rejected as unnecessary, as not supported by the evidence, as beyond the scope of the facts stipulated by the parties, and as being commentary. Adopted in Finding of Fact 4. Adopted in Finding of Fact 5. Adopted in Finding of Fact 6. Adopted in Finding of Fact 7. Adopted in Finding of Fact 8. Adopted in Finding of Fact 9. Adopted in Finding of Fact 10. Rulings on Proposed Findings of Fact Submitted by Respondent Rejected as unnecessary and irrelevant. It is simply a recap of part of the history and issues in the case and is therefore unnecessary to a determination of the issues. Adopted in substance in Findings of Fact 1, 6, and 7. Adopted in substance in Findings of Fact 5 and 6. There is an apparent typographical error in that the last two lines of Proposed finding of fact 3 are incomplete and the subject of the incomplete sentence is omitted. However it may be that the substance intended by Respondent is adopted in Finding of Fact 13. There is no proposed finding of fact 4. It may be that the incomplete sentence referred to above was intended to be proposed finding of fact 4. If so, the ruling on it is incorporated above. 5. Adopted in substance in Findings of Fact 2, 11 and 12. COPIES FURNISHED: Lewis R. Cohen, Esquire 1428 Brickell Avenue Eight Floor Miami, Florida 33131 Linda Lettera, Esquire Department of Legal Affairs Room LL04 The Capitol Tallahassee, Florida 32301 Joni B. Armstrong Assistant County Attorney 16th Floor 73 West Flagler Street Miami, Florida 33130 Randy Miller Executive Director 102 Carlton Building Tallahassee Florida 32301 William D. Townsend General Counsel 104 Carlton Building Tallahassee, Florida 32301 =================================================================
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 The parties in the person of their counsel have stipulated to the evidential facts which shall serve as the basis for the determination of the matters in dispute. The stipulation of facts and its attendant exhibits are attached to this Recommended Order and made a part thereof. As can be seen in the examination of the stipulated facts and supporting exhibits, the amount of $940.80 tax due and $940.80 for penalty is the total amount pertaining to certain notes, including notes in the names of Newth and Smith, copies of which notes appear as Exhibits C and D to the stipulated facts. A review of the total audit, Exhibit A in the stipulated facts, reveals that the amount in issue on the notes of Newth and Smith totals $885.75 alleged tax due and $885.75 alleged penalty due. The balance of the $940.80 documentary stamp tax and $940.80 in penalty pertaining to notes of other named individuals have been conceded by the Petitioner as due and owing and are not in controversy through this hearing process. The original notes on the accounts of Newth and Smith were issued in 1969. The Newth note was drawn on September 17, 1969, and the Smith note on April 14, 1969. At the time the notes were issued, national banks were immune from state and local taxes whose categories were not within the purview of Section 5219 of the Revised Statutes (12 USCA Sec. 548). Documentary stamp taxes were not one of the classes of taxes enumerated in Section 5219. Consequently, no documentary stamp taxes could be imposed against the notes drawn on accounts in the First National Hank of Pompano Beach because in 1969 it was a national bank, a status which it has continued to hold through the time of these proceedings. The prohibition against documentary stamp taxes being imposed by a state government on transactions between a national bank and its customers existed until December, 1969, at which point Public Law 91-156 was enacted, on December 12, 1969, and it amended Section 5219 of the Revised Statutes (12 USCA Sec. 548) and subsequent to that amendment, Title 12 USCA Sec. 3548 allowed state governments to tax national banks. In particular, the language of that latter provision provided: For the purpose of any tax law enacted under the authority of the United States or any State, a national bank shall be treated as a bank organized and existing under the laws of the State or other jurisdiction within which its principal office is located. This meant that transactions between the customers of a national bank and that bank with took place subsequent to the implementation of Title 12 USCA Sec. 3548 could be taxed pursuant to Chapter 201, Florida Statutes, by the process of a documentary stamp tax being levied. (The exhibits attached to the statement of facts show that Newth renewed his note with the Petitioner on April 20, 1971, and again on December 31, 1975. Smith renewed his note on June 12, 1973, and on December 31, 1975. Through the renewal process, documentary steep taxes were not paid on $683,000.00 involving the note of Newth and on $15,500.00 involving the note of Smith.) The Petitioner claims that it need not pay the documentary stamp tax and penalty on the Newth and Smith notes, because it is except from the payment of such tax. While the Petitioner agrees with the Respondent that Subsection 201.08(1), Florida Statutes, calls for the payment of documentary taxes on promissory notes and the renewal of those promissory notes, Petitioner believes that Section 201.09, Florida Statutes, exempts it from the necessity to pay documentary stamp taxes and related penalties in the matter of the renewal of the Newth and Smith notes which took place on December 31, 1975. The provision of Section 201.09, Florida Statutes, states: 201.09 Renewal of existing promissory note; exemption.--Then any promissory note is given in renewal of any existing promissory note, which said renewal note only extends or continues the identical contractual obligations of the original promissory note and evidences part or all of the original indebtedness evidenced thereby, not including any accumulated interest thereon and without enlargement in any way of said original contract and obligation, such renewal note shall not be subject to taxation under this chapter if such renewal note has attached to it the original promissory note with canceled stamps of fixed thereon showing full payment of the tax due thereon. Petitioner reads this provision to mean that the prohibition against the State of Florida levying taxes on the transactions that took place on the Newth and Smith notes in 1969, under the protection afforded by Section 5219 of the Revised Statutes (12 USCA Sec. 548); was tantamount to a declaration that full payment of the tax due thereon had been rendered and when the State attempted to impose the documentary stamp tax on the renewals which took place on December 31, 1975, Section 201.09, Florida Statutes, exempted the Petitioner from the payment of that tax. Under this theory, it was only necessary to attach the original promissory note issued in the Newth and Smith matters in 1969 to the renewal notes of December 31, 1975, and even though canceled stamps were not affixed to the 1969 notes, this could be analogous to attaching promissory notes with canceled stamps to renewal note documents. The analogy is supported in the mind of the Petitioner because both in the instance of the latter promissory notes with documentary stamp taxes attached and in the cases of Newth and Smith where original promissory notes were attached without canceled stamps attached; the key point was that under the hypothetical situation of documentary stamp taxes affixed to the original notes or the actual situation in the Newth and Smith cases, both had the real effect or effect in law of providing full payment of taxes due thereon. The perception of the Petitioner does not comport with the basis for the exemption created by Section 201.09, Florida Statutes. That exemption only applies when tax has actually been paid on the original promissory note, which did not occur here, and that failure to pay tax on the original promissory notes precludes any claim for exemption when the notes were renewed. There exists one further possibility open to the Petitioner in its efforts to resist the payment of the documentary stamp tax rate penalty on the notes of Newth and Smith. That possibility resides in the idea that the prohibition against taxing the notes when they were drafted in 1969, such prohibition appearing in the guise of Section 5219 of the Revised Statutes (12 USCA Sec. 548); it would continue to exist for the life of the note making all renewals exempt from taxation. That interpretation does not pass muster when viewed in the light of Title 12 USCA Sec. 3548, which removed future transactions from their exempt status and made them subject to tax by the Respondent. This change in position allowed Subsection 201.08(1), Florida Statutes, to be imposed on the renewals to the promissory notes, which occurred on December 31, 1975. In summary, Petitioner having failed to demonstrate its entitlement to the exemption set out in Section 201.09, Florida Statutes, it is liable in the lull amount claimed for the payment of documentary stamp taxes and penalties in a like amount in accordance with the provisions of Chapter 201, Florida Statutes, on all transactions addressed in the audit, which is Exhibit A to the statement of facts.
Recommendation It is recommended that the Petitioner, First National Bank of Pompano Beach, be required to pay documentary stamp taxes in the amount of $940.80 and penalties in the amount of $940.80 related to the transactions on these promissory notes set out in the stipulation of facts offered by the parties. DONE AND ORDERED this 15th day of June, 1979, in Tallahassee, Florida. CHARLES C. ADAMS, 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 15th day of June, 1979. COPIES FURNISHED: Bruce Culpepper, Esquire 716 Barnett Bank Building Tallahassee, Florida 32301 Barbara Staros Harmon, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32301 John D. Moriarty, Esquire Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER =================================================================
