Section 201.02(1)(b), F.S., as created by Chapter 2009-131, Laws of Florida (L.O.F.), imposes tax on transfers of ownership interests in a conduit entity when the transfer is within three years of a transfer of Florida real property into the conduit ...

DEPARTMENT OF REVENUE
Miscellaneous Tax

RULE NO: RULE TITLE
12B-4.060: Tax on Transfers of Ownership Interest in Legal Entities
PURPOSE AND EFFECT: Section 201.02(1)(b), F.S., as created by Chapter 2009-131, Laws of Florida (L.O.F.), imposes tax on transfers of ownership interests in a conduit entity when the transfer is within three years of a transfer of Florida real property into the conduit entity, documentary stamp tax was not paid on the full consideration when the real property was transferred into the conduit entity, and the ownership interest transferred belonged to the grantor of the real property. Chapter 2009-131, L.O.F., authorized the Department to promulgate an emergency rule and a permanent rule to implement the provisions of the law. The Department is seeking public participation and information to develop new Rule 12B-4.060, F.A.C. (Tax on Transfers of Ownership Interest in Legal Entities), regarding the documentary stamp tax imposed under Section 201.02(1)(b), F.S., on the transfer of ownership interest in a conduit entity.
SUBJECT AREA TO BE ADDRESSED: This is a rule development workshop at which participation and information regarding Chapter 2009-131, L.O.F., is encouraged. This rule development workshop will assist the Department in understanding issues related to the application of the documentary stamp tax on the transfer of ownership interest in a conduit entity, as provided in Section 201.02(1)(b), F.S., as created by Chapter 2009-131, L.O.F.
Persons are encouraged to participate in the rule development workshop and to submit written comments regarding the tax imposed under Chapter 2009-131, L.O.F., for the following issues:
1. Undefined Terms. The legislation uses several terms that are undefined and may require increased administration. These terms include, but are not limited to:
•Legal Entity,
•Arm’s length transaction,
•Direct or indirect ownership,
•Real property interest, and
•Transfer of an interest for consideration.
2. Giving Credit for Prior Tax Paid. The legislation imposes tax on sales of ownership interests in entities after Florida real property is transferred into the entity. The statute appears to contemplate that no tax was paid when property was put into the entity. However, tax may be paid on partial consideration. The statute does not specify whether any credit should be granted for these prior taxes.
1. Mergers. The statute is silent with regard to treatment of mergers.
2. Additional Issues Related to Section 201.02(1)(b), F.S. Additional issues regarding the documentary stamp tax on the transfer of ownership interest in a conduit entity, as provided in Section 201.02(1)(b), F.S.
SPECIFIC AUTHORITY: s. 6, Ch. 2009-131, L.O.F.
LAW IMPLEMENTED: 201.02(1) FS., Ch. 2009-131, L.O.F.
A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: January 27, 2010, 2:30 p.m.
PLACE: Room 118, Carlton Building, 501 S. Calhoun Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Larry Green at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Tim Phillips, Revenue Program Administrator I, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS NOT AVAILABLE.