Florida Senate - 2009 COMMITTEE AMENDMENT Bill No. CS for CS for SB 2430 & SB 1960 Barcode 946986 LEGISLATIVE ACTION Senate . House Comm: RCS . 04/17/2009 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Policy and Steering Committee on Ways and Means (Gelber) recommended the following: 1 Senate Amendment (with title amendment) 2 3 4 Delete lines 216 - 281 5 and insert: 6 7 Section 4. (1) The Legislature finds that the Florida 8 Supreme Court opinion in Crescent Miami Center, LLC v. Florida 9 Department of Revenue, 903 So. 2d 913 (Fla. 2005), interprets s. 10 201.02, Florida Statutes, in a manner that permits tax avoidance 11 inconsistent with the intent of the Legislature at the time said 12 statute was amended in 1990. 13 (2) The Legislature finds that the District Court of 14 Appeals for the Third District of Florida opinion in Crescent 15 Miami Center, LLC v. Florida Department of Revenue, 857 So. 2d 16 904 (Fla. 3d D.C.A. 2003), interprets s. 201.02, Florida 17 Statutes, in a manner that prevents tax avoidance consistent 18 with the intent of the Legislature at the time said statute was 19 amended in 1990. 20 (3) The Legislature intends, by this act, to prevent tax 21 avoidance through the use of artificial entities to transfer the 22 beneficial ownership of real property that changes, by a step or 23 series of steps, excluding certain entities that are used for 24 estate planning purposes. 25 Section 5. Subsection (1) of section 201.02, Florida 26 Statutes, is amended and subsections (11) through (13) are added 27 to that section to read: 28 201.02 Tax on deeds and other instruments relating to real 29 property or interests in real property.— 30 (1)(a) On deeds, instruments, or writings whereby any 31 lands, tenements, or other real property, or any interest 32 therein, shall be granted, assigned, transferred, or otherwise 33 conveyed to, or vested in, the purchaser or any other person by 34 his or her direction, on each $100 of the consideration therefor 35 the tax shall be 70 cents. When the full amount of the 36 consideration for the execution, assignment, transfer, or 37 conveyance is not shown in the face of such deed, instrument, 38 document, or writing, the tax shall be at the rate of 70 cents 39 for each $100 or fractional part thereof of the consideration 40 therefor. For purposes of this section, consideration includes, 41 but is not limited to, the money paid or agreed to be paid; the 42 discharge of an obligation; and the amount of any mortgage, 43 purchase money mortgage lien, or other encumbrance, whether or 44 not the underlying indebtedness is assumed. If the consideration 45 paid or given in exchange for real property or any interest 46 therein includes property other than money, it is presumed that 47 the consideration is equal to the fair market value of the real 48 property or interest therein. 49 (b) Except as provided in subsection (11), consideration is 50 given for real property when conveyance of an interest in real 51 property is made between a person or persons and a legal entity, 52 or between legal entities, whether or not the conveyance is 53 characterized as a mere change in the method of holding title or 54 of the legal form of ownership or the proportional beneficial 55 interests of all parties remain the same before and after the 56 conveyance. The consideration given is presumed to equal the 57 fair market value of the real property or interest therein. 58 (11) The conveyance of an interest in real property between 59 a person or persons and a legal entity or between legal entities 60 is exempt from the tax imposed by paragraph (1)(b) when the 61 conveyance is not a precursor to the transfer of the ownership 62 or control of an interest in the entity or a conveyance of the 63 real property by whatever method, means, or operation of law. If 64 within three years from the date of the conveyance exempt 65 pursuant to this section a subsequent direct or indirect 66 transfer of all or a portion of an interest in the entity or a 67 conveyance of the real property is made, the original conveyance 68 is presumed to have been a precursor to the transfer or 69 conveyance and the tax imposed by this section is due on the 70 subsequent transfer or conveyance of that portion of the real 71 property transferred measured by the fair market value of the 72 portion of the transferred real property at the time of the 73 subsequent transfer or conveyance. 74 (12) The requirements of this section do not apply to any 75 deed, instrument, or other writing which transfers or conveys 76 real property, or an interest therein, other than that portion 77 subject to the tax imposed by paragraph (1)(a), when the 78 transfer or conveyance is by inter vivos gift for purposes of 79 estate planning, or when by reason of the death of any person, 80 such real property, or interests therein, are transferred 81 outright to, or in trust for the benefit of, any person or 82 entity. 83 (13) The documentary stamp tax imposed by this section 84 applies to a deed, instrument, or writing that transfers any 85 interest in real property pursuant to a short sale, as defined 86 in this subsection. The taxable consideration for a short sale 87 transfer does not include unpaid indebtedness that is forgiven 88 or released by a mortgagee holding a mortgage on the grantor’s 89 interest in the property. A short sale is a purchase and sale of 90 real property in which: 91 (a) The grantor’s interest in the real property is 92 encumbered by a mortgage or mortgages securing indebtedness in 93 an aggregate amount greater than the purchase price paid by the 94 grantee; 95 (b) A mortgagee releases the real property from its 96 mortgage in exchange for a partial payment of less than all of 97 the outstanding mortgage indebtedness owing to the releasing 98 mortgagee; 99 (c) The releasing mortgagee does not receive, directly or 100 indirectly, any interest in the property transferred; and 101 (d) The releasing mortgagee, grantor, and grantee are 102 dealing with each other at arm’s length. 103 104 ================= T I T L E A M E N D M E N T ================ 105 And the title is amended as follows: 106 Delete lines 31 - 47 107 and insert: 108 109 involving legal entities; amending s. 201.02, F.S.; creating a 110 presumption for purposes of the excise tax on documents that 111 consideration is given for deeds, instruments, or writings that 112 convey property between certain individuals and entities; 113 creating a presumption of the amount of the consideration; 114 creating an exemption from the tax for certain deeds, 115 instruments, or writings that convey property; creating a 116 presumption that the deed, instrument, or writing was taxable if 117 a subsequent conveyance of the property or grantee entity is 118 made within a certain period of time; specifying the calculation 119 of tax due on the original conveyance; providing that the tax on 120 the original deed, instrument, or writing does not apply if the 121 subsequent conveyance is the result of an inter vivos gift or 122 the death of any person; providing that the tax applies to 123 transfers involving the exchange of real property for shares of 124 stock or as a capital contribution; imposing the tax on deeds, 125 instruments, and other writings on the consideration for a 126 transfer of real property pursuant to a short sale; providing 127 that the consideration subject to the tax does not include 128 unpaid indebtedness that is forgiven by a mortgagee; defining 129 the term “short sale”; authorizing the