Florida imposes documentary stamp taxes on promissory notes and other written obligations to pay money. The tax is imposed at the rate of 35 cents per $100 of face value, although obligations that are not secured by real property are now [thankfully] subject to a $2,450 cap in the tax.
Most practitioners will tell you that a promissory note cannot be enforced in court unless the documentary stamp taxes are paid, and there is case law supporting this. However, in a recent 4th DCA case, the appellate court found that this is only the case in regard to enforcing mortgages, evidences of indebtedness, and security agreements that are filed in the public records. Unsecured promissory notes can be enforced without the payment of tax – the enforcement of payment of such taxes is instead backstopped solely by applicable criminal laws and civil penalties.
The court premised its interpretation on the differing language between Fla.Stats. §201.08(1)(a) and (b). Subsection (a) imposes the tax on unrecorded promises to pay – Subsection (b) relates to recorded instruments. Only Subsection (b) has language eliminating enforceability until the taxes are paid, and thus there is no “unenforceable” language applicable to the unrecorded promises to pay. The court went on to restrict its prior decisions on the subject to the extent there were inconsistent with this interpretation. The court also noted that at least one of prior decision that is contrary to this conclusion dealt with the statute before it had this delineation between Subsections (a) and (b).
GLENN WRIGHT HOMES (DLRAY) LLC et al v. LOWY, 4th DCA, September 30, 2009