Opinion ID: 1669807
Heading Depth: 1
Heading Rank: 3

Heading: Case Law Pre-1990 Amendment

Text: Prior to the 1990 amendment, this Court had encountered similar issues to those presented in the instant case. In State ex rel. Palmer-Florida Corp. v. Green, 88 So.2d 493 (Fla.1956), a corporation delivered a deed to property it owned to its shareholders in proportion to their shares in the corporation. The corporation argued that the transfer should not be subject to the documentary stamp tax because the shareholders had given nothing in exchange for the property. Id. at 494. We agreed and held that under the statute, the shareholders were not purchasers; the transaction had not involved any form of consideration; and thus the transaction was not subject to the documentary stamp tax. Id. at 495. The transaction was termed a mere book transaction and was in no sense a sale to a `purchaser' as contemplated by the statute. Id. We again considered the application of section 201.02(1) in Florida Department of Revenue v. De Maria, 338 So.2d 838 (Fla.1976). In De Maria, a corporation transferred property to its sole shareholder, but part of the property transferred was subject to a mortgage. Id. at 839. We reasoned that this encumbrance on the property made the transfer different from that in Palmer-Florida because the economic burden of the mortgage had been transferred to the individual, and the grantor corporation received a benefit in not having to pay the mortgage. Therefore, the transaction involving that part of the property encumbered by the mortgage was not a mere transfer of title. Id. This benefit and burden transfer constituted sufficient consideration to impose the documentary stamp tax on that part of the property subject to the mortgage. Id. at 840. We also adopted the definition in Webster's New Twentieth Century Dictionary of the term purchaser as one who obtains or acquires property by paying an equivalent in money or other exchange in value. Id. Thus, since consideration existed in the transaction because the burden of the mortgage had shifted, we concluded that the sole shareholder was a purchaser as to that part of the property subject to the mortgage. Id. However, we did not apply the documentary stamp tax to the corporation's unencumbered $25,000 equity in the real propertythat portion of the property not subject to the mortgagebecause that transfer was a mere change in form of the stockholder's equity in the corporation. Id.