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Old 02-03-2012, 07:28 PM   #1
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Fl Realestate and refi tax?

Having a little fun with the Florida department of revenue. I am asking for a refund of a little under $400 and they have denied it twice. I believe I am right and they are wrong and sending in my protest letter. Worst that can happen is I get turned down again, but dang it I think I am right.

So anyone on here with a background and want to add any comments?

Here is the deal. I refinanced last year and paid intangible tax on the full loan amount. The way I see it I should not have per Fl Statue 199.145 (4). Here is what that statue says, with the key word in bold:

(4) Where a note, bond, or other obligation upon which a nonrecurring tax has previously been paid is refinanced with the original obligee or its assignee:
(a) No additional nonrecurring tax is due if the principal balance of the new obligation is less than or equal to the unpaid principal balance of the original obligation, plus accrued but unpaid interest, as of the refinancing.
(b) Additional nonrecurring tax is due if the principal balance of the new obligation exceeds the principal balance of the original obligation, plus accrued but unpaid interest, as of the refinancing. If the original obligor is not liable to the obligee under the new obligation, the additional nonrecurring tax shall be computed on the entire principal balance of the new obligation; otherwise, the additional nonrecurring tax shall be computed on the excess of the principal balance of the new obligation over the principal balance of the original obligation, plus accrued but unpaid interest, as of the refinancing.



They have turned my refund down stating this:

“A review of the documentation provided with your application shows that you used the earnings of the new note to pay off the old one, and there was a specific release or satisfaction. The new note is not a renewal. In this case, the intangible tax to record the mortgage securing the new note would be due on the full amount.”

Their reason is an exact definition of a refinance per the Webster’s dictionary!

How they came up with renewal I don't know. I think I am right what say you? Money is not a major issue but why give that much away if I am right.
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Old 02-03-2012, 09:06 PM   #2
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“A review of the documentation provided with your application shows that you used the earnings of the new note to pay off the old one, and there was a specific release or satisfaction. Now, take a break here and absorb what was just "said".

The new note is not a renewal. In this case, the intangible tax to record the mortgage securing the new note would be due on the full amount.”

Your problem is not with FDR but with your mortgage company........assuming the new mortgage is with the same lender as the original mortgage. If the new lender is not the same as the old lender then refer to the first part of the F.S. you quoted.

If this answer doesn't work for you then maybe this one will:
Tourism is down and FL needs the money.
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Old 02-03-2012, 09:40 PM   #3
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Quote:
Originally Posted by KIX View Post
“A review of the documentation provided with your application shows that you used the earnings of the new note to pay off the old one, and there was a specific release or satisfaction. Now, take a break here and absorb what was just "said".

The new note is not a renewal. In this case, the intangible tax to record the mortgage securing the new note would be due on the full amount.”

Your problem is not with FDR but with your mortgage company........assuming the new mortgage is with the same lender as the original mortgage. If the new lender is not the same as the old lender then refer to the first part of the F.S. you quoted.

If this answer doesn't work for you then maybe this one will:
Tourism is down and FL needs the money.
Yes the existing note was from and to the same lender and I am the same obligee. The existing lender did not know of this little known Fl Statue, a friend told me about it and she got her refund. No where in the statue does it mention renewal, modification or anything else, only refinance.

Webster’s dictionary, refinance: “to get a new loan to pay (an older debt) : to finance (something) again”.

Pretty clear to me, but I do know Fl, like most states is hurting for money. Does not mean they have a free pass to take what is not theirs from me. Really kind of enjoying the contest. May even take them to small claims court, LOL.
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Old 02-03-2012, 09:44 PM   #4
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I think perhaps you may be mixing the meaning of the word refinance. Years ago we used to buy property by going to our local bank and getting a one year (or five year) note for the purchase amount. When the year was up we would either pay it off or pay the interest and the bank would renew the note (or refinance). The mortgage security would not change. I am guessing that what you did was essentially get a new loan which paid the first loan amount (and released the mortgage) to be replaced by the new security.

We have replaced mortgages with new loans several times (a refinance) and paid the tax each time.
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Old 02-03-2012, 10:42 PM   #5
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I think perhaps you may be mixing the meaning of the word refinance. Years ago we used to buy property by going to our local bank and getting a one year (or five year) note for the purchase amount. When the year was up we would either pay it off or pay the interest and the bank would renew the note (or refinance). The mortgage security would not change. I am guessing that what you did was essentially get a new loan which paid the first loan amount (and released the mortgage) to be replaced by the new security.

We have replaced mortgages with new loans several times (a refinance) and paid the tax each time.
Yes I agree and that is what I did, refinance. However Per the Fl Statue it clearly states refinance and not renewal, modification, alterations or other. I refinanced. They have based their dessicion on "it is not a renewal". the definition of refinance is very clear. It is my opinion they are playing, with words, not me and the statue is very clear. I refinanced and not renewed which is their reason for denial. Sorry renewal is not in the statue anywhere only refinance, which is what I did.

The way I see it is they hold us to the law and fine print and it is a two way street.
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Old 02-04-2012, 05:25 PM   #6
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Tomato , tomahto ? Potato, Potahto !
I would guess ( and bet ) that Florida has hundreds of cases, if not thousands where they have collected this tax and will continue to do so with courts approval.
I am sure you are not the first to question it and I am sure you will not be the last to lose it.
Enjoy the fight.

Don and Nancy
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Old 02-04-2012, 07:51 PM   #7
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Originally Posted by djbmsu View Post
Tomato , tomahto ? Potato, Potahto !
I would guess ( and bet ) that Florida has hundreds of cases, if not thousands where they have collected this tax and will continue to do so with courts approval.
I am sure you are not the first to question it and I am sure you will not be the last to lose it.
Enjoy the fight.

Don and Nancy
2011 Allegro RED
2012 Equinox
2007 Yorkie
Yes you maybe right. My girlfriend works with one of the busiest law firm who only does closing and they were dumbfounded with their ruling. They have used it on several transactions and all were approved. In all honest I feel I am following the letter and spirit of the law and they are not. Not really a fight but more of a good old fun challenge. Just because they have collected on many of these cases does not mean they are right and should not be called on it, at least that is the way I see it.

I am just not the type to have them play the tomato/tomaht game when the law rules. They would not give us a break now would they.

To be clear no I am not the first to question it but it appears I am the first to be denied as far as I know.

Thanks all for the input, really just excersizing my rights and requesting what I believe I am owed.

Terry
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Old 02-04-2012, 08:29 PM   #8
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After thinking about it I respectfully disagree with the tomato/tomahto way of thinking. To me it is more like tomato/grapes. renewal is clearly not listed in the state statue and refinance is clear as a bell. This is what I have done. How can they base their decision on a renewal/grapes which is clearly not in the statue. You can't change the statue just because you need money, without changing the statue. The way I see it is I am right and from what I can tell the first to be declined according to one major law firm.



refinance: “to get a new loan to pay (an older debt) : to finance (something) again



Renewal: the act or process of renewing : repetition


Yes I may not win but that is not the point, as a law abiding taxer you should respectfully stand you ground if you don't think something is right. IMHO.
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Old 02-05-2012, 07:37 PM   #9
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As to your desire to take the FDR to Small Claims Court over the Florida Statute (not "statue) I hope you win.
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