08.13.07
State Deed Tax, Loophole or Game
The Florida Legislature is looking for Revenue. County Appraisers have pointed out the state is missing Millions in revenue by a “loop-hole” in the system that allows parties to bypass paying state deed tax due on the sale.
An article in the Palm Beach Post points to 3 examples in particular that “cost” FL revenue in the amount of $4.2 million. They argue that arranging transactions as transfers of assets in a corporation, rather than sales of real property should be illegal.
In three specific sales, the $600 million sales prices on the commercial real estate reportedly paid 70 cents each in documentary stamp taxes. By comparison, critics argue it would take 1,500 sales of homes priced at $400,000 to funnel the same amount into state coffers.
I can’t say I agree. It appears the State is grasping at straws. The US has always structured its tax law in such a way that we all strategically “play the game” of how to legitimately, i.e. legally, avoid taxes. After all isn’t that why many corporations are set up in a Certain tax-beneficial states? Isn’t that the purpose of most trusts? I think the Assessor and Recorder do not understand the system – or should I call it the game.