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If some Florida county appraisers get their way, commercial property owners will face increased tax exposure when corporate real estate assets are sold.

Under Florida law, companies can transfer real estate holdings into a wholly owned subsidiary without paying deed transfer and mortgage documentary stamp taxes. The owner can then sell the controlling interest. Since the law does not require these transactions to be recorded with the assessor, the deals are not subject to transfer taxes or mortgage documentary stamp taxes if the buyer takes out a mortgage.
 

Appraisers say the practice is costing counties millions of
dollars in lost tax revenue. Not only are transfer and mortgage documentary stamp taxes not paid, if the property’s sales price is not recorded, the fair market value may be unrealistically low on the assessment rolls.

Many states have changed their laws regarding corporate stock sales or transfers. The Florida Legislature has not followed suit. House Minority Leader Dan Gelber told The South Florida Business Journal, “The only reason I won’t file a bill on tax avoidance is that I wouldn’t get a hearing.”